this is the age of disruption - six group€¦ · 06/12/2018 · automation, however looming job...

This is the Age of DisruptionSIX Post Trade Forum

London, 06 December 2018

2 | © 2018 Deloitte Consulting2 | © 2018 Deloitte Consulting

… but I might be wrong, because of

cognitive bias,

static strategic planning,

volatility, complexity, ambiguity around me.

3 | © 2018 Deloitte Consulting

In this world, no organization is an island

Contextualenvironment

Transactionalenvironment

Organizationalenvironment

• Social change

• Technology advances

• Economic shifts

• Environmental trends

• Political developments

• Industry dynamics

• Customer needs

• Competitor moves

• Stakeholder developments

• Products and services

• Operations

• Asset base

• Costs

• Branding


One needs to think holistically to understand the forces that will shape our future

Society

Politics

Economy

Technology

Environment


Some drivers of our future constantly pop up

Additive

Manufacturing

Artificial

Intelligence

Augmented

RealityAutomation

Advances in

Biotechnology

Blockchain

Systems

Climate

Change

Cloud

Technology

Competition

for Talent

Concentration

of Wealth

Crowd-

sourcing

Data

MonetizationDigitization

Demand for

Customization

DIY

Movement

Empowered

Women

Environmental

Awareness

Focus on

Transparency

Geospatial

TechnologyGlobalization

Industry

Consolidation

Internet

of Things

Knowledge

Worker

Next-Gen

Workforce

Partnership

Models

Political

Fragmentation

Mass

Migration

Regulatory

Landscape

Resource

Price Volatility

Resource

Scarcity

Sharing

Economy

Social

Media

Social

Unrest

Terrorist

OrganizationsUrbanization

Social Environmental Economic PoliticalTechnological

Society

Politics

Economy

Technology

Environment


Ten Megatrends will shape our future across various dimensions

Society

Politics

Economy

Tech-nology

Environment

5

1

9

3

6

2

8

7

410

10

5

1

9

3

6

2

8

7

4

Empowerment

Polarization

Hyper-Connectivity

Disengagement

Aging

Dematerialization

Scarcity

Blurring Boundaries

Erosion of Governance

Displacement


Global megatrendsTen drivers that will shape our future

Agingthe changes in values, cultures, and priorities across generations

#Demographic change #Inter-generational fairness

#Digital gap

Blurring Boundariesthe emergence of business eco-systems across traditional silos

#Cross-industry networks#Industry convergence#Integrated value chain

Dematerializationthe shift in the value structure from physical to intellectual

#Digitalization#IP versus Manufacturing

#Ownership models

Disengagementthe evolution of ways in which we communicate and interact

#Alienation#Alone in the crowd

#Tech replaces humans

Displacementthe movement of people, ideas, and challenges across the globe

#Global supply chains#Mass migration

#Urbanization

Empowermentthe growth and re-invigoration of ideas and self-worth

#Minority awareness#Rise of the individual#Social media impact

Erosion of Governancethe decline of the traditional world order

#Alternative structures#Decentralization#Post-liberalism

Hyper-Connectivitythe emphasis on interconnected-ness and collective behavior

#Hypersensitive markets#Internet of Things#Transparent life

Polarizationthe rise of divisiveness and divergence

#Radicalism#Rise of ideology

#Politicism of science

Scarcitythe unsustainable consumption of our natural resources

#Limits to growth#Middle class angst

#Sustainability


Future of post-trade


Drivers of change in the post-trade marketWhat is driving the future of the post-trade market?

Exemplary

Emerging

markets

Blockchain

Artificial

intelligence

Automation &

job cuts

Regulatory

environment

Collateral

management

European financial

integration

Blockchain prototypes

Cyber risks

Source: CLV Deep View screenshot [11/11/2018 – search topic “post-trade”; looking from 01/01/2017 to 11/11/2018; N = 31.5 k (World)]

Most frequently mentioned countries and regions:

Most frequently mentioned institutions [world]:

6.0 %

2.8 %

2.7 %

1.8 %

1.1 %

European Union

European Central Bank

SEC

CSD

Esma

13.0 %

6.0 %

4.4 %

3.9 %

2.5 %

United States

Europe

United Kingdom

South Africa

Russia


Main topic areas of change in the post-trade market What is driving the future of the post-trade market?

Exemplary


Although blockchaintechnologies promise post-trade processing at lower costs, uncertainty prevails with regard to energy consumption and interoperability

Blockchain1

Emerging technologies enable a higher degree of automation, however looming job cuts and the shift in skill requirements is a concern for employees

Automation & job cuts

4

In combination with machine learning, A.I. is expected to significantly increase efficiency of post-trade settlement, especially for failed trades that today require manual intervention

Artificial intelligence2

The new focus on managing systemic risk combined with a lack of clarity and co-ordination makes responding to regulatory changes more difficult

Regulatory environment

5

Emerging countries in Asia and Latin America are increasing their efforts to attract and retain inter-national investors, and introducing competitionamong post-trade players

Emerging markets3

Political and regulatory initiatives by European authorities aim to achieve harmonization in post-trade practices are likely to fun-damentally alter the post-trade landscape

European financial integration

6

Top clusters

Emerging

markets

Blockchain

Artificial

intelligence

Automation &

job cuts

Regulatory

environment

Collateral

management

European financial

integration


Cyber risks


Controversial topics related to post-tradeWhat is the sentiment towards the future of the post-trade market?

Exemplary

Emerging

markets

Blockchain

Artificial

intelligence

Automation &

job cuts

Regulatory

environment

Collateral

management

European financial

integration


Cyber risks


Sentiment summary

● positive 78 %● neutral 20 %● negative 2 %

Key take aways:

• A.I.-driven automation of tasks is perceived as a way to make the financial system more efficient, but also as a threat to white-collar workers

• Sentiment towards blockchain technologies is neutral as use cases and prototypes have a small scope and are still in their infancy

• In light of the recent financial crisis, regulation is considered necessary, however implementation lacks clarity


What is driving the future of the post-trade market?Based on A.I. research and expert interviews, we identified more than 60 driving forces that will shape the future of the post-trade market

Technological

• Peer to peer platforms

• Degree of automation

• Cloud-based infrastructures

• Real time settlement

• Artificial Intelligence

• Security of IT infrastructure

• …

Economic

• Economic growth in Europe

• Stability of the financial system

• Success of crypto currencies

• Trade volume

• Financial transaction tax

• Cost of labor

• Cooperation of Players in Financial markets

• …

Environmental

• Energy consumption of blockchain technologies

• Availability of natural resources

• …

Social

• Trust in Euro

• Trust in the financial system

• Acceptance of emerging technologies

• Demand for add-on services

• Price-sensitivity of customers

• …

Political

• Stability of the European Union

• Protectionism

• Delegation of sovereign tasks to the post-trade market

• Regulatory complexity

• Brexit

• Data protection policies

• …

Driving forces


Scenarios for the future of post-tradeWe have developed four scenarios on what the post-trade market will look like in Europe in 2030

Barely agile market Highly agile market

Giant’s heaven Real time – the fulfilled dream

Barely agile post-trade market and Integrated EU market

Highly agile post-trade market and Integrated EU market

Dancing to a Chinese tune

Barely agile post-trade market and market failure in the EU

The roaring 30’s

Highly agile post-trade market and market failure in the EU

Inte

gra

ted

EU

ma

rke

tM

ark

et

failu

re in

th

e E

U

Video

Study

https://www2.deloitte.com/content/dam/Deloitte/de/Documents/strategy/Future-of-Post-Trade-Glimpse-Paper.pdf

https://www2.deloitte.com/de/de/pages/strategy/articles/future-of-post-trade.html


Embrace uncertainty

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#dynamicstrategyDr. Florian KleinHead of the Center for the Long [email protected]

Max Schulze-FrölichManager at the Center for the Long [email protected]

CLV Deep

View VideoDr. Frank BeckerManager at the Center for the Long [email protected]