Technology – all for the greater good?

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Martin Wheatley, CEO of the FCA recently spoke at the Lansons annual conference about the future of regulation.  This year he choose “The Technology Challenge” as the basis for his speech and very interesting it was too.  It raised a number of issues for groups and recognised that a significant number of senior managers in firms have realised that the pace and volume of change has raised the stakes for financial service leaders, creating very different visions for the future”.  Around the world, senior executives now see it as the 4th most serious ‘banana skin’ threatening the future of their firms. Two years ago, it barely registered at 18.”

If we were in any doubt of this we only have to consider high frequency traders (HTF) who capitalise on seeking out nanosecond advantages in pricing, peer to peer finance and the expansion of crypto-currencies which could change the face of banking forever. New innovations are being added to the list daily.

The question as posed by Mr Wheatley was “where are the technologies that are benefitting consumers and markets?” which is a sentiment echoed by many market commentators and interested parties

The question as posed by Mr Wheatley was “where are the technologies that are benefitting consumers and markets?” which is a sentiment echoed by many market commentators and interested parties.

Recently the high profile move of a well-known fund manager to set up on his own has raised a number of issues about the movement of monies in the market place by institutional fund managers.  Of course millions of retail customers choose to use fund management houses and individual fund managers to save them time and be able to tap into the expertise of professionals.  Pension funds and insurance companies also draw upon the expertise of these groups, so it could be a double whammy for us retail investors?   Placing unprecedented amounts of newly raised as well as the transferred monies into the markets, with the world watching could require extensive dark pool activity in some of the most recognisable FTSE stocks.

Is there not an opportunity here to use technological advances coupled with the application of TCF by completing a share swap between the two firms, especially as one will be forced to sell off shares as clients switch to the new fund?  They must be open to talks about a buy-side to buy-side share swap to the benefit of clients who rely on their creativity, professionalism and knowledge of the markets, pricing and liquidity that we simply do not have.

Surely common sense will be applied and that we, Financial Services, can be seen to use technology and client centric thinking to the benefit of our clients.  Otherwise, again we will all be tarred with the same brush and members of the public will assume that our technological developments as well as our behaviours have been developed purely for our own benefit.  Technology and its impact on our behaviour should develop in the genuine desire to do the right thing for clients, after all it’s their investments that keep us in a job.

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Through our award winning training and consultancy partnership FSTP LLP we hope to become a trusted provider of services to client firms across Financial Services. Specialties: Training and consultancy, project and interim management from regulatory issues through to management development and board services. Chartered Member of the Chartered Institute of Securities & Investment

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