Geggus: The first is obvious, talking about the problems of settlement and CSDR. It’s distributed ledge tech­nology : there’s plenty of test cases where it’s used for instantaneous settlement in markets, and there’s entrants into the securities lending market that are looking at that.

It’s been around for a while, and a lot of people look at it as the crypto platform. But the benefits to it are much beyond that. Within that, we could see the efficiencies that the indus­try demands and is asking for so if we can get to a stage where CSDR is a memory in the past, because we have efficiency in the market and we’re utilising things like DLT, we could really harmonise the market from an efficiency standpoint.

Banks have spent a huge amount of money on technology. Most tech firms end up getting bought by banks so you see investment from banks will not stop. We are becoming larger investors in technology, and we’re becoming technology com­panies in the amount of expenditure that has been spent on it. I think we’ll see this develop further, we’ll see the benefits from distributed ledger technology for sure. Same thing with smart contracts. When we look at the ability to update a client contract, to update triparty contracts between people – these are ripe for becoming smart contracts. If you move that into a technology-based platform, you remove the need for me to receive a letter, open it, sign it and return it manually back to someone else.

The benefits of that for me are coming. What timeframe? The work that ISLA’s doing on things like common domain model to standardise things will help as Andy said earlier. Standardi­sation is key to that because technology is fantastic, but it has limits on how much it can process for a simple transaction. Because if we need it to do something extremely remarkable, the cost of that for a securities lending agent is too much. So as the technology develops, becomes cheaper, I’m hoping we’ll see the industry move towards that further. And then we’ll also get the benefits of things like hyper automation, which is where we can change 60% of everything that’s been done manually now, to being done automatically via a combination of AI robotics, and everyone’s spending money on it.

Dolce: I’m going to be a bit contrarian there. I think that we all get the hype about using the technology more. But I am more with you on the first thought rather than about the ‘hy­per’ part of automation, because it’s doing the easier one first.

First, seriously, if we cannot handle an SSI between us on a platform, there is a problem.

I want to use blockchain, DLT. I’m part of a lot of working groups pushing for that. But the challenge that we have is that it’s not standardised at all. People are creating their own plat­forms and there is no interoperability between them. In theory you can increase the efficiency, but you cannot get everyone on board.

If we are talking people - because our business is people, in­frastructure, and then solutions. Let’s start with the people: you need to train them. I’m not sure that all the middle of­fice will understand blockchain, DLT in all organisations. That means that you need to put the right training in place to make sure that the majority can handle it, not only a select few.

So yes, we need to work on the technology to make progress. But clearly, we still have unresolved issues on simple things like for example, matching SSIs between platforms, having two key players that cannot smoothly communicate on SFTR. We still have legacy issues that we must manage.

Dyson: Andrew , you mentioned very kindly some of the work we’re doing at ISLA. Nearly two years ago, I rec­ognised that, partly because of the work we’re doing with SFTR, the market was quite fragmented. We couldn’t change SSIs effectively and SFTR was forcing us to think about it in a different way.

We quickly came to the idea that we need to do two things. The first one was the creation of the common domain model, which essentially, is the codification of industry best practice around trading flows, lifecycle events.

We need to develop and sell products and services based the quality of the service. And you do that by standardising the underlying communications language. And I think this would then facilitate blockchain and multiple platforms. So that ver­sion of our market is now freely available through common source for people to use as the basis to start their development. And that should, in theory, deal with the issue about block­chain compatibility, etc.

The other thing we’ve done is we’ve started the digitalisa­tion of our master agreements. We’ve done the clause library: we’ve now got standard clauses that reflect outcomes, rather than a myriad of clauses that people trade to. And the next thing we will do is bring those into a digital format. It’s a step towards smart contracts. Because unless you’ve got that standardisation, you can’t have smart contracts. I think to your point, we’ve got to walk and then run a bit by doing the basics.

Daswani: I think that the beauty of what you’re saying, Andy , is that ultimately, what it translates to is ease of entry for others into the space, which is what we all want. I’ve talked about getting more clients coming in and making it easier for people to lend securities, and again, more transparency, which I think are the advantages that we would see from all of this. And I think we should all support that from that perspective.

Chessum: The question talks about technology changing the dynamics of the market, and we’re talking about blockchain and all things quite Star Trek in my mind. There’s a couple of things there.

Custodians have to work out how they’re going to make money out of having things like blockchain, because it means a lot less processing from their side, which means a lot lower bills from their clients. And beneficial owners are probably a million miles away from anything blockchain unfortunately, at this point in time.

But trying to bring it back to something more topical, or something more real life. Just look at what happened last year, you look at Robin Hood, that was a technological investor platform that sprung up and look at the way that changed our market and the dynamics in our market. I think there’s going to be lots of iterations of technological change that are going to have some big impacts on how we lend stocks before we get to a point where we’re going to be able to start talking about how we’re going to use blockchain for securities lending.

Geggus: I take the point that blockchain is at the moment a bit of a dream for the industry, and also how we can utilise it in its full capacity. But looking at beneficial owners, their long allocations are starting to have cryptocurrency in them, that is a blockchain asset. So, for these, the demand is going to come from the beneficial owners and we as custodians, as well as other market participants are going to need to respond. They will ask how they can mobilise them rather than just being idle assets, can prime brokerages finance them for them? Whilst there is a concept model of utilising the blockchain for the benefit of industry and having some sort of super ‘Star Trek’ style settlement process, the actual blockchain itself is going to become part of our industry very s