The securities finance industry is “lag behind the technology curve,” according to a panel at the Securities Finance Technology Symposium.
Compared to other areas of capital markets, from how companies transact to how technology works, the securities finance industry is following a clear path that drives the industry forward.
However, areas such as currencies and cash stocks have been moving in this innovative direction for several years now.
Securities finance moves much more slowly than other asset classes and it has become clear to market participants that there needs to be momentum for transformation and innovation, the panel heard.
The limits of this go beyond technology, new workflows and new paradigms must also be adopted.
The session titled “FutureTech” heard from Wassel Dammak, Head of Collateral Solutions Strategy at VERMEG, Ken DeGiglio, Chief Information Officer at EquiLend, David Shone, Director of Market Infrastructure and Technology at ISLA, and Martin Walker, Head of Product Management, Securities Finance and Collateral Management at Broadridge.
While analyzing whether the industry has found itself behind the curve, a panelist focuses on collateral management as an operational area that has seen significant improvement over the past decade, particularly due to regulation.
The panelist reveals that the industry has seen increased automation in several parts of the warranty lifecycle and good collaborations across the industry to improve efficiency.
Even though there are gaps between different asset classes and some processes are not there yet in terms of automation, overall the technology – like software as a service and open cloud architecture with native APIs – has been essential in transforming collateral infrastructure and streamlining connectivity within the collateral ecosystem.
Following these remarks, another panelist points to a need for change in the industry to drive technological advancements in securities finance. He says the industry remains a very traditional business with players that have been around for a long time.
There is now an awareness that “new blood” is needed as well as a requirement to examine how new technologies can support funding for innovation titles.
In this relational profession, it is essential to bet on people as much as on technology, notes a panelist. By investing in automation and improving operational efficiency, the industry’s ability to get the most out of its business relationships will be enhanced by becoming “smarter, faster and more profitable”.