The Group of Seven nations will hold a three-day exercise in June involving central banks, market authorities and finance ministries. The exercise will simulate a cross-border malware attack on the financial sector.
The first wave of testing for the consolidated audit trail will take place this year, and broker-dealers should prepare by familiarizing themselves with specifications that will govern their reporting, said Financial Industry Regulatory Authority CEO Robert Cook.
Cybersecurity preparedness is a priority both for the organization and the industry, said SIFMA President and CEO Kenneth E. Bentsen, Jr. In addition to a variety of other ongoing efforts, SIFMA is planning another industrywide test of financial firms' cybersecurity preparedness this fall in which participants will counteract a series of simulated adverse events including data destruction, fake news and bad data inserted into processors. Tom Price, SIFMA's managing director of operations, technology and business continuity, noted "we have to be right all the time -- the bad guys only have to be right once."
The market for algorithmic trading will be worth $11.1 billion this year and is projected to reach $18.8 billion by 2024, according to a report from MarketsandMarkets. The North America market is expected to account for the largest share.
IDC predicts that digital data troves are doubling in size every two years, and 180 trillion gigabytes of data will be generated worldwide in 2025. The rapid expansion of data has left many companies failing to tap into their current data troves, but machine learning can help.
Automation holds the promise of a seamless trading cycle from price discovery through trading workflows and risk management. Companies that rely on commodity prices are starting to rely more on automation to manage their risk amid tumultuous markets.
Experts Louis Rosato and Andrew Retrum say optimal cybersecurity comes from combining human ingenuity with artificial intelligence, rather than focusing on one over the other. Speaking at the SIFMA Operations Conference and Exhibition, Rosato said the challenge is not a job only for technologists but also requires collaboration between departments and between humans and technology.
UBS hopes to cut costs from its operations division by 22% during the next three years by retraining hundreds of back-office employees to use algorithms and automation software. UBS is also expanding use of machine learning to make foreign exchange trading more efficient.
The Commodity Futures Trading Commission has ruled that Intercontinental Exchange can launch a three-millisecond speed bump for gold and silver daily futures. ICE has not said when it will introduce the speed bump.
Best execution, trade failure prediction and advanced decision support are areas within finance that are ready to be transformed by artificial intelligence. "With AI, we can see problems with trades before they happen," said Thomas Durif of BNP Paribas Securities Services.
The Financial Industry Regulatory Authority has laid out its Digital Experience Transformation program, a multiple-stage project to improve how firms interact digitally with the regulator. The project will ultimately yield a centralized task-management platform with a simplified user experience and notifications to warn of potential compliance issues, FINRA said. FINRA chief information officer Steve Randich spoke about the initiative at the SIFMA Operations Conference & Exhibition earlier this month.
A $3 million increase in cybersecurity spending is the top budget priority of the Commodity Futures Trading Commission, Chairman J. Christopher Giancarlo told a US Senate subcommittee. "Cyber is the No. 1 risk to our markets and in some ways the No. 1 risk to our own agency operations because of the amount of data," he said.
European exchanges still have no consolidated tape to connect to, as required by the revised Markets in Financial Instruments Directive, because MiFID II lacks objectives and incentives for one, ION Markets senior regulatory adviser Christian Voigt says. "With that in mind, the benefit as a vendor of being a consolidated-tape provider is highly uncertain," Voigt says.
The financial system remains vulnerable to cyberthreats, and "it is a matter of time until we experience a major attack," European Central Bank Executive Board member Sabine Lautenschlaeger says. Banks should understand risk in using a single provider to outsource technology needs, Lautenschlaeger says.
Registration is now open for SIFMA's 2019 Annual Meeting. Each year, we gather the most influential voices shaping today’s capital markets. Through candid one-on-one conversations, expert panel discussions and in-depth breakout sessions, we assess challenges and gain insights into opportunities that lie ahead. Confirmed speakers include SEC Chairman Jay Clayton, Bank of America CEO Brian Moynihan, Edward Jones Managing Partner Penny Pennington and New York Fed President John Williams. Find out what is top of mind for market participants: register today to join us on November 18-19, 2019 at the JW Marriott in Washington, DC.
Watch livestream replays from select sessions at SIFMA's Operations Conference & Exhibition. Cathy Bessant at Bank of America, Bridget van Kralingen at IBM, Steve Randich at FINRA and Scott Penberthy at Google joined us to explore the dynamic and complex environment that is reshaping operations, the customer experience and market requirements.