AI and Trading – Blackrocks Aladin system as an example


How the Aladdin System came to Influence the Value of the World’s Financial Asset

Aladdin is a Blackrock’s electronic system used by investment managers who seek to connect information, people, and technology to manage money in real-time. It operates by combining sophisticated risk analysis with comprehensive portfolio management and trading tools in a single platform.

It aims at powering decision –making the process for an efficient trade scale. Aladdin utilises collective intelligence to help every enterprise in the organisation, and effective communication to meet demand. It unites people and information by creating a centralised source of data to allow all businesses to run with low risks and higher benefits. Generally, it handles around $15 trillion assets and keeps track of about 30, 000 investment portfolio.

Benefits of Aladdin to Financial Institutions

Most banks are now investing in classes outside their traditional base of assets in an attempt to seek more efficient approaches to deploy capital. Aladdin helps in evaluating enterprise risk management processes to improve the institution’s focus on capital efficiency and operational risks as they manage cost.

It addresses scrutiny by regulators and clients; Aladdin is continually evolving to meet new client’s requirements; this is a solution provider to investment managers. It supports central clearing guidelines under Dodd-Frank; also, the data from the system is used to drive global disclosure reports. The entire process of managing all parts and the risks and investment processes across the portfolio on a single platform contributes to high transparency.It increases earnings and enhances shareholder’s value by increasing efficiency and reducing cost.

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Global consolidation of risks platform helps in minimising overlapping technology and processes, thus increasing global consistency in transparency. It also helps in the management of new business lines and cash flow projections in different scenarios, income sensitivity analysis, and economic capital analysis.

Aladdin provides standard views of full balance sheet exposures to allow consistent view of risks across security, loan assets, and liabilities to improve exposure management. It offers full derivative support, including risk, trading, central clearing, and collateral management. It assists in deposits and securitized liabilities modelling to show overall market and credit risk on the balance sheet. It also provides modelling for fixed income securities, loans, and loan assets in a consistent framework.

How Aladdin Supports Corporations

Whether starting a business or in every established market, every business needs to focus on making the best use of the available cash. For the growing companies, the most significant problem is unpredictable cash flow and the need to extend cash life while more established enterprises seek to maximise returns.

Aladdin provides high efficiency in consolidating risk and compliance reports across internally and externally managed assets. It also allows for timely access to complete information on each portfolio to enhance the manager’s ability to operate more efficiently and manage programs where appropriate.

If a large portion of the enterprise data is managed internally, Aladdin can support the full investment plan and help to mitigate operational risks as they increase efficiency.