this is the age of disruption - six group€¦ · 06/12/2018 · automation, however looming job...
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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
4 | © 2018 Deloitte Consulting
One needs to think holistically to understand the forces that will shape our future
Society
Politics
Economy
Technology
Environment
5 | © 2018 Deloitte Consulting
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
6 | © 2018 Deloitte Consulting
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
7 | © 2018 Deloitte Consulting
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
8 | © 2018 Deloitte Consulting
Future of post-trade
9 | © 2018 Deloitte Consulting
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
10 | © 2018 Deloitte Consulting
Main topic areas of change in the post-trade market What is driving the future of the post-trade market?
Exemplary
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)]
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
Blockchain prototypes
Cyber risks
11 | © 2018 Deloitte Consulting
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
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)]
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
12 | © 2018 Deloitte Consulting
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
13 | © 2018 Deloitte Consulting
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
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Video
Study
14 | © 2018 Deloitte Consulting
Embrace uncertainty
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Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private
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Copyright © 2018 Deloitte Consulting GmbH. All rights reserved. Member of Deloitte Touche Tohmatsu Limited
#dynamicstrategyDr. Florian KleinHead of the Center for the Long Viewfklein@deloitte.de
Max Schulze-FrölichManager at the Center for the Long Viewmschulzefroelich@deloitte.de
CLV Deep
View VideoDr. Frank BeckerManager at the Center for the Long Viewfrbecker@deloitte.de
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