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“ All that stuff will lead to disruption , and if it ' s going to find a place to disrupt , it will squarely be in the securities finance space .” In keeping with Tarantino-esque beginning to this article , let ’ s now take a look at how we arrived at this positive conclusion to the roundtable discussion .
A perfect storm of catalysts for innovation When it comes to technology , securities finance , like many facets of the financial services world is hampered by layers upon layers of legacy technology and the ‘ we ’ ll do it the way we ’ ve always done it ’ mindset .
“ When you think about the securities financing market , so much of the backbone comes from an infrastructure perspective - and I am not just speaking about the technology but operations as well - was created around the time when the first securities lending and repo trades were being done . We ' re talking about the late 80s , early 90s where that came into formation ,” said Kelly Mathieson , chief business development officer , Digital Asset . “ Now you fast forward to the 21st century , and we ' re operating with the same infrastructure with a higher order from a scale of volume and activity to a wider range of assets , market participants and transactions that need to be collateralised with ever increasing amounts of collateral .” Along with the growing complexity of the market and activity , a range of additional factors are contributing to the perfect storm of catalysts for innovation . The advent of new technologies plays a major part - from DLT to cloud and artificial intelligence - while the notion of tokenisation represents an exciting development across the capital markets , with securities lending being a perfect initial use case . “ It ' s just such a big and established market , spanning multiple geographies and it ' s been layers upon layers over the years . Therefore standardisation and streamlining haven ' t always been front of mind , understandably ,” highlighted Amar Amlani , head of EMEA digital assets , Goldman Sachs . “ It ' s just a huge opportunity set to go and tackle . If you think about the interest rate environment , especially from a bank perspective , the need to utilise assets that are on a balance sheet is ever more important just when you look at unsecured funding cost . “ There ' s solutions out there which are trying to tackle the whole thing in one go , but there ' s also so many pockets within a certain market or geography where you can go there first and make something work and then grow it out from there .” Gary Klahr , who spent almost 20 years with Goldman Sachs before joining EquiLend as director , strategic initiatives , added : “ The industry needs to process more flow year-over-year and to do it more accurately because of the regulatory processes – and we need to do it faster . We also need to figure out a way to get greater efficiency from technology than was
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