Q: What is the membership structure of WSBA and who may join?
A: Membership is limited to those individuals or corporations currently operating in the areas of financial services or financial technology. Individual membership entitles the person to many of the premium benefits of the WSBA, including member-only webinars and educational seminars, research, in-person events and working committee participation.
Corporations and other firms seeking membership must be directly involved in financial markets or technology, and depending upon the membership tier are entitled to a wide-ranging series of benefits for their employees, including educational sessions, regulatory and industry specific advocacy, event sponsorship and more.
The WSBA board is also reviewing membership for other participants in the industry, such as vendors.
Q: How is WSBA organized in order to focus on the various areas that it is involved with? And what is it actually going to do?
A: In addition to the WSBA board, and its ongoing outreach to industry participants, there are several working committees that are key to the success of the WSBA. These committees include: Blockchain and Financial Markets, Tax and Accounting, Technology and Product as well as Research and Innovation. We are also in the process of launching our Regulatory Committee and Economic Empowerment Committee.
These committees are all headed by subject matter experts in their relative fields, and their bios can be found at our website: www.wsba.co.
Q: With regard to WSBA's blockchain focus, how does this compare to collaborative efforts like R3’s Distributed Ledger Group?
A: The Board of the WSBA was very clear at formation that our goal was to exist as a non-profit industry advocacy group. While we applaud the effort of collaborative groups like R3, the WSBA does not create, recommend or develop any specific platforms. Rather we advocate for any distributed ledger solutions, public or private, that have the potential to reinvigorate, reinvent and ultimately expand the beneficial impact of blockchain across all marketplaces. Our goal and mission is to be the voice of blockchain in financial markets and beyond, by bringing together all industry stakeholders.
Q: What is the Wall Street POV on matters such as scalability, security and performance of blockchains? Or is it a non-issue given that most developments will pass over Bitcoin’s blockchain in favor of private approaches?
A: The issues of scalability, security and performance figure prominently in many member discussions within the WSBA and across many market participants, particularly within our working committees.
These are not “non-issues” per se, given that our members are not only continuing to mount what we call the “blockchain education curve” with their teams, but also because as an industry we are working to see how the public versus private blockchain dynamic sorts itself over time. In an approaching era of sidechains and other interoperability challenges, understanding how scalability, security and performance issues are resolved will help to define strategic roadmaps for many years to come.
Q: To date, much of the focus of blockchain in the financial markets has been on making the post-trade processes less expensive, faster, etc. Is that what you are sensing from your members, and how do you expect initiatives in this space to play out?
A: Currently, much of the focus across industry participants has been in the area of post trade processing, leveraging blockchain capabilities. While post trade processes are the current focus, member discussions have evolved into several other aspects of financial markets. I suspect that over the course of the coming weeks and months, we will see several initiatives play out, including post trade, issuance, data management and more.
Q: TABB Group recently suggested that actually addressing the post trade world, at least for equities, would be difficult because of current market structure and processes, some of which depend on a T+3 settlement cycle. Is it your feeling that blockchain will have more of a challenge in terms of it being a business fit, versus a good technical solution?
A: My feeling is that blockchain is a good technical solution, looking to evolve into broader business and strategic fit. The settlement cycle conversation is telling in this regard. From a technology perspective, there is little reason that existing systems could not settle equity trades for example in something less than T+3. However current market structure and participants are at this point ill prepared for such a significant change. That said, as adoption grows, the market structure challenges to things like shortened settlement cycles will decrease over time. We can certainly envision a T-zero world for example, when industry stakeholders are better suited to operate in such an environment.
Q: Post trade applications aside, where are you seeing blockchain being investigated for other financial markets applications?
A: Beyond post trade, we are currently witnessing blockchain being investigated for a series of use cases across financial markets, including asset issuance and trading, regulatory compliance reporting, and more.
Q: Some vendor action is beginning to take place in the financial markets – among the likes of Broadridge, DTCC - as well as the big management consultants and IT heavyweights like IBM. What’s missing from the vendor ecosphere? Or rather, who is missing?
A: I would argue that based upon my discussions with industry participants and vendors, most of the major industry players are deeply involved and invested in the progression of blockchain technologies across financial markets. What is missing currently is wider participation and adoption by the major vendors, as I suspect they wait to position themselves properly and see how the industry evolves.
Q: Sticking your neck out, what activities, achievements, milestones do you expect to see regarding blockchains and the financial markets - this year? Over the next two years? Over the next five years?
A: Over the course of 2016, I am confident that we will see production-ready blockchain-based capabilities targeting some very specific industry areas such as syndicated loans.
Over the coming years, as both knowledge of blockchain and workable use cases grow, we will begin to see blockchains seep into what I call the “fabric" of financial markets, including multiple existing and new asset classes and the entire trade cycle of financial markets, including issuance, pre-trade, trade and post trade functions.