James Rundle: Off the Record
In journalism, there are four general types of conversations: on the record, where everything can be reported and the speaker identified; on background, in which the contents can be generally mentioned or paraphrased without directly citing the source; not for attribution, where the quotes can be directly covered but the speaker remains anonymous; and finally, off the record, where nothing from the conversation can be published at all.
In the past, the financial services industry has operated with a strict adherence to off-the-record conversations. Basic operational information was guarded jealously with an ever-present threat of legal action. People didn’t talk about issues, because it was simply not the done thing. The only conversation, in that case, would be an abrupt one with human resources while they waved a pink slip in your face.
The post-crisis world introduced new risks and challenges as well as a new era of more open communication. Working groups are now the norm, drawn from a cross-section of the industry, rather than the die-hard enthusiasts or those who were forced into them. The FIX Trading Community deserves praise for its extensive role in fostering an environment of collaboration, as do the various conference organizers.
In areas such as cybersecurity, an information-sharing apparatus between industry, government, and law enforcement is being created to great effect, if recent cyber-attack simulations such as the UK’s Waking Shark II and the US’ Quantum Dawn II are any indication.
Pooled Talent
As institutions find themselves engaged in a balancing act between the cost of innovation and the cost of compliance—two current pillars of spending—there are further opportunities to develop formalized structures of cooperation between institutions. Some of these can be seen already in areas such as surveillance, with the development of Nasdaq OMX’s foreign-exchange (FX) monitoring release earlier this year, created through multiple banks providing their input over market-abuse scenarios that they have encountered. The upcoming release of MillenniumIT’s algorithmic surveillance library is based on the observations and experiences of its client base, at least for those surveillance routines that don’t have copyrighted or patented elements. The expanding use of open-source technology, too, provides the possibility of pooling common areas of technological development, while retaining individualized layers that allow a firm to build out its competitive differentiation, particularly in areas such as big data.
Lessons from the newsroom about conversation quality and openness are applicable to the industry at large.
Even on the buy side, initiatives such as the Investment Book of Record Working Group aim to produce commonality in areas of development that are standard for all firms looking at the technology. This isn’t to suggest that a utopian future exists where banks, brokers, exchanges and investment managers hold hands and use the same software, or discuss every issue that they come across in the public sphere. But in a world where new forms of risk are encountered nearly every day, and the old ways of business struggle to adapt to the new climate of technology development and social interaction, communication is more important than ever.
More Collaboration
More could be done to foster an efficient and collaborative landscape. Discussions between industry participants and regulators are often predicated on confrontation rather than communication, with the latter struggling to understand the ways in which the business models of the former have changed. The result is poor, clunky regulation that introduces loopholes and often fails to address the core issues, which leads to even more combative scenarios, and a sense of isolation rather than community.
Reporters are taught that an on-the-record quote is king, and that you can’t base a story on anonymous sources. Lessons from the newsroom about conversation quality and openness are applicable to the industry at large, when it comes to tackling challenges that all firms face.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs
Joseph Lo, head of enterprise platforms at Broadridge, joins the podcast to discuss AI tools.
Man Group CTO eyes ‘significant impact’ for genAI across the fund
Man Group’s Gary Collier discussed the potential merits of and use cases for generative AI across the business at an event in London hosted by Bloomberg.
BNY Mellon deploys Nvidia DGX SuperPOD, identifies hundreds of AI use cases
BNY Mellon says it is the first bank to deploy Nvidia’s AI datacenter infrastructure, as it joins an increasing number of Wall Street firms that are embracing AI technologies.
This Week: Linedata acquires DreamQuark, Tradeweb, Rimes, Genesis, and more
A summary of some of the latest financial technology news.
Systematic tools gain favor in fixed income
Automation is enabling systematic strategies in fixed income that were previously reserved for equities trading. The tech gap between the two may be closing, but differences remain.
Euronext microwave link aims to cut HFT advantage in Europe
Exchange plans to level playing field between prop firms and banks in cash equities with cutting edge tech.
Why recent failures are a catalyst for DLT’s success
Deutsche Bank’s Mathew Kathayanat and Jie Yi Lee argue that DLT's high-profile failures don't mean the technology is dead. Now that the hype has died down, the path is cleared for more measured decisions about DLT’s applications.
‘Very careful thought’: T+1 will introduce costs, complexities for ETF traders
When the US moves to T+1 at the end of May 2024, firms trading ETFs will need to automate their workflows as much as possible to avoid "settlement misalignment" and additional costs.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Sell-Side Technology Awards 2024: All the winners