Technology is transforming operations across financial services, which will dramatically alter how the industry functions and serves clients, according to Frank La Salla, CEO of the Depository Trust & Clearing Corporation.
“The interlinkage between front office trading and back-office processing and technology is closer than ever before,” he said at the SIFMA’s Heard at Ops series.
Because of this, DTCC can continue to play a central role in bringing the front, middle and back offices together to make financial markets safer and even more efficient and resilient, he said.
This year DTCC is celebrating its 50th anniversary: “We’re celebrating our past, but we’re also looking ahead to build the capabilities to play a broader and more impactful role supporting the industry.”
According to La Salla, DTCC is taking important steps to evolve the organization, refresh their strategy and culture framework and optimize their platform to “deliver greater client value and an enhanced client experience”.
La Salla said that the opportunities for financial services are enormous, and there is no doubt that digital innovation will play a critical role in reshaping the industry.
“Technologies like cloud computing, DLT and AI have enormous potential to transform the global financial markets and improve how services are delivered in ways that we can’t even imagine,” he said.
La Salla stressed that during these early days of the digital revolution, it is important that the industry foster greater collaboration, including with technology providers, when exploring how these and other technologies can be leveraged.
“This is critical to creating the building blocks for future interoperability,” he said.
“We all share a collective goal to reduce risk, improve resilience and help make investing easier and better for the public,” he added.
“If we can harness the power of technology and coalesce the right way, the sky’s the limit,” he said.
La Salla said that DTCC is currently focused on a number of key areas across the business and shortening the settlement cycle from T+2 to T+1 is among the most important ones.
Working in partnership with SIFMA and ICI, DTCC performed due diligence, engaged a broad cross-section of the industry and galvanized support to accelerate settlement, he said.
Now that the SEC has established an implementation date, DTCC is providing support to market participants to ensure a seamless transition, La Salla said.
“We’re confident that a shorter settlement cycle will deliver real value to the industry by reducing risk, lowering clearing fund requirements, and improving capital and liquidity utilization,” he said.
Another priority for DTCC is the SEC’s proposal to expand access to central clearing for U.S. Treasury transactions.
“It goes without saying that DTCC is a strong proponent of central clearing, and the SEC’s proposal would represent a dramatic change in market structure – even more significant than the move to T+1,” La Salla said.
“We recognize there are many industry viewpoints on the SEC’s plan, so right now we’re providing thought leadership and transparency and sharing information on how our products and services can support the proposed expansion,” he said.
Finally, according to La Salla, modernization plays a critically important role in the day-to-day functioning of the global financial markets.
“When I think about this topic and how we advance our solutions, issues like resilience, fail over and stay, and recovery are top of mind,” he said.
“We need to be prepared for different scenarios, plan for them and be able to react quickly to ensure the continued smooth functioning of the financial markets,” he added.
