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Technology and technology-enabled competition: Cost pressure to the core: Counter New growth paths: Develop and ize new revenue Cost sharing for selected R&D investments: Collaboration
Larger-scale adoption of Artificial Intelligence/Machine continued pressure on top-line revenues by opportunities by investing in new products and on key investments in digitalization.
Learning/DLT, new business models based on new placing additional focus on strategic cost services, possibly built on data and Artificial Intelligence,
technologies, as well as new entrants to the industry reduction, doubling down on cloud-enabled recalibrating distribution channels and service offerings Consolidation within the industry: out of the scope of this
from the technology sector. modular fintech ecosystems to achieve to reflect the increasing importance of buy-side clients paper as ISSA would not be involved.
higher levels of efficiency, forcing higher and transforming underlying legacy IT infrastructure to
Depending on the business model, scale and geographic levels of service standardisation across increase flexibility for future innovation.
footprint, four strategic considerations will be critical for clients, and pursuing strategic participation New Growth Paths
players in the Securities Services industry: choices and industry consolidation. Industry disruption: Rethink positioning along the
current post-trade value chain to ensure preparedness for Client value-add increase: Identification of areas to
potential industry disruption, potentially by filling capability increase the value they provide to their clients.
gaps with partnerships and acquisitions, and reviewing
insourcing and outsourcing decisions. Private Markets and digital assets: Development of a
shared Private Markets/Alternatives/token infrastructure.
COVID-19 early lessons learned: Embed lessons
learned from operating our businesses during the Pursue a more rigorous Front to Back cooperation:
Exhibit 3: Change in technology and technology-enabled competition COVID-19 pandemic into future operating models by Identification of beneficial areas to address opportunities.
Average ratings of disruption potential and relevance for the industry from the perspective of Custodians and CSDs reviewing and rethinking existing (digital) transformation
programs across the full value chain of activities, Geographical cooperation: Facilitation of increased
Custodian CSD critically reviewing costly and manually intensive but collaboration, specifically among smaller players.
non value-adding activities, and adopting new ways
Underlying drivers of change Disruption potential Relevance Disruption potential Relevance
of remote and resilient working into Business as Usual
Artificial Intelligence and machine learning (BAU) capabilities. Considering the findings of this Industry Disruption
report, potential areas for collaboration within ISSA and
Application programming interfaces (APIs)
between its member firms for the next three to five years Joint positioning: Joint efforts to accelerate the
Regionalisation of technology regulation could include the following topics. These are grouped development of ESG standards.
according to strategic considerations and ordered within
Cloud adoption
those groups by the feedback reflecting the early view of Cyber threats arising from Cloud and Quantum Computing:
DLT and blockchain adoption ISSA Members who participated in the webinars and the Joint analysis and sharing of perspectives on risks.
poll. This ordering has then been optimised for execution
Cyber security
likelihood. Some of the ideas presented may not be SaaS ecosystems: Development of an interoperable SaaS
Industry incumbents buying Big Tech achievable by ISSA and its members alone and/or may ecosystem for data analytics and workflow solutions.
require extensive collaboration.
(Big-) Technology firms entering the industry
Covid-19 Early Lessons Learned
Fintech firms entering the industry
Cost Pressure to the Core
Partnerships between incumbents and tech. firms Best practice sharing digitization: Sharing of best practices
Industry APIs: Joint development of standardized industry and lessons learned from the accelerated digitization.
Adoption of quantum computing
APIs for core industry processes.
Uneven playing fields for incumbents and tech firms Best practice sharing: Sharing of best practices with
Common data standards: that facilitate data analytics. respect to the implementation of regulation and risk
Regulators enabling key technology in FS
management/operational resilience.
Large scale adoption of RPA and automation Front-to-back ecosystem cost reduction: Identification of
areas that lead to inefficiencies for all. Best practice sharing future of work: Sharing of
best practices and lessons learned from operating
Positive impact Neutral impact Negative impact No impact Source: ISSA Member survey Business Process as a Service (BPaaS): our businesses.
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