Idea Group examine Digital Transformation at The Global Custody Forum
The securities services businesses are seeing increasing pressure to adopt the latest FinTech breakthroughs into their operating models, and so it was not surprising to see the topic looming large on the agenda of the Global Custody Forum. The Forum is one of the leading events for this particular sector, and saw a significant North American contingent travel to London in addition to the strong European attendance.
In one of the liveliest sessions of the day, industry legend Dominic Hobson moderated a panel consisting of Chris Sier (FiNexus), Sonia Maloney (Norrep Capital), Rakesh Vengayil (BNP Paribas IP), Kevin Josling (Xceptor), and Idea Group's Bill Gourlay. The discussion looked at the hype that is so prevalent around topics such as blockchain, in order to try to identify what the real value is. An audience poll saw 80% agree that distributed ledger technology is "Useful in some areas". Moving onto the risks of new technologies, the audience was mainly "excited" by the prospect of increasing use, but there was still a sizeable group who believed that their management was somewhat "bewildered" by what lay ahead.
When it came to discussing the opportunites that digital technology can bring, the audience agreed that it was a combination of lower costs, enhanced products and new business opportunities. They also believed that the rise of labs, accelerators and sandboxes was primarily due to a desire to innovate, although a good proportion still believed it was more down to a flock instinct.
Bill shared Idea Group's belief that there a numerous FinTech and RegTech firms in the industry who are able to be innovative and agile, so represent a much better opportunity for progression than large organisations attempting to do it themselves. Building partnerships between these smaller players and the existing large financial services organisations creates a highly productive and effective model for success. However, he also sounded a note of caution not to forget that, for all the excitement of new technologies such as Big Data, Internet of Things & Blockchain, there are still some very basic and easily achievable benefits to be gained by simply adopting initiatives such as GAIA (gaiastandard.org) which will deliver significant returns in a much shorter timeframe.