It’s December, which means the start of my personal awards season – of course what it really means is I can do the modern day equivalent of “fnshd 4 yr frds” (look it up teenagers) and cruise through December without having to give too much thought to original opinion!
Yes folks, it’s the 2018 version of The Irrationals – my favourite themes and stories for the year, presented with tongue very much in cheek, although occasionally lapsing into seriousness.
I thought we could kick off with the “Disaster Averted Irrational”, a new accolade and, most probably, the only time it will be awarded.
Many of you would have been working around the turn of the century (some of you probably may not even have been born!) and therefore would remember the trauma of the Millennium Bug. When the computer clocks ticked over to midnight on a new century everyone was afraid they would stop working, vital infrastructure would collapse and chaos would ensue.
Of course the reality was the world’s computer clocks merely ticked over to 1/1/2000 and few really noticed the difference – actually let me correct that, nobody noticed the difference.
All of which brings me to this time last year and our winner of the first Irrational of 2018 – MiFID II.
This time last year the industry was awash with speculation – would financial markets fall apart and cease to function? Could firms meet the requirements in time to be able to continue providing liquidity? Would hundreds of strategists and economists suddenly be thrown onto the street? Would compliance departments have a melt down because they couldn’t cope with the sheer weight of work? Would there be hundreds of outstanding queries over execution quality? Were TCA reports up to the task?
The answer to all of that was, apart from the last question, no! Barely anyone noticed a difference. I remember going around the banks in February in London as part of our Digital Awards assessment process (next year’s awards being lined up now) and asking about it to be met with blank looks – “MiFID II? Oh yeah, I remember that!”
Of course, it should not be forgotten that not unlike the Millennium Bug quite a few people put in a lot of work to actually ensure a smooth transition by making the necessary adjustments where required, and we salute them, but the reality is not a lot has changed and very few of us were really impacted.
Actually one thing probably has changed – firms’ compliance departments have doubled in size again. I also think it has left a few firms playing catch up in terms of their technology investment because they did allocate so many resources to the new European regulation, which meant other client facing projects were put on the back burner.
Overall though, most banks in particular managed to find the resources to comply and build new products and services or enhance existing ones, which means that when we look back on the start of 2018 with the perspective of history, we will probably say, “MiFID II – damp squib but a good employer!”