It’s anticipated that 2024 will see greater adoption of innovative technologies to meet the demands of the new digital world. As a result, there have been ongoing industry conversations on how these advanced technologies can usher in a new way of serving financial markets.
To gain deeper insights into the progress of firm-level digital transformation, DTCC recently hosted an interactive client roundtable discussion in Singapore with Lynn Bishop, DTCC Managing Director, Chief Information Officer, and Renee LaRoche-Morris, DTCC Managing Director and Chief Financial Officer. Alongside DTCC’s senior leaders in Asia Pacific, Bishop and Laroche-Morris discussed how firms are embracing promising digital trends – to continue improving operational efficiency.
Related: DTCC CEO discusses the road ahead for DLT and digital assets
Exploration of Innovation
Most firms are on a similar journey: exploring the world of distributed ledger technology (DLT), “buzzy” tokens and other digital solutions with the hopes of crafting valuable products and services for the marketplace.
While recognizing the potential of how advanced technologies may have the capabilities to transform DTCC business models and operational processes, there are several aspects to consider. Among the key considerations are designing and integrating new digital solutions with existing technology stacks and workflows, connecting with external parties and ensuring digital resilience – to recover quickly from sudden business disruptions, manage cyber threats and more.
Managing Digital Silos
The conversation moved toward the challenges of integrating isolated proof-of-concept digital projects into an already established and interconnected ecosystem.
“We would like to capitalize on the digital capabilities and resources that we have secured through our acquisition of Securrency to promote interoperability and harmonize standards, processes, and governance,” Bishop shared. “A common set of industry guidelines will allow us to solve the industry’s current challenges and build a robust, scalable, and resilient architecture to exchange digital assets in a safe and compliant mode – to reduce risk and smooth the path for industry adoption.”
The architecture in place will allow us to provide the right environment to accelerate ecosystem development and bridge best-in-class industry practice with leading technology, thus supporting our clients on their digital transformation journeys.
The need to ensure regulatory compliance aligns with the current observation that regulators are open to listening and paying more attention to developments in the digital space. The regulators are also stepping up on digital learning.
A Seat at the Payment Table
As the industry continues to look at digital innovation seriously, the discussion turned to payment rails – hailed as the unsung heroes of modern financial transactions.
Commenting on our role in leading digital asset adoption, LaRoche-Morris remarked, “DTCC’s investment in Fnality, a provider of DLT-based wholesale payment system will help foster the development of new payment rails that will be necessary to build a robust digital infrastructure to enable interoperability and adoption of digital assets.”
While payment is not necessarily our sweet spot, it is important for us to be at the table with investments like Fnality – to connect to the payment piece of the digital lifecycle and be at the forefront of what is next in payment.
“We sit on the Regulatory Practice Group to make sure that we are up to date with Fnality’s progress on the establishment of a world-first global liquidity management ecosystem that empowers new digital payment models in both wholesale financial markets and emerging tokenized asset markets,” shared Laroche-Morris. “This will ensure that Fnality’s direction of travel will serve the industry’s needs.”
The Digital Future
Given the tremendous progression that we have seen in innovative technologies, the pace will continue to quicken. While innovations will help to provide better services and drive business growth, equal attention will also need to be placed on cybersecurity and governance to manage risks and thrive in the new digital world.