OPINION
tions like “do we really need CSDs’ and ‘if
you don’t do something around data you will
cease to exist”.
The takeaways from this conference may
well shape discussions for the foreseeable
future, so here are my main talking points
from Sibos 2018:
Tokenisation
One of the most exciting topics at this year’s
event was the tokenising of existing and new
assets, along with collateral, with securities
services firms across the board seemingly
accepting of this future reality. Here’s a short
list of some of the exciting potential new
asset classes mentioned through tokenisa-
tion: movies, royalty rights, art collections,
real estate, Beyoncé tickets and even horses.
Tokenising these current non-tradable assets
are what the likes of SIX Securities Services
and Standard Chartered have discussed
recently, along with a range of start-ups. To-
kenisation would allow any of these assets to
be included in a portfolio, without buying the
asset in its entirety. For existing asset classes,
it could allow the speeding-up of transaction
times, improved transparency and reduced
costs. Outside of the obvious new avenues for
capital generation, Broadridge explained to
Global Custodian that significant operational
efficiencies in markets across the trading and
post-trade lifecycle of the securities industry
await, along with increased portfolio liquidity
and velocity of alternative assets via improve-
ments in areas such as collateral manage-
ment. Tokenisation – it’s the future, and it’s
really, really interesting.
Disruption has been replaced by harmony
Remember the time when we were talking
about banks in the securities services space
being disrupted? Well it didn’t last long. Now
the focus is really on partnerships between
FinTechs and the incumbents, with the latter
increasingly embracing their new coun-
terparts and working with them to roll out
new technologies. While it’s still difficult to
work with major players – given their legacy
technology and how difficult it is to even get
through the front door – there seems to be a
future for both, even if Sibos did put them on
different floors of the exhibition hall.
Fireworks inside and outside of the conference
Swift put on a wonderful firework display at
the end of the event, and I have three or four
blurred and distorted photos to prove it if
you’d like to see. But more of interest to you
will be the fireworks that took place within
the conference.
To get the most out of a panel discussion,
the perfect recipe is to have individuals who
are unafraid to challenge the status quo, and
lay down some #realtalk, along with seasoned
experts from some of the largest institutions.
This creates a much more fiery conversation
and brings out the best in everyone. When
Club @ Sibos
this happens, we get more real and honest
answers because often the publicly delivered
corporate message does not stand up against
the innovators and disruptors who call them
out for some of their archaic ways.
End of the great re-regulation
One panel on regulation! At a four-day finan-
cial services conference, can you believe that?
This was a significant change from previous
years where regulatory discussions have
dominated the agenda. The biggest regulation
changes are behind us now and the ones on
the horizon are far enough away not to worry
too much. This is allowing financial services
firms on the buy- and sell-side to concentrate
on innovation and business decisions as op-
posed to arduous regulations like the colossal
MiFID II rules which came into force at the
start of the year.
Enjoy this downtime though as next year
there could be much more of a focus on
CSDR, SFTR and future cyber-crime, ESG
and other incoming regulations.
Collateral mobility is getting fixed
We would like to wholeheartedly apolo-
gise for the years of stories on a potential
collateral shortfall. In hindsight that wasn’t
so interesting, and the lack of high-quality
liquid assets never really occurred. What has
followed though, are substantial costs and
complexities in collateral mobility, something
the likes of Deutsche Borse, Clearstream and
a group of banks are trying to fix. HQLAx is a
securities lending platform using R3’s block-
chain technology, where the use of tokens
allows collateral to stay fixed with the legal
entitlement moving and being held for safe-
keeping by a custodian. Participants believe it
will save billions of dollars in costs associated
with collateral and will expand in the coming
years. Another example of things actually
happening with blockchain technology.
A backwards step for diversity at Sibos?
Of the securities services panels I attended I
was surprised to see such a lack of diversity
with regards to speakers, at a conference
which in previous years has had such a focus
on the topic. I have previously applauded
Swift for being forward-thinking, and includ-
ing discussions around diversity but there has
to be more of an effort when it comes to panel
discussions. There was often one woman
within a session, but never did I see even a
50/50 split. In fact, the only all-female line-
up was in the sole diversity discussion. That’s
not the only issue these professionals are able
to discuss. There was a lack of different eth-
nic backgrounds in these discussions, which
did not seem representative of the attendees
of the event. Why is it that people of an Asian
background only seem to be invited to discuss
Asian issues such as India and China, and not
wider industry matters? Data, crypto, fintech,
collateral and all the other major securities
services talking points are not restricted to
Europe. This was my takeaway, with no agen-
da of targeting the conference or organisers
and I can’t speak for other streams such as
payments or Innotribe, but it just seems more
of a shift towards an equal gender split should
not be difficult considering the growing num-
ber of women in senior securities services
roles across the industry.
Data challenges for post-trade providers and
their clients
As you would expect, data came up on almost
every panel, all with undertones of the chal-
lenges both the buy- and sell-side are facing.
For custodians, they are sitting on mountains
of potentially valuable data, but rules and re-
strictions mean they are having to be careful
in how they package it up and provide it to
clients. Meanwhile, asset managers have been
slow to incorporate big data into their day-
to-day operations, despite the cutting-edge
tools on offer to deliver. Essentially the data is
out there and panellists agreed it could help
steady the shift towards passive strategies,
but delivering it and monetising it is a chal-
lenge for post-trade providers.
Did securities get the cold shoulder?
Swift may disagree, but in my opinion, the
Sibos securities stream over the four days was
stripped back a bit this year in terms of pres-
ence on the agenda, with broader financial
technology and data discussions seemingly
taking over some of its slots. Perhaps that’s a
sign of the importance of technology discus-
sions at present and the declining promi-
nence of regulations and a waning interest in
collaboration and business model discussions.
ISSA timed its reports to perfection
Whoever is in charge of PR for the Interna-
tional Securities Services Association (ISSA),
give yourself a pat on the back. ISSA reports
were referenced throughout the conference,
primarily the takeaways from the crypto
assets report and its recommendations for
cyber security risk management in securities
services. I can’t say I’ve read them cov-
er-to-cover but it’s good to see an association
exploring the most current and relevant
topics.
Top speakers
There were some great speakers during the
four days, but some really stood out from
the crowd, namely Joseph Lubin, CEO of
Consensys, Blythe Masters, CEO of Digital
Asset, Justin Chapman, global head of market
advocacy & innovation research at Northern
Trust, Fiona Gallagher, head of securities
services at Deutsche Bank, and Tim Lind,
managing director, DTCC Data Services. For
me, they were the pick of the bunch.
*Jonathan Watkins is managing editor of
Global Custodian
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