SIX: Services providers must expand horizons
08 December 2017 London
Image: Shutterstock
Post-trade service providers must focus on providing new services in the future, while also investing in new technologies and personnel, according to research from SIX Securities Services.
Of respondents to the SIX survey, 67 percent said they think post-trade service providers will have to focus on new services and revenue opportunities by 2027, if they want to move on from being purely operational and create more value.
When asked which technologies will provide the greatest value, 63 percent identified robotic process automation and artificial intelligence.
This was followed by distributed ledger technology, named by 57 percent, cryptocurrencies, named by 50 percent and application programming interfaces, named by 37 percent.
There was also evidence of organisations planning to outsource to third-party financial technology providers, with 37 percent of respondents saying they are ‘highly likely’ to outsource to at least one post-trade provider by 2027.
Among asset management companies, this figure increased to 60 percent.
According to SIX, the main reasons for this is that fintech companies are perceived as being more nimble; are able to approach issues from a more innovative perspective; and are viewed as having employees with different skill sets, allowing them to generate services adding more value.
Also, some 43 percent said they think post-trade providers will have to partner with other companies.
More than half of respondents, 53 percent, highlighted the need to hire different types of talent from outside of the industry, in order to retain clients. Further, 37 percent said a mix of technological and financial knowledge will be required for firms to add value—combining an understanding of the current landscape with the skills to create new solutions.
Valerio Roncone, head of markets and clients and a member of the management committee at SIX Securities Services, commented: “Today, the aim of any effective post-trade service provider should be to develop the capabilities to solve problems and create real value coherently across the entire market.”
“This new research confirms our belief in the way we are approaching industry challenges and addressing our clients’ pain points: We have already developed a package of value-added solutions—advanced services—which help financial institutions significantly reduce their operational complexity as well as operational risks, and eliminate redundancies within a given end-to-end process chain.”
Of respondents to the SIX survey, 67 percent said they think post-trade service providers will have to focus on new services and revenue opportunities by 2027, if they want to move on from being purely operational and create more value.
When asked which technologies will provide the greatest value, 63 percent identified robotic process automation and artificial intelligence.
This was followed by distributed ledger technology, named by 57 percent, cryptocurrencies, named by 50 percent and application programming interfaces, named by 37 percent.
There was also evidence of organisations planning to outsource to third-party financial technology providers, with 37 percent of respondents saying they are ‘highly likely’ to outsource to at least one post-trade provider by 2027.
Among asset management companies, this figure increased to 60 percent.
According to SIX, the main reasons for this is that fintech companies are perceived as being more nimble; are able to approach issues from a more innovative perspective; and are viewed as having employees with different skill sets, allowing them to generate services adding more value.
Also, some 43 percent said they think post-trade providers will have to partner with other companies.
More than half of respondents, 53 percent, highlighted the need to hire different types of talent from outside of the industry, in order to retain clients. Further, 37 percent said a mix of technological and financial knowledge will be required for firms to add value—combining an understanding of the current landscape with the skills to create new solutions.
Valerio Roncone, head of markets and clients and a member of the management committee at SIX Securities Services, commented: “Today, the aim of any effective post-trade service provider should be to develop the capabilities to solve problems and create real value coherently across the entire market.”
“This new research confirms our belief in the way we are approaching industry challenges and addressing our clients’ pain points: We have already developed a package of value-added solutions—advanced services—which help financial institutions significantly reduce their operational complexity as well as operational risks, and eliminate redundancies within a given end-to-end process chain.”
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