Ann Marie Bria, DTCC Executive Director, Corporate Actions Business Management.
The Bank Depository User Group’s (BDUG) annual meeting is an important outlet for DTCC to hear valuable insights that help shape our new services, expand our product capabilities, enhance our applications and prioritize business initiatives to ensure we are providing solutions that are most important to our clients.
Recently, I gave the keynote speech where I shared how collaboration with our industry colleagues has helped shaped our thinking about the transformation of financial services based on generational shifts, the impact of fintech and digital platforms, and the importance of data intelligence.
Financial Services Transformation
We all hear the buzz words about new technology: distributed ledgers, artificial intelligence, cloud computing, cryptocurrency, privacy regulations, risk models. There’s no shortage of opinions about how our industry will evolve, or the many ways we’ll need to “reimagine our business” in this new, undefined world.
While our industry is always changing, today we’re in the midst of a technological revolution that will profoundly alter our business in profound ways. More than that, the velocity of this change will continue to accelerate in the years ahead. That’s why we’re proactively working to define our path forward and collaborating with our clients to identify innovative, new ways to solve the industry’s top challenges.
So, what’s driving the transformation? A combination of new technology and a clear generational shift in the industry.
Next year, millennials are expected to represent 50% of the workforce, and that group—along with Gen Z’ers—also represent a significant portion of the consumer base. They grew up with technology, and they rely on it for every aspect of their lives. They are plugged in 24/7.
Because of this, they see the world through a very different lens, and this will have a profound impact on all aspects of our industry. Nowadays, young people aren’t following the traditional models in their own finances. Their loyalty is based primarily on convenience. They want to transact business over their cell phones in real-time, with an exceptional, frictionless and entirely digital client experience. They want speed, ease and integration, and they’re likely to dismiss a website that’s difficult to navigate or too slow to load.
Millennials want providers that customize their services, with price transparency and access to information via digital platforms. They want their many financial institutions to interreact seamlessly and integrate, and they don’t want to be handcuffed to one provider for one-stop shopping.
Our industry is not going to transform by choice. It’s transforming because it has no other choice, and frankly, that’s a good thing.
Digitization of Finance
This generational shift and the need for better technology—call it the digitization of finance—represents a significant challenge for traditional banks. Often, we don’t have great apps to provide a seamless client experience, which is problematic because ease of use will be the defining characteristic for the next generation of financial giants.
But as we prepare for the future, we know that at the point we touch clients, we will need for data sharing application programming interfaces, or APIs, to enable data to flow seamlessly between systems. In financial services, APIs have the ability to spark a significant change in the way the industry operates across the retail, institutional and post-trade areas. But we’ll have to change our approach here, too.
At DTCC, we’ll be launching an external API Marketplace that’ll offer our clients a single, central location to access APIs into several of our products and services. We’ll begin with an initial set of APIs and, longer-term, we will offer a much broader and diverse set of APIs and capabilities to support our clients.
This represents a dramatic shift in how we operate, and it also reflects our commitment to staying ahead of the innovation curve. We know that supporting our clients’ needs in this new environment means we have to make our services available when you want them, how you want them, and in a way that best meets your individual needs. Speed and ease of access are no longer differentiators; they are requirements for doing business.
Understanding Data
Central to this is data and, more specifically, how we understand and use data in new ways.
Data intelligence is the way in which firms organize and interpret data under management. It’s clear today that data is an asset, which is a fundamental shift from the traditional mind-set of seeing data as a fuel for processing. More than once our clients have told us: We want all the data you can give us. We want it fast, and we want it our way, not yours.
These clients know that organizations are successful when they understand the data they have access to and can use it to understand their needs at a much deeper and more fundamental level.
At DTCC, we’re committed to using technology—including data science, applied machine learning and artificial intelligence—to help our clients better understand their data under management to deliver even greater efficiencies, cost savings and to lower their risk.
We know that data is the fuel that powers artificial intelligence and machine learning, and the equation is very straightforward: The richer the data, the smarter the technology in identifying trends and creating insights.
It’s important that, while we keep a close eye on the future, we remain grounded in today. Although I’ve been discussing some very new and exciting developments in our industry—and yes, some are a little scary—DTCC’s mission really has not changed. For more than 45 years, our firm has supported our clients’ evolving business needs and embraced new technologies that will improve the safety and efficiency of the financial marketplace.
Our clients depend on our ability to bring unbiased, thoughtful guidance to the industry. It’s an obligation we take very seriously. We will work together to build a fully integrated digital ecosystem that includes technology designed specifically for clients to conduct business their way.