Marianne Brown is chief operating officer for institutional and wholesale solutions at FIS.
What were the major themes in your business in 2015?
First off, 2015 was a watershed year for financial technology; with fintech news making headlines almost daily and, closer to home, with the creation of one of the largest financial technology firms through the acquisition of SunGard by FIS.
Last year also witnessed the nascent transformation of traditional business models in financial services. Driven by increasing regulatory capital requirements, financial institutions faced growing pressure on the economics of trading, clearing and the overall efficacy of their wholesale businesses. Yet, global growth, market volatility, and reporting requirements have made speed, data accuracy and risk reduction a technology imperative. We have seen these challenges even prompt institutions to rethink their more capital-intensive business lines and further distinguish between their retail and wholesale businesses. These shifts and initiatives will further intensify the demand and the urgency for innovative solutions.
Today, technology infrastructures within even the most established entities struggle to adapt to the changing landscape of IT and regulatory requirements, while meeting the demands of a global client base.
What are your expectations for 2016?
We expect to see institutions exploring three key technology strategies to help them meet the challenge. Industry-wide utility platforms, public-cloud technology infrastructures and the commercial build out of fintech innovation experiments this year.
Any successful utility will rely on the expansion and adoption of common IP platforms, development of data standardization, and open source interfaces. A governance process managed through bilateral collaboration will be the catalyst that leads the industry toward more sustainable operating models. We see 2016 as a growth year for the FIS Derivatives Utility by providing a common platform and best practices for post-trade processing in the derivatives sector.
We believe that 2016 will be the year that the public cloud finally breaks through the financial institutions barrier. Case in point, the SEC’s Consolidated Audit Trail will likely reside on the public cloud. As a finalist in the bid process, FIS led the way by proposing a cloud-based platform; the other two finalists have subsequently followed suit. Providers like Google, AWS and Microsoft’s Azure are helping financial firms leverage the public cloud without any loss of security. With the cloud they leave behind the capital expense of internally managed or private cloud infrastructures and move to an elastic operating environment.
As 2015 was a year of experimenting in new financial technology, in 2016 financial services firms will continue to evaluate and potentially look to commercialize some of the experiments from their innovations labs. New technologies like blockchain, biometrics, and truly real-time trading desks will enable these institutions to become more efficient and streamline their operations. In addition, the potential benefits behind Open Concept Banking are set to revolutionize the way banks deliver and optimize their customers’ expectations. Conceptualizing, building scale and servicing technology demand different skill sets, and vendors like FIS are critical to support these initiatives and realize their revenue potential.
Last year was a fantastic year for financial technology. And in 2016 the trifecta of utilities, the public cloud and commercializing of innovations will present financial institutions with a unique opportunity to adopt new and more sustainable operating models that support the demands of market volatility, competition and regulations.
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