The industry is faced with a constant need to evolve and develop. At the Securities Finance Technology Symposium, a panel discussion on technology for solving regulatory burdens looked at the current market landscape, new rule frameworks, and what the aftermarket world will look like in the future.
Three regulatory experts discussed what they think the future holds for securities finance regulations, especially around data, and what the “next big thing” would be.
Despite all the hype, securities finance still sleeps on the real power of blockchain, according to the first panelist. There are use cases and some customers are definitely heading there, especially for internal lending programs, they say, but there is still hesitation in embracing such radical technology.
“I know a few of the CCPs also see blockchain as a communication and transaction mechanism, so I think it’s a big technological change,” the first panelist said. Leverage investments, monetize data, cut costs, do things more efficiently and allow operations to be more automated, “I think this is the natural next step,” the expert concluded.
The second market expert said that it is not so much new technologies that will shape the future regulatory landscape, but “the next big thing for the securities markets will be to shorten settlement cycles, and we have obviously seen problems. recent in the United States with retail investors’. .
On retail investing, the panelist questioned whether the traditional market should step in to help smaller new entrants reduce risk, for example by developing sponsored models to help connect counterparties, said they added.
The third panelist believes that the future will bring technology that improves efficiency due to the high capital costs of running a business. Efficiencies could be achieved by removing intraday liquidity fees via a blockchain for the purpose of settlement, they added. “I think what you’re starting to see, and you’re seeing it with one or two vendors, is a lot more focused on that and how to move securities or tokens through the system a lot more efficiently.”
Especially on the capital side, in central clearing, anything that reduces the cost of capital for borrowers is a positive step and “we will continue to see movements in this direction,” the expert concluded.