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“The only constant in life is change,” noted the Greek philosopher Heraclitus. Yet sometimes businesses need to prepare for change in ways we least expect.
In our previous article we wrote about how national economies are suffering due to inertia of change in financial market infrastructures. These limitations, upheld by legacy tech, should be considered as ‘weight of baggage’.
Yet recent history is littered with examples of groundbreaking innovations – sometimes in ways that were least expected – transpiring precisely because their creators were able to by-pass incumbent systems. Can national stock exchanges stand to benefit in a similar manner?
Lessons from payments
One well known example of a company leapfrogging traditional infrastructure systems is the Kenyan mobile money system, M-Pesa. Emergent mobile networks and fintech technology made it possible for M-Pesa to provide wider accessibility at lower costs, effectively kick-starting a banking revolution. Now, millions of unbanked people in sub-Saharan Africa are able to buy and sell goods and services using only their mobile phone, in contrast to the US payments systems which are primarily linked to bank and credit card infrastructures.
Similarly, the Chinese digital wallet service WePay buypasses traditional payment providers by allowing users to make mobile payments and send money through popular social media messaging app WeChat. The WePay payment service provider permits marketplaces and other intermediaries to offer payments as part of their offering.
In both these examples we can see that when legacy tech is avoided, true innovation is able to take place – often in areas and ways we could not have foreseen – as opposed to the original rationale of the technology developments and deployments.
Unlocking the future; break free from legacy constraints
Looking at the world of exchanges and markets, the same is of course true – exchanges basing products on modern underlying infrastructure can gain advantage simply by opening themselves up to innovation and change, often in unforeseen ways.
The modern approach to building exchanges demands unique skills absent from the legacy systems prevalent in today’s traditional markets. It not only offers cost-efficiency, but also necessitates a fresh mindset. Exberry’s enterprise-grade, cloud-agnostic, SaaS trading engine has been carefully constructed with modular design and scalability at the forefront to best serve diverse markets, asset classes and geographies.
Our methodology for building our advanced trading platform is based on the most up-to-date methodologies and practices to ensure that market infrastructure will always be ahead of the curve. This means exchanges can dramatically shorten time to market, as well as benefit from easy integration with third parties.
Reap the benefits
Although change remains a constant presence in our lives, the future remains inherently unpredictable. We can, however, be confident that the digitisation of markets is not going to go away.
What is also highly likely is that change will lead to unexpected innovation, and those financial exchanges not willing to truly embrace change will find themselves held back. Alternatively, early adopters of new technologies will reap the full benefits of these unforeseen innovations. Without legacy tech weighing them down, the possibilities are endless.
For more information
All Markets Rise: Maximising Exchange Profit by Modernising Across All Sectors
Imagine a scenario in which a large, successful financial exchange is making profits across all its markets alike, from equities, fixed income and derivatives, to commodities and FX. Yet, sadly, this vision is far from reality. Oftentimes smaller and less liquid markets, such as for fixed income and derivatives, find it difficult to obtain the modernisation of infrastructure they need, even when it is just a simple feature request.
Regulated Exchanges and AI: What’s Behind the Hype
The topic of AI has been the subject of a number of panels at recent industry events attended by Exberry. We thought it would be helpful to provide a snapshot of some of the leading thinking on AI, particularly how it is predicted to affect regulated exchanges.
Key Insights from WFEClear 2024 Conference
A few weeks ago, along with my colleagues, I attended the WFEClear 2024 Conference in Madrid, which focused on clearing and derivatives. Many relevant topics were discussed in the well-attended event and, specifically, I noted the panel on “Practicalities of DLT and Clearing” explored advancements in distributed ledger technology and its potential intersection with central clearing.
