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The technological challenges that need to be overcome by financial markets

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The financial sector is the biggest investor in technology. But to be able to continue doing so and increase that competitive advantage it must be up to date. The event on computing technologies in the financial sector held at the BBVA Innovation Center in Madrid addressed the different technological paths that the financial ecosystem needs to follow to make the most of innovation.

In the financial markets, technology is a differentiating factor that offers a competitive edge. This is why it is important to know about the new technologies available and their use.

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These are the technologies the financial ecosystem needs to focus on according to the specialists who took part in the event on computing technologies in the financial sector held at the BBVA Innovation Center in Madrid:

Blockchain

This is the technology behind bitcoin, which has potential uses in the financial markets, since it provides a differential value with respect to other existing technologies. Challenges that need to be overcome by blockchain for the financial players to appreciate its benefits:

– Global acceptance of this technology.

– For its standards to be mature.

– To specify what players will play a relevant role in its implementation.

The financial sector will change a great deal with the implementation of blockchain, because it will bring about changes in market regulation, cost reduction and standardized processes across the value chain.

Extreme Low Latency

This is a technology that enables efficient provision of stock market data to the financial trading servers in a matter of milliseconds.

Challenges this technology has to overcome:

– How to measure my system’s power: to be able to measure latency, all the clocks (NTP and PTP) on the systems on which I develop my tool have to be in sync.

– Low- latency communication bus: this plays a central role that involves a further step in networks, as low latency can leave me outside the market.

– How I program my system so it works with low latency: the work of programmers expert in latency is required, something that is difficult today because they are scarce.

Messaging standards

Message transmission is essential in the financial sector. Messaging standards need to be unified because this reduces the number of systems and repositories, the cost of integration and maintenance, and time to market. Moreover, it makes it easier to exploit the information and build different metrics.

Time to market

The financial ecosystem is highly dynamic, since the needs of its customers can change overnight. The challenge that needs to be overcome by banks is that financial markets are very different from traditional banking.

The processes have to be made more flexible to be able to win opportunities, instead of losing them.

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