A number of disruptive technologies have the potential to radically change how derivatives markets operate but internal procedures are holding back adoption at financial institutions, a recent whitepaper by FOW has found.
The whitepaper, which was produced following a private forum of 10 leading individuals from banks, brokerages and trading companies, covered big data, the distributed ledger and machine learning.
The forum discussed how big data has already made an impact on operations within derivatives markets but as usage grows, banks could have the potential to analyse their entire portfolios in real time and offer dynamic funding options to clients to balance the bank’s positions.
The whitepaper explores the development of machine learning and genetic programming, not just in the front office for trading strategies but in the back office to spot trade break patterns and increase efficiency.
It also examines the likely growth of blockchain technology in the form of distributed ledgers arguing that smaller permissioned ledgers will soon replace some internal processes within financial organisations.
While the potential for new technologies is huge, the whitepaper found that adoption rates of new technologies are being held back by internal processes within financial institutions.
These include outdated procurement processes and a lack of facilities to trial new technologies.
With installation and adoption times and costs slashed by software-as-a-service distribution, the economics of investment in new technology is changing and to take advantage, firms need to adapt.
To download the free whitepaper, visit: http://bit.ly/1iEYGQD