[ N E W S
R E V I E W
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A
huge decision awaits capital
markets firms in the coming
weeks and months: do you deem
technology innovation and automation
projects non-essential in the current
environment, or are they more important
than ever before?
When COVID-19 began spreading
globally and a pandemic was confirmed,
firms had to act fast in setting up staff
remotely and implementing business
continuity plans (BCPs). This took
precedence above all else.
While we remain in the eye of the
storm, it’s in the coming weeks that we
will discover whether these already
much-needed technology projects will
be prioritised as budgets tighten and
firms are forced to define what is essen-
tial or not.
This represents a crossroad for the
securities services community which
already lags behind other industries in
terms of technology and innovation, and
is still hamstrung by its legacy systems
that have been in place for over a decade.
“Striking the right balance between
short-term and long-term planning for
capital markets is being looked at closely
by many firms within the industry,”
says Matt Simon, senior analyst at Aite
Group.
“The initial reaction to ensure the
safety and health of employees has had
to be evaluated in context to business
operations and client and partner rela-
tionships. Discretionary spending for
so-called nice-to-have, or experimental
projects, are to remain further down the
list until business conditions return to a
more normal and opportunistic state.”
After years of discussing the potential
of new technologies, swatting away talk
of disintermediation and pinning some
initial work on low-risk areas of the busi-
ness, securities services providers will
now have to weigh these up against their
current situations with staffing, budgets
and operational resilience. Should risks
or concerns over these factors be offset
by de-prioritising technology projects,
then it’s a no-brainer, the latter will be
sidelined.
Ironically, many of the projects expel
the need for manual intervention at a
time when the industry could have bene-
fited most from automated processes.
“A large number of people could and
probably should realise the lessons of
this last phase and rush to automate and
40
Global Custodian
The fate
of capital
markets
innovation
projects
C O V I D -1 9
Spring 2020
I M PA C T S ]
hangs in
the balance
Technology projects which securities services firms have spent
the best part of a decade exploring might be put on hold at
a time where their importance has been epitomised.