Financial Market Participants, their objectives and expectations for 2016


There are various financial market participants, and each one of them have different objective and expectations, the expectations would keep changing over a period, I have tried to capture their goals & expectation in a near to mid- term future and what are the major budget drivers for the financial services industry in 2016.

Clients/Counter-parties

Access to more markets, asset classes and alternative investment products having more liquidity, lower complexity and greater probabilities of gains.

Expectation

  • Increased speed of dispute resolution and frequency of the transactions, dispute resolution, has consistently remained the top frustration factor for consumers in the past five to ten years, which calls for the need of next generation dispute management and CRM systems.
  • Real-time information visualization systems with integrated alerts with greater transparency
  • Multiple channels of trading activities( a hybrid of the traditional and non-traditional ways) with enhanced customer services

 Broker/Dealer/Agents

The Broker/Dealers striving for more accurate simulations, prediction of markets for enhanced profits, meeting the latest financial standards and regulations

Expectations

  • Developing new processes and methods of trading securities in the markets by process and product re-engineering by platform complexity reduction
  • Enhancing the enterprise risk management (ERM) system and creating the risk appetite frameworks (RAF)
  • Creating and using more accurate tools to enhanced risk management, as the whole concept of “Too BIG to FAIL” is not true as more, regulators can & have the liberty of bringing down the big banks

Budget Drivers for 2016

Stock Exchanges & Trading Venues

Stock exchanges and trading venues success depends on transparency and credibility in the dealings of the securities market; that is achieved by disseminating trading information to the largest possible number of dealers and interested parties

Expectation

  • Lower data latency with higher data accuracy so that the accurate trading information transmitted to broker/dealers and various communication channels like (ECN’s, DMA network)
  • Exchange consolidation is driving the new regulatory architecture

 Data Vendors

With the new regulations like MiFID, BASEL III, FATCA, EMIR, etc. Markets participants are dependent on the data vendors to provide more accurate data.

Expectation-

  • Moving towards collective models (Joint ventures) of data processing, as current market has many big data vendors like Bloomberg, IDC and some niche vendors EXTEL, with no clear market leaders

  • Aggregation of structured and non-structured dynamic reference data like price, corporate actions, counterparties transactions, rating, etc.
  • Data remodelling around various legal entities
  • Significant market drift towards the “as a service” model (InaaS, PaaS) for reference data

 Regulators

They are the watchdogs of the financial markets, who insure’s that markets are safe with low volatility

Expectations

  •  Creating more standard processes for accounting and reporting across various market segments Intra-day margining for early fraud detection
  • Better surveillance & controls process resulting in automatic alarms in case of any fraud and suspension of trading activities.
  • Longer data retention cycles for auditing and enhanced reporting and accounting standards

 

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