Regulation is both a help and a hindrance, according to one panellist at The Network Forum in Athens.
The moderator asked the panel if regulation could be looked at as a double-edged sword, and
in response, Ryan Marsh, director, customer and clearing global product development manager, Citi, said: “New regulation tends to bring opportunities and challenges. Looking back on the first Financial Instruments Directive (MiFID I) for example: it fostered competition and created a huge – mostly positive -change through trading and clearing and the associated business."
Marsh explained: "Regulators needs to keep up with new trends as the industry evolves. While regulation is always well intended – at times it can also slow down the adoption of new trends and changes that are much needed for the industry’s future.”
Mike Clarke, director, Deutsche Bank, affirmed: “Not only does regulation need to keep up, but we also need to keep up. The combination of regulation which limits the number of providers that can create a ledger is quite a costly piece.”
“Also adapting a market to this change is an incredibly hard thing to do in a short time. The drivers are very common and they include efficiency and enhanced client experience. That is what we have to do right now and we can’t wait.”
Clarke added: “We need to deliver things in a more Amazon-like way, it needs to be quick so that we are not waiting two days to deliver securities.”
“We are in a world where we are under constant cost pressures. The pressure on fees is on all of us but there is still an expectation that risk coverage is there and people need to be prepared to change how we price and how we change the cost model to the end investors. People are willing to pay for quality and value.”
The moderator asked the panel what the different drivers are in driving change for the industry, and one panellist replied: “Change in the industry starts with the investors themselves as the customer expectation changes.”
“I am optimistic about the regulatory change in Europe. One of the key factors in facilitating change is technology and having the ability and maturity to facilitate change, although we remain concerned about having silos of new technology.”
Another speaker highlighted that artificial intelligence (AI) will help the industry enhance the customer experience and explained that many firms have to “shrink to go” and therefore they will be looking to outsource more in terms of resources.
Another panellist affirmed: “We are all on a quest to be more efficient. A lot of new technologies like blockchain and AI are maturing very quickly. It is such a complex ecosystem that we operate in.”
Meanwhile, the panellist asked the panel about collaboration in the industry.
Clarke cited: “We should collaborate on commodity and compete on value-added services. Across the value chain, we are competitors and it is sometimes difficult to take that collaboration and put it into execution. It’s about solving the right problems and delivering them in the right way.”
“You have to be focused on value for clients. We focus on making sure we can deliver today, which includes making our systems more robust, training our people, and making sure that we’re aware of the risks going on in our markets.”
