By Lisa Iagatta
Every year, I’m amazed by the participation and energy at our Annual Securities Operations Summit. As a non-profit volunteer organization comprising over 60 member firms, ISITC has attracted professionals who not only dedicate themselves to their everyday jobs, but also help advance the industry by collaborating with others to conquer its biggest pain points.
Our 25th Annual Securities Operations Summit was an outstanding success as we welcomed over 200 industry professionals in Boston to discuss the future of artificial intelligence (AI) and machine learning, proof of concepts for distributed ledger technology (DLT) to reduce inefficiencies, and the future of data management. As I reflected on all of the insightful sessions, I saw three common threads emerge throughout the three-day conference:
1. Collaboration is not an option – it is a necessity to “win” in our industry
In the fall of 2018, State Street finalized its $2.6 billion acquisition of Charles River Development to enable the industry’s first global interoperable platform connecting the front, middle, and back office with one provider. When discussing this decision during his keynote session, CEO of Charles River Development and EVP at State Street John Plansky said Charles River was State Street’s “plan A, B, and C,” and that as the industry evolves, asset managers will look to established technology companies for guidance. Partnerships with other providers, whether they’re vendors or third parties, will prove to be essential to complement and supplement existing services.
In addition to strategic partnerships, open architecture will be a key indicator of a company’s future success, according to Plansky. He said, “We don’t think that any one firm will be dominant so that you would do everything with them. At State Street, we believe in open architecture. Firms with closed architectures won’t win in the long run.”
APIs open a new opportunity for collaboration versus competition, as firms can build on each other’s strengths, and finally be able to offer customers true STP.
During the “Technology Trends in Financial Services” panel, David Scola, Head of North America at SWIFT, shared that APIs are the biggest technology opportunity in the securities space. Many firms currently use bilateral APIs, but in order to avoid potential fragmentation, Scola’s fellow panelists – Rich Robinson, Senior Executive at Bloomberg, and Gary Chan, Managing Director at J.P. Morgan – agree that there will have to be an evolution from that starting point to facilitate the sharing of applications. Gary Chan said, “APIs are the bread and butter of how we’ve changed operations,” and that they offer opportunities to add on new technologies.
As ISITC has learned since its inception in 1991, collaboration among firms is key for industry success, and developments like API evolution will continue to enable operational and technological advancements for all.
2. It’s all about the data
John Plansky opened the General Session day by saying, “The punchline of today will be about data.” This sentiment definitely rang true throughout all of the sessions, whether speakers were discussing AI, DLT, APIs, or data management in general.
In the beginning of the session, “Data Disrupted: What’s Changed, What’s New, What’s Next?”, Marty Williams, Head of Business Development at ICE Data, asked the question at the heart of the issue: How do you turn the data into a competitive advantage? In response, panelists discussed who’s responsible for the data, how to source the right talent to leverage the data, and what lies ahead. The answers? They concluded that everyone in the organization must be responsible, technical and presentational skills will become instrumental for talent-sourcing, and the future of data will focus on transparency around access, ethics, and lineage.
In “Fintech Meets Securities Operations: Asset Services Disrupted,” the need for high-quality data to reap technology’s potential benefits was emphasized. Artem Korenyuk, Executive Director of Business Development and Fintech Strategy at DTCC, explained that in order to ensure the functionality of the DTCC’s Trade Information Warehouse (TIW), “It all comes down to the data.”
If we’re going to leverage the exciting innovations and technologies bubbling to the surface of our industry, we’re going to have to develop data standards to ensure we’re all on the same page and eliminate the potential for fragmentation. As an industry, we’ll have to continue to keep these conversations open to make sure that everyone is aligned on the opportunities and challenges that come with refining data and developing standards.
3. Be strategic about how you use new technologies
Sure, it’s great to be able to say that your firm is using the latest and greatest in technology, but what good is it if it’s not implemented strategically? Gordie Sands, Executive Director of IT Architecture and Office of FinTech Strategy at DTCC captured this idea succinctly during the panel “Why AI and Robotics? The Allure of Intelligent Automation.” He said, “Instead of looking for places to employ your technology, you should be asking, ‘What are the business challenges we have and what are the best ways to deploy our technology to solve those challenges?’”
One of the issues with getting DLT off the ground was that it seemed like a solution that was looking for a problem. Rich Robinson said, “DLT is the new XML. Everyone’s trying to throw it at every problem, but it has scalability issues. It will be transformative, but you have to focus on the right applications for the solution.”
Rather than take jobs away from humans, fintech can augment employees’ capabilities and experiences when applied correctly. During the AI and RPA panel, Dushyanth Sekhar, Senior Director for the Center of Automation, Robotics & Extraction at S&P Global, explained that AI’s value proposition is that it eliminates tasks that humans shouldn’t be doing in the first place. By effectively utilizing technologies like AI and RPA, firms enable their employees to focus on value-add activities over rote tasks that can be completed by technology.
As you chart the course for your company, it’s important to prioritize open communication and collaboration with other firms. Events like ISITC’s Securities Operations Summit remind us of the power that comes with knowledge-sharing, and we look forward to engaging with industry experts to continue the effort to lead financial services operations into the future!