Kicking off the “The future of Asset Servicing Leadership Series” on 24 June, Commissioner Ephyro Amatong from the Securities and Exchange Commission (SEC) Philippines shared an anecdote from a webinar he had recently attended. The CFO of one of the Philippines’ largest property developers was asked was the biggest driver of digital transformation within his organisation the CEO, the CFO, or the CTO? None of them, he replied; rather, it was Covid-19.
It is the same for securities post-trade, although digital transformation is nothing new to the industry. Eastspring Investments embarked on a major digital upgrade in the years before the onset of Covid-19 – something Jeroen Buwalda, the asset manager’s COO, credits for their seamless transition to working from home. Similarly, technological improvements at Invesco have bolstered their response to the crisis, said its Regional Head of Operations, Dean Chisholm.
“Two years ago, I said that we were at the cusp of a paradigm shift,” said Anand Rengarajan Head of Securities Services, Asia Pacific, Deutsche Bank. “As an industry, we have all worked on various digital initiatives that have been necessary from an efficiency and regulatory perspective – and that journey has helped us overcome the current situation successfully. But we are not at the end of this paradigm shift, and some aspects of the industry’s digital transformation still need to be accelerated.”
Rengarajan added that, while the bank had a clear Business Continuity Plan (BCP), a global pandemic was outside the realms of what they – and others – had considered a worst-case scenario. Yet the success of the response and the move to home-working has led many to consider whether their BCP back-up sites are actually needed, he said.
Rohan Singh, Managing Director, Head of Asset Servicing, Asia Pacific, BNY Mellon, commented that homeworking was made more challenging by the fact that it coincided with “an avalanche of volumes”. “We had more than US$3trn in payments in the last two weeks of March, market volatility spikes were hitting 1.3-1.4 standard deviations and FX trade volumes were 50,000 a day, more than double the 2019 average,” he said.