Regulation, tech and emerging markets having most impact says survey

Various regulations, technological developments and the potential of emerging markets are driving current industry thinking according to Deutsche Bank research.
By Paul Walsh
Financial regulation, new technologies and the revival of emerging markets are key issues impacting industry thinking, according to research from Deutsche Bank.

Regulations including Basel III and Solvency II were considered the most beneficial by 62% and 48% of participants respectively with European Market Infrastructure Regulation (EMIR) and Foreign Account Tax Compliance Act (FACTA) viewed as the most burdensome.

The survey, conducted in partnership with FT Remark, polled 200 financial industry participants.

The research revealed that rather than a potential threat, participants are viewing regulation as an opportunity to improve settlement, liquidity and collateral management.

Findings concerning technology developments revealed 87% of market participants believe blockchain technology will completely change the settlement process for securities.

It found two-thirds of respondents expect the introduction of blockchain to produce substantial savings, possibly up to 25%.

Three-quarters of respondents agreed the technology, although in its early stages of deployment, will be widely used within the next three to six years with 48% of those surveyed arguing blockchain technology could also help the financial industry cope with the risk of system failures and market disruption.

A majority of market participants are also convinced of the revival of emerging markets with 54% believing they will deliver growth rates previously seen during the 2001-11 peak.

The India/South Asia region was regarded as the most attractive region although 76% of respondents suggested a lack of capital markets infrastructure is deterring them from operating or investing in emerging markets.

“These three themes are fundamentally redefining the securities services landscape and the knock-on effects will impact the business models of many capital markets participants,” said Satvinder Singh, head of global securities services and head of GTB EMEA ex Germany at Deutsche Bank.