By Lisa Iagatta, Vice Chair of ISITC
At the end of January, I had the pleasure of attending and presenting at ISITC Europe's AGM & Conference 2018 in London. Nigel Solkhon, CEO of ISITC Europe, was tremendous, and the agenda was filled with a variety of panels that fell along the theme Birth of a New Industry Model, with topics covering a broad range of fintech.
After reflecting on my time in London, I came back with three key takeaways that our membership in North America would find interesting:
1. Distributed Ledger Technology (DLT) will prove itself in 2018
While there’s been a lot of talk about what DLT’s final impact will be on financial services, ISITC Europe shared optimism around some tangible approaches to adopting the new technology. Keith Bear, Vice President, Global Financial Markets at IBM, was the keynote speaker for the event and shared IBM’s strategies for developing blockchain to integrate into financial systems.
Using examples such as consortium based approaches, blockchain in production for derivatives processing, and blockchain in securities post trade, Bear outlined practical cases for DLT in the financial space and offered hope for the technology’s future impact.
I particularly enjoyed Keith Bear’s use of Hemingway’s quote, “’How did you go bankrupt?’ ‘Two ways. Gradually, then suddenly,” to draw a parallel to how DLT will be adopted slowly at first, but once it gains hold, it will do so very quickly across the industry.
2. Walk before you run – data management needs an overhaul before machine learning can have an impact
Data was at the core of a majority of the topics in the program, but one of the most interesting discussions was about machine learning, and its dependence on data management.
Machine learning has become such a buzzword across many industries, financial services included, that there’s almost a sense of FOMO where everyone wants to jump on board. However, it’s critical that financial institutions refine and manage their data before incorporating machine learning into their systems. At this point, centralizing and standardization of data across siloed business lines is still the focus for most institutions that are looking to fully leverage the operational benefits of machine learning in the future.
3. When it comes to regulation, Europe seems to know what to expect
One striking difference I noticed was the outlook on regulation. While in the U.S. the future of regulation is cloudy at best, Europe seems to be taking increased regulatory scrutiny in stride.
For example, I found it amusing that conference attendees, less than two months after the implementation of MiFID II, were actually making jokes about starting to prepare for MiFID III and MiFID IV down the road.
Even though they were discussing possible regulation that would be stricter than what is currently being seen on a global scale, there didn’t seem to be an air of concern. Rather, it felt like most in the room has come to terms with the idea that they are nowhere near the high watermark in terms of regulation, and that the best way forward is to operate under the assumption that things will get tighter.
Overall, the discussions we had at the conference made me even more excited for ISITC’s 24th Annual Securities Operations Summit, to be held March 18-21 in Boston. Our theme this year, Financial Services Disrupted: Navigating Change, feels like an accurate reflection of the current environment, and we look forward to bringing our members insightful content and guidance, led by a top notch roster of keynote speakers and panelists.