Financial Market Transition: Legacy, Growth and Collaboration
Today’s securities operating model is being pulled in multiple directions at once. A new report from Nasdaq and ValueExchange details the challenges and opportunities facing financial market infrastructures (FMIs).
Regulation. Growth. Resilience.
These are the most pressing priorities for global FMIs as they navigate an increasingly volatile and changing business environment.
To develop a global pulse on how 300+ decision-makers across the post-trade value chain are thinking about transformation, Nasdaq and ValueExchange partnered to survey FMIs and participants on their challenges, budgets, modernization strategies and more.
Here are the top takeaways:
Who Participated?
As a truly industry-wide survey, we have benefited from the insights of over 300 decision-makers from organizations across the capital markets globally in compiling this research.
What’s the Top External Pressure Impacting Your Strategic Agenda?
64%
The scope and scale of regulatory imperatives like T+1 and CSDR are forcing FMIs to assess their entire operations. The ultimate impact is that regulation can no longer be satisfied with patchwork solutions but platform transformation.
16%
Emerging technologies bring new business opportunities but they also bring competition. Digital assets can open doors to new revenue and cloud is a core enabler of many firms’ transformation agendas. The challenge in translating technical opportunities into concrete workflow efficiencies for FMIs is complex.
11%
How can FMIs achieve compliance and growth all while fulfilling their core obligation to market resilience? That’s the big question—and it’s complicated by legacy upkeep competing with scalable modernization.
The Legacy Issue
1/3
FMI Systems Worldwide are Expected to Reach Their End of Life by 2028
78%
FMI Budgets are Dominated by Legacy Technology Management
10Y+
Many Post-Trade Systems are Over a Decade Old
Our core system is soon going to celebrate its 50th birthday. It works, it’s impossible to break – and yet it is the biggest obstacle we face in every change project that we’re running.
-- Head of Operations, Leading FMI
[With] T+1 and a new CSD system in the same year we are trying to drive our car 50% faster and we’re changing the tires as we go.
-- Head of Custody, Leading Custodian Bank
What’s Driving the FMI Operational Agenda?
Management of Legacy Processes and Technology
Talent Management
Expansion into New Assets and Services
Cybersecurity
Cost Reduction
Financial Market Transition
Barnaby Nelson, CEO of the ValueExchange, and Roland Chai, EVP and Head of Marketplace Technology at Nasdaq, discuss insights gleaned from a jointly produced global post-trade survey on spending, modernization and transformation trends.
COO, Leading CSDThe first person we hired in our platform transformation project was a staff coach. We needed to get all of our teams ready to be part of a change team well before we could start looking at systems and processes.
Tomorrow’s Headlines?
Cloud Continues to Accelerate
12% of FMI budgets go toward cloud migration, the second-biggest trend behind legacy maintenance.
Newer Asset Classes Gaining Interest
Participants ranked carbon credits, crypto and REITs as more important to their future strategies than bonds—and are looking to FMIs for standardization and market efficiencies.
Big Bet on Data
67% of firms expect to launch new data analytics and reporting capabilities within three years, far outpacing any investment area.