Banks on Securities Finance Technology

Finadium
March 2016

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Technology is a central consideration in capital markets business strategy. In changing markets like securities finance, the right technology planning and execution can mean the difference between a successful franchise and a struggling endeavor. While technology has long been recognized as a critical aspect of the business, it has in some ways become the alpha and omega of executing on business strategy – the first and last point on the planning and implementation loop. Few firms can now contemplate changes of any kind in their business or in their organization without finding the right technology to enable it.

Layering in the possibilities and complexities of emerging technologies, such as blockchain vendors and networks, it becomes even more important to understand how technology decisions are made, who is making them, and how business strategy is shaped by these decisions. Securities finance, as much as any part of the financial system, is an ecosystem in which firms operate according to sometimes conflicting priorities: how any single firm approaches the marketplace has strong effects on all other firms, both positive and negative. All stakeholders need to have a high degree of clarity about how other firms are trending; what any firm’s peers and competitors do and how they think has immediate and long term impacts.

This Finadium research report investigates the changing landscape of technology and operations strategy of securities finance at banks today. We interviewed representatives of a variety of institutions with different business models spanning the organizational chart. We asked about the process of planning and implementing securities finance technology strategy and how organizational structures are adapting to reflect change. The report measures how much progress has been achieved by banks in moving towards an optimal securities finance strategy and the challenges that remain.

Securities finance and operations professionals, technology strategists and vendors serving the industry will benefit from reading this report.

This report is 26 pages with 11 exhibits.

TABLE OF CONTENTS

■ Executive Summary

■ The Critical Nature of Technology Strategy
– Methodology

■ Technology Priorities
– Priorities of Small Firms vs. Large Firms
– Priorities by Role of Survey Respondents
– Outstanding Questions

■ Budgeting and Planning
– Is Technology Spending Limiting Business Growth?

■ Build, Buy or Partner: Views on Internal vs. Vendor Technology

■ Technology and Business Model Development

■ About the Author

■ About Finadium

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