CMTI 2019: Capital markets in a “war” with disruptors
Investment banks and capital markets firms are in a “war” with challengers and disruptors in Asia, where innovation is more like a “revolution” than an “evolution”, according to David Gledhill, senior advisor at DBS Bank.
“We come to the office fighting every day – fighting against some massive disruption,” he says, speaking on a panel at the Association for Financial Markets in Europe (AFME)’s Capital Markets Technology and Innovation conference in Paris this week.
“You only have to look at what companies like Alibaba and Tencent have done to know we’re at war,” says Gledhill. “The question is what battles you fight and how you fight them.”
For Gledhill, platformification is a “generic word”. “Are you going to be a participant, an orchestrator or a creator, and in what markets are you going to do each? They’re all moving at separate speeds.”
Gledhill adds that DBS has 450 application programming interfaces (APIs) at work. “We thought it would be ‘build it and they will come’ and they didn’t come. The biggest people who signed up to our platform were IBM, Accenture, CitiBank, and Standard Chartered. Not a single customer.”
“The trick lies in shifting the culture of the company. We need salespeople who can sell APIs, connectivity and platform thinking as well as your standard banking platforms.
For Cecile Bartenieff, COO global banking and investor solutions at Société Générale, capital markets will go through the same disruption cycles as any other industry. “Disruption has to be critical to our business. Technology is at the heart of what we do, and being able to harness new models will be absolutely key.”
Oliver Lens, director for capital markets strategy at Swift, says that in every evolution there are winners and losers. “Everyone will need to look at what their unique value proposition is. Some will be faster than others in doing so.”
Lens adds that market utility services like Swift are well placed to step back from the market and help the community move forward as a whole.
“At the same time there needs to be a level playing field, and that won’t be an easy task. How do you keep standardisation stable? Everyone needs to be speaking the same language.”