Technological developments present new challenges to both financial services firms and their staff,
warned John Ashworth, CEO of Caplin Systems, at Forex Network London.
In a presentation “The Fourth Industrial Revolution: Society, Finance, Trading & Sales“,
Ashworth opened the discussion by questioning the assumption that the advance of technology is
unambiguously good for business.
“The notion that an entry level economist would invite you to believe is that technology is a good
thing, that technology delivers productivity, that productivity delivers advancement, that opens up
new markets, and so forth. The reality is somewhat different,” he said.
Ashworth then moved on to focus specifically on how the increasing automation of financial services
is likely to impact firms in this industry.
“I know in conference panels over the years, the dichotomy has been between the benefits or otherwise
of single-dealer platforms versus multi-dealer platforms, which I think is a little bit akin to saying
does Coca Cola make more money selling its Coke cans in the corner shop or in the BA lounge at Heathrow.
It’s slightly irrelevant because in the whole panoply of things different channels suit different
customers and there’s different profitability associated with those channels,” he said.
Ashworth continued: “The important thing is, as automation kicks in and banks need to respond to these
cost pressures and other effects that are going on, how much of the human sales function is being
displaced by things that are going on to the single-dealer platform?”
Discussing how single-dealer platforms have evolved over time Ashworth said that a lot more software
engineering work has been put into harnessing big data to determine questions about which customers
banks want to serve and which they don’t. He added that the Mifid II requirements regarding how banks
sell news and research are “a complete red herring” because firms will increasingly source their own
news and research via computer generated means.
He also noted that a huge amount of design and thought goes into making these platforms simple and
straightforward to use, that they have to be complaint in terms of showing pre-trade information
regarding price construction, and must be able to integrate with adjacent systems.
Finally, he noted that they must be able to support genuine innovation, where firms are putting new
products down these channels in order to generate new revenues.
You can access the full video here: