Given the rapid evolution of technology and the number of new regulations facing the industry, it seems that uncertainty is the new certainty. We asked Keith Tippell, Managing Director, Head of Securities and FX markets at SWIFT for his views on the evolving securities industry and what role SWIFT will play.
“We’ve seen a lot of firms talk about how they’re going to have to adapt their business models, and their service propositions to their clients, in what is a very uncertain market. There is a big focus on how technology can potentially help, and an increasing willingness to find collaborative solutions. Given the cost pressures, the regulatory environment, and a focus on capital efficacy, securities institutions are going to have to collaborate to provide better service levels to their clients.”
What is the future for T2S?
“SWIFT has been heavily involved from the beginning in connecting participants into Target2-Securities (T2S) and there’s still a number of waves of adoption to come. We’re seeing our clients adjust their operating models to T2S, but that has only just started, there’s plenty of potential for additional new services that could be layered on to the T2S infrastructure and we’re going to see many changes over the next few years.”
How will blockchain and distributed ledgers affect the industry?
“There’s a huge amount of hype around this topic, and a significant amount of potential opportunity. Market practitioners want to see the intersection between where the technology adds value, and where it actually makes sense to deploy it. Though there will be continued investment and R&D in this area, there’s a dawning realisation that the industry needs to be careful in how it leverages its existing investments and assets. Again, industry collaboration will be key to success, and issues such as standardisation will be important to guarantee that any new deployment can interoperate with both existing systems and with other blockchains.”
How can SWIFT help the securities markets to address future challenges?
“Securities plays an increasingly important role in SWIFT’s future strategy – of the 6bn+ financial messages that flowed over SWIFT last year, around 50% were related to securities in areas such as settlement and reconciliation, FX confirmations, corporate actions, funds and collateral management.
My background is in FX and I was surprised when joining SWIFT to find out that there are over 8,000 global users of FX confirmations – that’s quite a community! Of course community and collaboration are very much in SWIFT’s DNA, and we intend to work with the industry to create a number of new initiatives in securities and FX focused around post-trade risk alerting and information products where we bring market participants together to design a solution that will drive efficiencies for all from day one.”