The Network Forum (TNF) kicked off the year in Sydney with its inaugural Australasia Meeting on March 6. During the one-day event, industry leaders tackled a range of topical issues, including the impact of T+1 settlement, the rapid emergence of digital assets, and the growing influence of Generation Z on today’s workplace.
MYRIAD Group Technologies Ltd’s (MGTL) CEO Fraser Wikner reflects on some of the main discussion points to come out of TNF Australasia.
T+1 is felt down under
Of all the markets to be affected by the US transition to a T+1 settlement cycle, Australia is likely to be the hardest hit, due to the time-zone differences between itself and North America.
FX management, securities lending and borrowing, asset servicing, and corporate actions are just some of the activities facing potential disruption following North America’s adoption of T+1. Additionally, many people I spoke to at TNF are bracing themselves for a big spike in the number of trade fails, caused by the reduction in post trade processing times once T+1 goes live.
While some Australasian-based financial firms are looking to mitigate this problem by introducing night shifts or dispatching their post-trade teams to North America, I believe automation is the most sensible option for people to take.
However, as always, delivering on automation is easier said than done.
In order to achieve automation, firms will need access to organised, centralised data, which unfortunately is something many of them lack. A failure to structure and systematise data properly risks disadvantaging institutions as more markets (including possibly Australia) take the plunge and move to T+1.
Digital assets – a Network Manager revolution or much the same?
Digital assets, such as crypto-currencies and tokenised securities, are continuing to gain momentum.
In fact, TNF Australasia took place just days before the price of Bitcoin surged to new record highs. At a time when returns have been difficult to generate, institutional investors are looking for new revenue sources, and many believe digital assets could be the answer.
While fin-techs have been offering digital asset trading and custody solutions for a long time now, we are starting to see more traditional providers (i.e. Global Custodians, Financial Market Infrastructures) move into the market.
So, what does this mean for Network Managers?
Irrespective of whether a Network Manager is carrying out a due diligence on a fin-tech or an incumbent offering digital asset custody, I do not think much will change in their day-to-day operations.
Although we may see due diligences being adapted for digital asset providers (i.e. greater scrutiny of private key management, more emphasis on cyber-security etc.), the principles underpinning vendor governance will stay the same.
Keeping relevant in an era of change
The ability to attract younger people into our industry is something we need to work harder at, and this has been a recurrent theme at TNFs over the last 12 months.
According to EY, Generation Z, namely people born between 1997 and 2012, are expected to make up 27% of the labour market by 2025, yet this cohort does not seem particularly enthralled about the idea of working in financial services.
Ask yourselves this question: do your children want to work in a Bank?
This is something we need to work on….and quickly.
Given that Generation Z is digitally native, a good starting point would be for our industry to eschew manual processes and embrace innovative technologies.
We have made a concerted effort to bring younger people – primarily Generation Z – into client-facing roles within our own organisation, giving them visibility, responsibility, and autonomy. Not only did we increase headcount by 50% in 2023, but one third of our workforce is now under the age of 30, and this young talent is having a hugely positive impact on our business.
As ever, TNF Australasia was a thoroughly enjoyable event, and we anticipate future iterations down under in the years to come. For the rest of 2024, we look forward to seeing you all again at the other TNFs taking place in London, Warsaw, New York, Qatar and Singapore, together with Sibos in Beijing.
