Blockchain and the applicability of distributed ledger technology will remain key themes in the coming year. Over
the course of 2016 through increased experimentation
and proof of concepts, we as an industry achieved a much
more realistic view of the applicability of the technology
and how fast it is going to develop.
In 2017, we expect to see further progress, as the
technology continues to mature, and as some of those
concepts move forward to address real business opportunities. The Linux Foundation’s Hyperledger Project is also
progressing with multiple open source based initiatives,
including significant contributions from many vendors
and financial industry firms illustrating the benefit of the
group’s open source collaborative approach.
If 2016 was the year of the mandatory clearing, 2017 will be the
year of the un-cleared margin
rules, with mandatory daily
variation margin calculation
starting 1 March for most non-cleared bilateral OTC derivatives
contracts. How the buy-side will
cope with challenges such as
the cost of the new infrastructures and the rise in operational
risk will be one to watch.
As a blockchain technology provider, we expect to see three
key trends in the way DLT is used in 2017.
For financial institutions, 2017 will be the year of small
scale adoptions of use-case specific DLT products beyond
in-house experimentations based on generic products, often
unfit for productive environments. In particular we anticipate
more activity around information flows on DLT such as proxy
voting. We also expect to see new solutions emerge catering
to asset flows, especially OTC traded assets or those which
are subject to less stringent regulation.
For technology providers, 2017 will see a continued trend
towards increased openness (open source), the adoption
of more open technology architecture principles, and more
clarity around how different solutions can interoperate.
For regulators, 2017 will be a year of greater understanding
of the technology and an even higher degree of willingness
to engage with solution providers, with a view to setting-up
The most important feature of tomorrows market
will be the need for banks
to avoid using balance
sheet in transactions. This
prevailing mandate will
impact a wide range of
activities not limited to but
certainly including securities finance.
I expect centrally cleared
repo and securities lending
will gain a solid foothold in
the markets for the same
reasons that listed derivatives products make sense
- lower balance sheets.
James Treseler, global head of
cross-asset secured financing,
Thorsten Peisl, CEO, RISE Financial Technologies
Rob Palatnick, managing director and
chief technology architect, DTCC
Pierre Lebel, head of collateral advisory,
prime services, Societe Generale