Everything tech 

The 2023 EU Beneficial Owners’ Roundtable was moderated by Andy Dyson, the Chief Executive of ISLA with EquiLend as the lead sponsor. The roundtable was held in late March with a panel of industry experts discussing topics from the data, ESG, collateral and the change from 2022 to 2023.

A portion of the 2023 EU Beneficial Owners Roundtable is available in the video above. See below for a transcript of the highlights. 

Andy Dyson, Chief Executive Officer, ISLA: What we’re seeing in the technology space,
what you’d like to see and what we expect to happen next?

Andrew Geggus, Global Head of Agency Lending, BNP Paribas: I just wanted to have a look back at what we discussed last time around and what has actually happened over the last 12 months, we made some predictions at the time, some have panned out, some haven’t.

Firstly, we spoke about distributed ledger technology at length last time around. There is a divergence of views between some people saying it’s more of a pipe dream / longer term, and some people saying there are real use cases shorter term.

What we have seen over the last 12 months have been a select number of use cases, I think there has been progress made by HQLAx, as well as JP Morgan’s Onyx business unit – I think they’ve publicly announced different use cases. It’s not going to be rapid in terms of its development, however each use case is a step in the right direction from my point of view and we can probably touch on the potential benefits of distributed ledger technologies further down the line.

Secondly, we also spoke about AI, this is something I think firms are using much more internally. I think a lot of firms are using robotics and AI in their internal systems but I haven’t seen a sort of “mass-adoption” within the Securities Finance market of a single product.

Lastly, we spoke about standardisation. We spoke quite at length about how to really benefit from technology and all the capabilities it has. We needed much more standardisation across the market, we spoke quite at length about the CDM work, the Common Domain Model that ISLA is doing, and that has actually progressed quite significantly over the last 12 months in conjunction with ISDA and ICMA.

Despite speaking about all these fantastic future technologies, I think in 2023 the key things that we need to address with the help of technology are trade matching and settlement, onboarding, KYC, and operations exception management. I think with that, one of the key points, for me, is that, luckily, technology providers in our industry are coming up with solutions. I think this is absolutely key – is interoperability.

Ernst Dolce, CEO & Co-Founder, Biben Capital Markets: I think there’s another impact – if the regulator finds that the market participants did not play the game – i.e. they did not increase the “interoperability” – probably, as Cassie mentioned, it will become more expensive. The fintech that are not playing the game of “interoperability” will disappear because you will have the big firms that will go after that market. Currently, in Europe, I know at some firms that are doing their own platform and looking to emulate Blackrock Aladdin’s model, because they don’t believe that the fintech are taking seriously the lack of interoperability.

Olivier Zemb, Head of Equity Finance and Collateral Trading, Caceis Bank: I agree with you. We need to have some kind of harmonisation across the industry but at the same time you need to deliver tailor-made solutions for your clients. We need to provide more and more granular details. There are two things to look at, the big picture and also the clients’ view.

Nick Davis, Executive Director, EMEA Head of Relationship Management, J.P. Morgan: If we go back to the start of the year and what occurred across the financial sector, proves that transparency into a client’s lending program remains a key requirement. Clients want to be able to see their risk profiles, collateral, counterparty exposure and revenue performance. Having that in-house technology is key to meet those requests from your clients.

Dimitri Arlando, Head of EquiLend Data and Analytics EMEA & APAC: Trading desks are now actually saying, show me the settlement rates because that’s important to us. That’s really driven by the search for efficiency. As desks are being squeezed from a fee perspective and everything is becoming more expensive in general, people try and find ways to be more efficient and our data can help you do that.