Monthly report / Digitisation and Fintech trends set to further increase speed of innovation

16.11.2017

New technological developments in the fields of Artificial Intelligence (AI), Big Data, Robotics, Blockchain and the like, as well as the rise of Fintechs have increased the speed of change in the financial industry. This new wave of technology has the potential to support the market to overcome certain barriers to harmonisation, while delivering efficiency gains and supporting risk mitigation. And this development is set to continue over the next decade: trends in digitisation will accelerate, and the challenge for established providers will be to find the correct means of collaborating with new business models and innovative technologies.

“We at Deutsche Börse believe that the market should embrace new technology and try to understand its potential in addressing industry needs”, said Marc Robert-Nicoud, CEO of Clearstream Holding AG at a panel discussion on the digital transformation of the industry at the University of Luxembourg this week. “The better the quality of our technology, the more we can support the regulatory agenda and the better we can serve our clients and the real economy. Our goal is to shape a next-generation organisation that ensures a robust capital market infrastructure for the benefit of our clients.”

Market infrastructures, such as Central Securities Depositories, contribute significantly to the mitigation of risk and ensure the integrity of securities transactions. This role will remain crucial as innovation in financial technology progresses. But the impact of digitisation will not by any means solely be limited to post-trade. Market infrastructure providers such as Deutsche Börse Group, which Clearstream is part of, are well positioned to explore the potential of new technologies throughout the value chain from issuance, through trading, to clearing and settlement.

Deutsche Börse Group is taking a collaborative approach when engaging with new technology trends as part of its corporate strategy. The Group has, for example, developed a number of own blockchain prototypes, in cooperation with the German Central Bank and other Central Securities Depositories, demonstrating how this technology could be applied to solve business problems. Other activities include its newly established Content Lab to better harness data in providing services to customers and its Product Development Lab, which explores micro services development. Besides, Deutsche Börse Group is currently looking into providing connections to its systems through APIs to deliver new data and analytics solutions to customers, using cloud as an enabler for this shift.

Business overview

 

October
2017

October
2016

Change (%)1

YTD 2017

YTD 2016

Change (%)1

International business (ICSD)

Securities deposits (EUR tn)

6.7

6.7

0%

6.7

6.7

0%

Number of transactions (mn)

4.0

3.1

30%

36.7

29.2

26%

Domestic business (CSD)2

Securities deposits (EUR tn)

4.6

4.4

4%

4.5

4.4

3%

Number of transactions (mn)

8.0

5.9

36%

75.5

64.1

18%

Investment Funds Services (IFS)

Securities deposits (EUR tn)

2.3

2.0

16%

2.2

1.9

16%

Number of transactions (mn)

2.0

1.5

30%

18.6

15.1

24%

Total

Assets under Custody (EUR tn)

13.6

13.1

4%

13.4

13.0

3%

Global Securities Financing (GSF)

Volume outstanding (EUR bn)

441.1

491.0

-10%

462.1

521.1

-11%

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1 Due to rounding, growth rates cannot be calculated from figures in the chart.

2 On 6 February 2017, Clearstream Banking Frankfurt has transferred its settlement volume to the pan-European securities settlement platform TARGET2-Securities. Since 7 February 2017, German settlement volume is processed solely via T2S.