2010 is shaping up to be an active year for those of us involved in the intersection of financial services and technology. The global economic crisis has cut spending to all-time lows in 2008 and 2009, particularly in financial services, and yet technical innovation and emerging technologies continue at a brisk pace.
The following are a list of “tweets” published on Twitter on Tuesday, December 15th. These “10” topics for “2010” hint at some of the hottest opportunities we see coming in 2010. We’ve aggregated them here with additional commentary and would love to hear your comments and feedback. The original twitter stream can be seen by searching for #ten10
Trend #1 - New regulatory transparency requirements have intended and unintended consequences on technology and operations
Global regulatory reform on a level unseen for generations is upon us. Technology and operations will bear the brunt of change as the requirements of intended and unintended consequences of regulatory reform emerge and then must be implemented.
Trend #2 - Automation of collateral management processes yields greater operational efficiency
Collateral management is a very diverse topic and one of the hottest in 2010, particularly as a response to the crisis and structural modifications to the OTC derivatives market. Industry groups, particularly ISDA have made great progress in 2009, building industry consensus for best practices like portfolio reconciliation, dispute resolution and electronic messaging. Collateral however, is a topic that spans U.S and international markets, in listed derivatives, OTC derivatives, repo and securities lending, and all will be impacted by collateral management initiatives in 2010.
Trend #3 - LinkedData networks make more compelling cloud computing and SaaS applications
Following some of the more recent presentations and Twitter presence of Tim Berners-Lee (father of the World Wide Web in 1989 & the Semantic Web in 1999), it is clear that linked data sets spanning public, private, organizational and personal boundaries are fast becoming an area of active research and collaboration. Combined with the infrastructural freedom of cloud computing & SaaS delivery, the coalescing of these three topics may give the Semantic Web a big boost in 2010.
Trend #4 – Hedge fund transparency requirements and use of managed accounts alter the alternatives landscape
Managed accounts have traditionally been confined to the wealth management domain and traditional money managers. With the big regulatory push to increase hedge fund transparency along with the more well-known factors like a big baby boomer wealth distribution shift (from accumulation to distribution) and pension fund shortfalls, we have already seen a move by alternative asset managers into the managed account space. As this trend continues and more and more hedge fund managers move into managed accounts, they will face operations and technology implications that should not be underestimated.
Trend #5 – Buy-side derivatives workflow gets efficiency overhaul via new SunGard network
SunGard’s brokerage & clearance business has a cool new SaaS offering called Cliq that uses a business process network to link the buy-side with the sell-side for listed derivatives post-trade processing, improving a process that to date has been very labor intensive. Look for this to get traction in the first half of 2010.
Trend #6 - Mobile applications and social network, LinkedData become must-haves for B2B and B2C applications
Social networks are here to stay, breaking down barriers to communication and adding human context to the fire hose of data we all consume each day. Combined with a continuous proliferation of mobile access and mobile applications across a wide range of global demographics and the power to connect with people anywhere in the world on any focused topic of interest, in real-time, will have a profound impact on B2C and B2B forever. A big push in 2010 will be to integrate and retrofit social networks into applications that serve the vast B2C and B2B communities.
Trend #7 - Revolutionary efficiency of MapReduce and NoSQL for `really` RealTime financial calculations
Google, Twitter, Facebook, Yahoo – just a handful of the firms solving data intensive problems on a scale unseen in relational databases and doing so with technology that harnesses the power of unconstrained capacity in the cloud, but with a simple programming model called MapReduce and a simple set of database technologies loosely organized as “NoSQL”. Look for this approach to become more widely accepted and transformational in financial services and energy in 2010, particularly to solve problems that have not been tackled because they’re “too big” for traditional approaches.
Trend #8 - Tactical 2009 OTC derivatives technology and operations support for clearing gets strategic overhaul
December 15, 2009 was a critical milestone in the evolution of OTC derivatives with clearing “going live” with buy-side participants, but this was just one step in a long journey that in 2010 will include additional products beyond CDS and IRS as well as likely legislation passed in all key market jurisdictions. The great work done in 2009 to meet the December 15, 2009 milestone will evolve into strategic, scalable consolidation and overhaul of OTC derivatives operations & technology, with an eye toward convergence with other established market infrastructure like that in listed derivatives.
Trend #9 – Semantic Web technology emerges as enabler of data integration with social networks
The Tim Berners-Lee vision of the Semantic Web circa 1999 challenged us all to think about a future of connected machines with vast stores of data, all enriched with meaning and relationships not captured today. Social networks and the need to capture and represent social connections from these networks to data of all varieties should see great inroads in 2010 as the power of the Semantic Web to solve specific problems takes shape and gives us all insight into practical applications of Semantic technology.
Trend #10 – Collateral, transparency and efficiency emerge as key sell-side and buy-side themes
As noted above, collateral is a key topic of 2010 that touches a number of key markets and financial products. Transparency and efficiency of collateral management both within and across the traditional silos in which they are managed, is emerging as a key topic for nearly all market participants, including derivatives dealers, banks, prime brokers, custodians, tri-party agents, asset managers and hedge fund managers.
What do you think is coming in 2010? As you celebrate a safe and happy holiday season, please let us know and join in the conversation.