American asset manager Northern Trust has developed a new pricing engine, which is designed to predict the rate to loan securities in the securities lending space.
The offering is powered by machine learning and advanced statistical techniques.
It harnesses strategic market data points from various asset classes and regions in a bid to forecast equities’ demand in securities lending, the asset manager noted.
The aim is to enable Northern Trust global securities lending traders automatically broadcast lending rates for 34 global markets to Northern Trust borrowers.
Northern Trust head of global securities lending Dane Fannin said: “With this latest advancement, we have created an infrastructure and analytical framework that can intelligently adapt to changing market conditions.
“Our technology assesses market demand across thousands of securities and allows our traders to extract better returns for our clients.
“The potential benefits from machine learning techniques extend beyond this initial application, and we will continue exploring and developing solutions that drive value for our clients.”
Northern Trust has trading desks in Chicago, London, Hong Kong, Sydney and Toronto for securities lending. The business had around $1.2 trillion in lendable assets at the end of June 2019.
The latest development comes soon after the launch of Northern Trust’s investment analytics tool dubbed Performance RADAR. The tool is designed to offer investors insights when assessing risk and performance.