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Financial Markets Infrastructure - Case for Change

An Exchange Perspective

The exchange of the future will be characterised by new revenue streams, streamlined operations and a symbiotic network of ecosystem partners, made possible by emerging digital shifts. To develop winning value propositions, Financial Market Infrastructure organisations must focus on some key design principles, placing customers / users at the epicentre.

Over the past few years, some global exchanges have embarked on digital transformation journeys to reshape business models, redefine customer / employee experience, and strengthen compliance. The digital future of exchange operations is imminent.

For the past 25 years, trading has been primarily electronic, where orders are routed to exchanges, then validated, matched, and executed.

With billions of orders and executions, technology-enablement has been essential to the access to the traded markets, development of new products and services available to a broad investor community.

Every day, we see advances on high frequency trading, co-location venues and direct market access for trading partners, but we have not seen the same level advances in the non-trading functions of the exchanges. Many operational functions remain dependent on spreadsheets, manually intensive operations and a limited control environment.

In this paper, we analyse the areas of focus for exchanges as they begin their journey to move to more efficient and effective, non-trading operational functions.

Majority of operations leaders believe their work will be transformed by emerging technologies within three to five years…. This modernisation journey will not be easy, but organisations that avoid the journey risk being displaced in the era of digital disruption.

The digital future of exchange operations is imminent, a theme we will continue to demystify through the reimagining the future of capital markets series.

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