Future Focus: DTCC Executives Provide 2023 Outlook
By DTCC Connection
DTCC executives discuss which themes, opportunities and trends will be catalysts for advancing the global financial markets in the upcoming year.
Lynn Bishop, DTCC Managing Director and Chief Information Officer
“It’s a transformative time to be in financial services, as technology advances at a rapid pace and enhances how the industry operates. Legacy technology modernization will continue to be a top focus, with firms ramping up cloud adoption and strengthening data exchange capabilities to introduce efficiencies and reduce risk. Further investments in innovative solutions will also be key to delivering business value and elevating the client experience. At the same time, with ever-evolving risks in mind, firms must prioritize enhancing the security, stability, and resiliency of their solutions. As resilience is not a one-and-done approach, when adopting new technologies, resilience must be built into the platform or offering at its foundation, to continue to protect the marketplace.”
Susan Cosgrove, DTCC Managing Director and Chief Financial Officer
“We’re entering one of the most challenging economic cycles in decades, which follows a period of significant investment and growth for many financial services firms. The combination of high interest rates, persistent inflation and a potential recession will require companies to act now to align their 2023 plans to the business environment. All firms, even those whose operational and financial performance remain strong, must prepare for these market dynamics by prioritizing their most strategic initiatives and optimizing their cost base to support growth. They also will need to have a range of options to increase or decrease spending and to support alternative approaches depending on the state of the economy and how the year progresses. During times of uncertainty like this, a forward-thinking mindset is essential to navigating the short-term challenges and setting the organization up for long-term success.”
Tim Cuddihy, DTCC Managing Director and Group Chief Risk Officer
“Organizations must prioritize resilience and risk-reducing strategies in 2023. Cyber threats are evolving rapidly and at an accelerating pace. At the same time, the importance of operational and business resilience grows every day as we collectively look to improve processes and technology. As the industry advances its digital journey, firms must focus on technology as an enabler to meet present and future demands. Innovation must be purpose driven, deliver value and reduce risk. It is through this lens that DTCC sees its role as a critical, resilient and forward-looking infrastructure — providing efficiencies, mitigating risks for its stakeholders and reducing systemic risk for the ever-changing financial industry.”
Jennifer Peve, DTCC Managing Director, Head of Strategy & Business Development
“We anticipate the drive towards adoption of digital assets and DLT-based solutions will continue to prevail in the coming year as firms evaluate business cases where the technology can deliver new value. At the same time, the definition and intersections of traditional finance (TradFi), centralized finance (CeFi), and decentralized finance (DeFi) will remain important topics. As the industry develops in these areas, we must ensure the requisite infrastructure, underpinned by robust technology, delivers the same high levels of safety, resiliency and dependability across markets. For this reason, as the adoption of novel technologies accelerates, regulated financial market infrastructures (FMIs) will have an important intermediary role to play, ensuring robust risk management capabilities remain a key focus in our financial system.”
Murray Pozmanter, DTCC Managing Director, President of DTCC Clearing Agency Services and Head of Global Business Operations
“Clearing and settlement play a critical role in mitigating systemic risk in financial markets, and at DTCC, it is our utmost priority to preserve this level of risk mitigation for the industry. At the same time, market infrastructure must evolve to keep pace with market developments. DTCC has several projects underway to assess new ways to deliver increased efficiencies and reduced risk in the U.S. clearing & settlement infrastructure, including efforts around accelerated settlement and the expansion of fixed income clearing to additional market participants. We look forward to bringing greater efficiencies, cost savings and benefits to the industry.”
Keisha Bell, DTCC Managing Director, Head of Diverse Talent Management and Advancement
“In 2023, we anticipate that firms will increasingly align their D&I strategy to their emerging ESG frameworks. While D&I already fits into a company’s wider ESG framework, the alignment must be intentional to be truly effective, ensuring that an organization makes progress in this important area for their employees and stakeholders, as well as in the communities where staff live and work.”
Chris Childs, DTCC Managing Director, Head of Repository & Derivatives Services, Chief Executive Officer & President, DTCC Deriv/SERV LLC
“This year will mark a significant milestone as regulatory regimes across the globe continue to implement new trade reporting rules that drive greater harmonization across markets. With a wave of regulatory deadlines in 2023/24 — from EMIR Refit in the EU and UK, the JFSA Rewrite in Japan, and phase-two of the CFTC’s Rewrite in North America — firms must take advantage of the time remaining to ensure they understand the changes as well as identify and test the operational updates necessary to ensure preparedness. Ultimately, these revised rules will bring enhanced levels of transparency and risk mitigation to the global derivatives market, as originally envisioned by the G20.”
Marie Chinnici-Everitt, DTCC Managing Director and CMO
“The recent pandemic has led firms to further embrace digital tools to reach their clients and manage relationships with key stakeholders more efficiently, a trend that will continue to evolve in the coming year. With the growing uptake of these tools, we also expect to see an increased focus on leveraging internal data to measure the ROI of these programs. Data and, by extension, the ability to drive measurable outcomes for marketing campaigns, will continue to increase in priority for marketing teams, especially those operating on a global scale.”
Jason Harrell, Managing Director, Operational and Technology Risk and Head of External Engagement
“The threat landscape has shifted and the probability of an operational incident impacting multiple financial institutions continues to rise. Cyber risk remains a top risk to global financial institutions and their supply chains. To best prepare, financial institutions must enhance their focus on building resilient operations to withstand and recover from significant operational impacts, while taking a more holistic view to resilience. By focusing on this critical area, information systems can be developed to recover from operational incidents while maintaining a secure and efficient marketplace rapidly and safely.”
Michele Hillery, DTCC General Manager of Equity Clearing and DTC Settlement Service
“With US settlement cycles expected to shorten to one business day after the trade by 2024, the countdown to T+1 is on. In support of this sweeping industry change, DTCC is working in partnership with SIFMA and ICI, identifying next steps and industry challenges that will need to be addressed to ensure a successful implementation. It is crucial that market participants focus their T+1 efforts to ensure there is ample time for testing and integration.”
Laura Klimpel, DTCC General Manager of Fixed Income Clearing Corporation & Head of SIFMU Business Development
“Treasuries are the foundation of the capital markets, and FICC has long played a critical role to make this $24 trillion Treasury market more resilient, transparent, and safer for all participants. We will continue these efforts in the coming year, working closely with regulators and market participants to address industry challenges, deliver value and bring increased safety to the markets.”
Tim Lind, DTCC Managing Director, Data Services
“In 2023, we expect the demand for high-quality data to continue to rise, particularly if volatile market conditions persist. Firms across the financial services sector will be looking for data that will help them comply with increasing complex regulatory reporting requirements, allocate capital more efficiently and reduce risk. We also anticipate accelerated interest from buy-side firms who increasingly rely on back-office data to analyse market trends and inform front-office decisions.”
Matt Stauffer, DTCC Managing Director, Head of Institutional Trade Processing, DTCC President & Chief Executive Officer, DTCC ITP LLC
“Middle- and back- office operations have once again been catapulted to the top of firms’ agendas with the move to shorten the settlement cycle for equities to T+1 in the US and Canada. With implementation expected in 2024, this means that market participants will have this year to ensure their post trade processes meet the compressed settlement timelines. Advanced preparation is important for all, but particularly important for those firms who do not have the requisite levels of automation in place to achieve shorter settlement times.”
