1. As we kick off the year 2020, please can you look further into the future, and share your predictions on what the market infrastructure industry might look and feel like by 2025?
Financial Markets Infrastructure is rapidly evolving and the needs of our customers are changing. There are a number of disrupters that are well known – regulatory, technological and structural factors impacting the industry. We believe that two of the most important drivers for change in the future include the increased value of data and analytics and the increased usage of multi-asset class trading and investment strategies. However, the role of technology cannot be ignored. We will continue to see the adoption of emerging technologies to modernise processes across financial services to drive operational efficiency and to reduce costs across the capital markets lifecycle.
Another area that can’t be ignored is the need to support market participants in navigating the transition to a low-carbon economy and to join up the investment chain on sustainable investment. The Global Commission on the Economy and Climate estimate that US$900 trillion of investment is needed by 2030 to achieve the Paris agreement. This, therefore, presents an opportunity for our industry to work to influence positive change from within and support positive outcomes for climate change. Investors are increasingly looking to incorporate ESG considerations into their investment processes, which will involve ongoing engagement with global regulators, asset owners, corporate issuers and banks, as well as government and regulatory stakeholders.
2. And how is your firm getting ready for the changes you’ve outlined above?
Over the past several years, LSEG has anticipated notable trends in financial markets, such as the shift to passive investment and regulatory-driven trends in post trade. Our proposed acquisition of Refinitiv, which is expected to complete in the second half of this year, subject to regulatory clearance, will be transformational and will enable us to expand our data and analytics offering and create a global multi-asset class capital markets business. Both companies bring highly complementary capabilities in data, analytics and capital markets, as well as deep customer relationships with a shared commitment to open access and partnership to deliver innovative solutions.
In sustainable finance, LSEG has many touch points with stakeholders that put us in a strong position to engage in this discussion and we take our responsibility seriously. LSEG is a pioneer in supporting growing global green and sustainable financing, providing a comprehensive green and sustainable product offering. For example, we recently launched two new initiatives supporting sustainable finance on our markets. The Green Economy Mark recognises companies and investment funds on all segments of London Stock Exchange that derive 50% or more of their total annual revenues from products and services that contribute to the global green economy. The Sustainable Bond Market builds upon the success of our Green Bond Segment, launched in 2015, and includes new dedicated segments for social and sustainability bonds. These new segments further enable investors to distinguish between different types of sustainable bonds, based on independently verified frameworks and use of proceeds.
3. Entering a new decade is not just about looking ahead; it’s also a good time for reflecting on the past. What’s the top lesson you’ve personally learned from the past ten years?
This is an industry that has been undergoing dramatic change for the last 20 years or so. Technological advancement, regulatory shifts and evolution in societal values – as well as a dynamic competitive landscape among financial market infrastructures to adapt — are some of the drivers of that dramatic change. And there will be more such transformation ahead. I believe that we have to try to anticipate how the environment in which we operate is shifting and not be afraid to disrupt our own business and the industry to be prepared for the future. I’m excited to be part of the next phase of the evolution of the industry.