AFME: Technology, the big game changer?
24 May 2018 London
Image: Shutterstock
Some 52 percent of an audience at this year’s Association for Financial Markets in Europe (AFME) conference in London said that technology is the main game changer in the industry.
A further 42 percent thought that the main game changer is actually regulation, while 6 percent surmised that politics and monetary issues are the main game changers.
One panellist said: “Sometimes international politics is as good as a Netflix drama. In Brexit discussions, it seems that we take two steps forward then quite a few back. International politics is something overshadowing everything that we do.”
Another panellist commented: “Global markets have been decoupled from global turmoil, so this is certainly changing a time for us [the industry]. Close to the 10th anniversary of the worst financial crisis since the Great Depression, the financial landscape have been changed through policy regulation. Nationalism gives rise to protectionism. It would be a disaster for us all to go in the wrong direction.”
The shift of focus turned to technology, with one speaker pointing out that the industry spent about $1 billion on implementing Target2-Securities (T2S). T2S was put into place in January 2017, when it was virtually live.
“At that point in time up until now, the level of cross-border transactions are close to 0 — there has been no cross-border transactions.”, the speaker added.
The speaker continued: “We spent a lot of money on something that didn’t need to be built. The idea enabling a hold of a pool of securities of collateral in one location, and then being able to service those assets.”
Expanding on this, the speaker said: “It’s frustrating to spend all of this money and not have the immediate success. Technological change has not happened yet but it is coming.”
In a separate poll, the moderator asked the audience when they predicted the industry would see the first scale blockchain application in the post-trade area: 2020, 2025, or 2030.
Some 59 percent said 2025, while 29 percent said 2030, a further 13 percent said 2020.
Commenting on this, one speaker said: “The timeline keeps getting longer. These ideas that we might have as an industry make sense to us, one system and one platform. But, it has never happened, because the industry could not come together.”
Another speaker said: “Maybe it is 2030 rather than 2025 because to make this work you need global corporation, global standards, and you need to put a lot of money into it.”
The panel moved back to discussing politics, saying that in regards with Brexit, the industry could be about to enter into either a wild thunderstorm or a period where the clouds will clear.
“There is not a lot of information on any one of those areas to guide us. The rulebook is being set by the regulators, they need to make sure that ground is in good shape, we have to confer with the team’s market participants to complete their needs. We need complete optimal conditions to meet their ground but we can’t control the weather.”
A further 42 percent thought that the main game changer is actually regulation, while 6 percent surmised that politics and monetary issues are the main game changers.
One panellist said: “Sometimes international politics is as good as a Netflix drama. In Brexit discussions, it seems that we take two steps forward then quite a few back. International politics is something overshadowing everything that we do.”
Another panellist commented: “Global markets have been decoupled from global turmoil, so this is certainly changing a time for us [the industry]. Close to the 10th anniversary of the worst financial crisis since the Great Depression, the financial landscape have been changed through policy regulation. Nationalism gives rise to protectionism. It would be a disaster for us all to go in the wrong direction.”
The shift of focus turned to technology, with one speaker pointing out that the industry spent about $1 billion on implementing Target2-Securities (T2S). T2S was put into place in January 2017, when it was virtually live.
“At that point in time up until now, the level of cross-border transactions are close to 0 — there has been no cross-border transactions.”, the speaker added.
The speaker continued: “We spent a lot of money on something that didn’t need to be built. The idea enabling a hold of a pool of securities of collateral in one location, and then being able to service those assets.”
Expanding on this, the speaker said: “It’s frustrating to spend all of this money and not have the immediate success. Technological change has not happened yet but it is coming.”
In a separate poll, the moderator asked the audience when they predicted the industry would see the first scale blockchain application in the post-trade area: 2020, 2025, or 2030.
Some 59 percent said 2025, while 29 percent said 2030, a further 13 percent said 2020.
Commenting on this, one speaker said: “The timeline keeps getting longer. These ideas that we might have as an industry make sense to us, one system and one platform. But, it has never happened, because the industry could not come together.”
Another speaker said: “Maybe it is 2030 rather than 2025 because to make this work you need global corporation, global standards, and you need to put a lot of money into it.”
The panel moved back to discussing politics, saying that in regards with Brexit, the industry could be about to enter into either a wild thunderstorm or a period where the clouds will clear.
“There is not a lot of information on any one of those areas to guide us. The rulebook is being set by the regulators, they need to make sure that ground is in good shape, we have to confer with the team’s market participants to complete their needs. We need complete optimal conditions to meet their ground but we can’t control the weather.”
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