The securities finance industry is taking huge steps forward
with technology, experts claim, although there remains no magic
bullet to solve the industry’s conundrums.
Multiple vendors operating in the space continue to build
and refine solutions for what is a notoriously fragmented
market with complex, bilateral trades.
Post trade processing, electronic trading, central clearing
and data services are key areas of focus for fintech players
– as well as regulatory compliance.
Pirum, 4Sight (now part of Broadridge), FIS, EquiLend, IHS
Markit, Stonewain Systems and Trading Apps are some of the key
Leading figures discussed the progress and next steps for
stock loan and repo technology in Seoul this week at the
"Technology providers in the securities finance market are
actually now at the forefront of big data
management," said Pierre Khemdoudi, managing director, IHS
"The industry is making a quantum leap in technological
advancement after arguably lagging behind over the last 10
"Fortunately for securities finance participants, the
industry is now at more advanced stage which is particularly
important given the introduction of new regulations and
reporting regimes, such as SFTR."
Pirum's Ben Challice agreed that the industry has made
significant advancements in terms of bringing efficiency,
liquidity and transparency to the industry.
He added that the need for greater automation in the
securities finance process will only increase as the industry
evolves from the classic OTC model.
Pirum recently teamed up with IHS Markit to build an SFTR
solution offering a fully hosted, end-to-end service to help
customers meet reporting requirements.
More than 30% of attendees at the Seoul conference voted
that regulation was a key driver behind their technology
investment - 29% said business growth.
"While regulation and business growth don’t
always go hand-in-hand, technology is playing an important role
to bridge product and regional gaps and integrate the market,"
said Andrew McCardle, director, EquiLend
Asia, Hong Kong.
Madalin Prout, vice president, head of relationship
management at FIS, added: "When it comes to securities finance
technology, the ultimate purpose is to increase efficiency.
This can be though connectivity and integration across the
participants’ systems, providing an enterprise
level view across jurisdictions, products, currencies and
Last month, an Aite Group report suggested a more
streamlined electronic infrastructure providing
interoperability across regions needs to be built in order for
the securities lending market to grow.
Aite's analysts concluded that regulatory change will have
the biggest impact on securities lending activity and "will not