“Securities lending, total return swaps (TRS) and repo is still in the Dark Ages,” said panellist Shane Martin, head of sales for securities financing at Wematch.live, when commenting on manual processes in trading at the 2022 Securities Finance Technology Symposium.
Martin made the comments in a panel that covered liquidity and strategies in post-trade obligations associated with securities lending, financing and TRS activities, moderated by Roy Zimmerhansl, practice lead at Pierpoint Financial Consulting.
When highlighting the industry changes needed to move securities lending processes away from datasheets and manual practices toward more automation, Zimmerhansl put forward the notion that “people are more afraid of getting it wrong than celebrating getting it right”.
He asked the panellists for their views on what they saw as “the key to instigating the paradigm shift that is needed to move away from spreadsheets and telephone trading”.
Travis Keltner, head of financing and analytics, managing director, funding and collateral solutions at State Street, said: “You have to get the balance right — you need to assume some level of risk in order to innovate while managing your shareholder and client demands.
“In today’s environment we are all generally resource constrained, but there are many ways to optimise time and resources to progress initiatives. It is a mindset, more than anything, to be open to innovating while buffering for calibrated failure.”
Martin said: “We have to move this business forward. We have to get away from that mindset of: “I am scared of changing something because I am going to get in trouble”. You cannot have that mindset in this day and age.”
He added: “If you do not have effectiveness and efficiency within your balance sheets and get your post-trade capabilities in line, you are not going to run a successful business. There needs to be an impetus to make that change. It is about the dynamic ability to take away some of the functionality that was taking a huge amount of time and pressure before, away from the trader, to allow that trader to do more effective things in pricing new trades.”