1. The Fall and Rise of HFT: A new avalanche of books de-bunking uber-writer Michael Lewiss Flash Boys: A Wall Street Revolt, which claimed that HFT markets are rigged, will exonerate the practice. A new tranche of players will enter the market, using the Securities and Exchange Commissions new guidelines as armor.
2. Boring is the New Black: The Wild West days of banking will be a distant memory as next years bankers will continue to avoid risky practices in the face of regulatory scrutiny. They will revert to wearing bowler hats and carrying umbrellas. Real-time cross-border, cross-market surveillance will be a must have, not a nice to have, to keep the CEO out of the headlines.
3. A Hedge Fund Will Be Saved by a Self-Learning Algorithm: In 2015 algorithms will become smarter. Fast trading will include self-learning risk frameworks that can detect and shutdown any rogue human or algorithm behavior.
4. The Internet of Tractors Changes Things: The Internet of Things willcome to commodities markets and connected machines will begin feeding valuable information to traders. For example, tractors will tell commodities traders how the crops are faring.
5. The FBI Swallows the CFTC and SEC: Having failed to rein in markets fraud, the U.S. Commodity Futures Trading Commission and U.S. Securities and Exchange Commission will be forced to work for the Federal Bureau of Investigation to help catch the perpetrators.
6. Internet of Things Invades the Trading Floor: Financial institutions will embrace smart network surveillance devices such as indoor location tracking to determine who is talking to whom, video analytics for monitoring facial expressions and stress levels, and audio analytics to detect keywords in communications.
7. The Birth of Traders Rights: Traders rights activists will invade dealing floors to protest the banks invasion of traders privacy.
Dr. John Bates is chief marketing officer / business leader for big data analytics, cloud & industry solutions for Software AG.