ICMA’s drive to support industry innovation through FinTech and Digitalisation

by Georgina Jarratt

Summary

The transformation of the debt capital markets industry is moving along differing axes and at differing speeds around the world. The vision and strategy for the future continues to evolve in a complex “dance” between technological innovation, regulatory evolution, adaption of the legal frameworks under which we operate, and the various agendas of the different countries, regions and institutions involved in the global network.

ICMA is taking a leading position on monitoring and demystifying this agenda, effectively connecting and sharing experience and best practice amongst our membership and the regulators.

Background

ICMA’s mission is to promote resilient and well-functioning international debt capital markets. The industry transformation agenda, which is underpinned by evolution in FinTech and Digitalisation, is vast and complex. It cuts

Figure 1: Industry wide transformation drivers

Global vs Regional vs Country dynamics

(laws, regulation, politics & competition between different geographies driving the overall global agenda)

Innovation

(evolution of new technologies & concepts (such as DLT, digital assets and digital cash), and, in time, the impact of quantum computing and the metaverse which will drive us to further reconsider how things are done across all segments of the market: primary, secondary, repo and collateral, and also across the end-to-end trade lifecycle (see Figure 1 below). All elements of market electronification, automation and standardisation need to be considered, and the Association has an important role to play in supporting and driving this complex agenda.

Changing Market Dynamics

(addressing topics such as improved liquidity, streamlining the settlement cycle to T+1 & enhancing transparency)

Improvement of inefficient legacy processes (changing historical ways of doing business – such as in the primary markets – which are slow, expensive & inefficient)

Harnessing data to improve management information and decision making

(leveraging AI, creating and managing data lakes, providing and sharing enhanced MI driving more efficient business decisions)

Impacted market segment(s) (primary, secondary, repo & collateral), parts of the trade lifecycle