Understanding the digital revolution in the securities markets
The key to the digital revolution in the securities markets is not digital technology but digitised data. The value of the Cloud, blockchain, robotic process automation (RPA), artificial intelligence (AI) and machine learning (ML) lies less in their speed or capacity than in their ability to store, process and analyse data to complete transactions, report and service holdings and yield insights for decision-makers.
At present, participants in the securities markets exchange data in a wide variety of messaging formats, including ISO 20022, ISO 15022, FpML, FIX as well as a range of proprietary standards, emails and spreadsheets, analogue forms such as faxes and, increasingly, through non-standardized Application Programme Interfaces (APIs). This multiplicity of data formats is slowing the progress of the data revolution in the securities industry.
The new class of centralised and decentralised data and transaction management platforms have to invest in data management and normalisation tools, increasing costs and reducing the variety and timeliness of the data they share with their users. But the multiplicity of formats is not going to diminish any time soon.