Trading flows are increasingly digitized. According to research firm Greenwich Associates, 13% of European equities were traded electronically in 2007. 10 years later Greenwich estimates that the volume of electronically traded equities in Europe stands at 37%.
Against this background, industry participants are adopting different approaches to innovation.
A key challenge is to embed technology in how business is conducted every day. The digitization of markets has brought a clear requirement to align business and IT and foster a truly hybrid environment. Citi’s Markets and Securities Services business employs more than 10,000 people in technology. People in trading and product management regard technology as a critical aspect of what they do and it has become very hard to distinguish technologists from the business.
Data science- the ability to extract actionable insights from information- has become an essential component of the banking value proposition. Customers want fast and digestible information tailored to their needs.
Cloud is another big area of focus. Some see it is as a way to reduce infrastructure cost. What we look at is what Cloud can enable to put the information into clients‘ hands in minutes or seconds. One example of the way Citi leverages these new technologies is „Velocity Clarity“ a cloud-based, big data infrastructure that enables clients to monitor their investments including portfolio analysis, valuation, holdings, net asset value, counterparty risk, country exposures and trading flows. The platform is paradigm shift in the way clients are able to consume data and analytics.
When adopting new technologies, we also offer these capabilities as Application Programming Interfaces (API’s), so that clients can incorporate them into their own platforms and benefit from our technology investments as well as the scale of our infrastructure.
Keeping the dynamic pace
In today’s dynamic environment, the ability to deliver technology change at a fast pace has become a key differentiator. We make 25,000 upgrades to technology systems for our Markets business every year. Citi’s research, analytics and trading platform, Velocity, was created in 2012 to expose technology to clients in a simple, efficient and centralized way. The platform initially provided access to currency markets and now includes offering across the full range of Markets products. Today over 82,000 clients use Velocity in 130 countries. We deliver on average two product releases, new services, features or enhancements every day.
A critical part of the innovation strategy is to continuously invest in external market infrastructure and start-ups. At Citi, we see Fintech as an opportunity: even with the vast number of technologists we have, we would not be able to truly deliver the best financial services platform without partnerships. Recent investments announced by Citi in the Markets and Securities Services technology space include cloud-based communications platform Symphony, artificial intelligence platform Kensho, contextual content recommendation solution Selerity, distributed ledger technology providers Digital Assets Holdings and Axoni and FX post-trade processing network Colbat.
Implementing a successful digital strategy requires foresight, partnerships and disciplined execution. Ultimately, those players that invest in technology while implementing the necessary organizational and operational changes through active engagement with clients, employees and external partners will be the leaders that drive successful change in the industry.