These are exciting times in the global post-trade sector, one that has not historically been associated with innovation but is ripe for technological change. Having recently joined Celent’s Capital Markets Research Team, I’m excited to have the great opportunity to help clients navigate the space, and to identify trends that can help them grow their businesses. I feel privileged to have worked at leading asset managers, market infrastructures, and research firms and am now looking forward to leveraging my industry experience to call out key developments in today’s market, and to give post-trade coverage the attention it deserves.
In Celent’s last comprehensive look at this space, a report titled “Next Generation of Post-trade Technology: Evolution to Revolution”, the authors postulated that post-trade technology and operations were undergoing a major transformation. When this report was published, roughly five years ago, pressure on costs was the key driver behind post-trade innovation. While this remain the case, there is also new excitement related to the realization that post trade operations exhaust creates a treasure trove of data which can drive insight and perhaps even create new revenue opportunities across the firm.
In addition to more focused research around post-trade topics, on a higher level, my intention is to revisit the topic of “NextGen Post Trade” and analyze the progress (or lack of) that the industry has achieved over the last five years.
I will take a detailed look at the following questions:
- What level of automation has actually been achieved?
- Has the adoption of cloud and AI impacted post-trade operations?
- Are we any closer to realizing the promise of distributed ledger technology?
It will be fascinating to see how the incumbent providers have fared since then, spotlight who the innovative players in the space are, and see what they are doing.
One driver that the previous research couldn’t possibly have predicted was the global COVID-19 pandemic and its impact. During the two-plus year duration of the pandemic, for some capital markets institutions it was all they could do to maintain their existing processes and technology in order to keep the lights on. For other firms, the crisis spurred accelerated automation of manual processes that became even more onerous to complete remotely.
Over that time, several initiatives were launched that demonstrate an unprecedented level of innovative thinking. For example, there has been quite a bit of attention paid to developing settlement platforms using distributed ledger technology, e.g., the Depository Trust and Clearing Corporation’s Project Ion. Digital solutions in the areas of collateral management and repo clearing have been introduced; however, these offerings need to be widely adopted globally to have a meaningful impact on the risk reduction and total costs of operations.
I’m looking forward to focusing my research and exchanging views with our research clients on innovation in post-trade and how technology is playing a supporting or catalyzing role, identifying trends, and to imagining the post-trade operations of the future.