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HSBC’s Sibos Spotlight: The Future of Custody – Discovering the MarketSpace ecosystem
26 Plays3 years ago
In the first episode of our podcast mini-series, TMI's Eleanor Hill is joined by Alexis Vasquez Meissner, Suman Bhadresha and Stephen Man to discuss the latest trends in the custody arena. They discuss HSBC’s overarching vision for the future of custody, and how our markets & securities services platform, MarketSpace, will connect the industry for clients through one single access ecosystem.
This is HSBC’s Sibos Spotlight, a podcast mini-series in collaboration with Treasury Management International (TMI). Throughout this series we will explore the critical topics impacting the transaction banking landscape, specifically looking at sustainability, digitisation and innovation. We will examine the opportunities and challenges disrupting the areas of payments, trade, custody and traditional business models.
To find out more about HSBC's transaction banking insights and presence at Sibos 2022, visit here.
Hosted on Acast. See acast.com/privacy for more information.
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Transcript
Introduction to the Podcast Series
00:00:02
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:13
Speaker
Make sure you're subscribed to stay up to date with new episodes.
00:00:16
Speaker
Thanks for listening.
00:00:17
Speaker
And now onto today's show.
00:00:22
Speaker
Welcome to TMI's TreasuryCast and HSBC's Cyboss Spotlight.
00:00:26
Speaker
I'm Eleanor Hill, Editor of TMI, and I'm delighted to be working with HSBC to bring you an in-depth look at the events from this year's Cyboss.
00:00:34
Speaker
Throughout this series, we will explore the critical topics impacting the transaction banking landscape, specifically looking at sustainability, digitization, and innovation.
00:00:45
Speaker
We'll examine the opportunities and challenges disrupting the areas of payments, trade,
00:00:50
Speaker
custody, and of course, traditional business models.
Trends and Challenges in Custody
00:00:54
Speaker
So joining me today in the virtual podcast studio, we have three experts from HSBC's markets and security services business, namely Alexis Vasquez-Meissner, who's global co-head platform sales, Suman Badresha, global head of product delivery for direct custody and clearing, and Stephen Mann, who is chief information officer
00:01:16
Speaker
So welcome to the three of you.
00:01:18
Speaker
It's really great to have you here and to have the opportunity to talk about the latest trends in the custody arena.
00:01:24
Speaker
as well as, of course, HSBC's innovative market space platform.
00:01:30
Speaker
But we've got loads to talk about.
00:01:32
Speaker
We've got loads to share with the audience.
00:01:33
Speaker
But it'd be great if we could kick off maybe with a bit of a bigger picture look at some of the challenges in the custody space today.
00:01:40
Speaker
What are the headaches?
00:01:41
Speaker
What are those pain points?
00:01:42
Speaker
And what's fueling these issues?
00:01:44
Speaker
Steve, would you mind kicking us off on that one?
00:01:47
Speaker
From my perspective as the CIO for Security Services, I see three areas, if I could break it down like that.
00:01:53
Speaker
it would be legacy, disruption, and expectations.
00:01:58
Speaker
So from a legacy perspective, we got some old technology, different ways of working.
00:02:03
Speaker
And some of these are just well ingrained into the ecosystem of custody services throughout our network and others, I'm sure.
00:02:12
Speaker
Then we have on the flip side, we have the disruptive aspect of it.
00:02:15
Speaker
Newer technologies, some of them are overhyped, some of them are not, but we don't know.
00:02:20
Speaker
The problem with this is that
00:02:22
Speaker
There's a lot of people that think we can leapfrog some of the legacy bits with just putting in the newer technologies.
00:02:28
Speaker
And that leads on to our expectation management, you know, from our clients, from our stakeholders, from our teams.
00:02:35
Speaker
It's really difficult to kind of bridge all these aspects of wanting things to be super automated.
00:02:41
Speaker
Super efficient, cost constraints, you know, compression.
00:02:46
Speaker
So I would kind of put those three things at the top of my list and the top of my head.
00:02:51
Speaker
Yeah, and I'm sure that will resonate very much with the audience.
00:02:54
Speaker
And like you say, there is no silver bullet, unfortunately, but there are new technologies coming through and they are coming online.
00:03:01
Speaker
So it's exciting stuff coming online.
00:03:03
Speaker
Coming in the future, Alexis, anything you'd add to that around the big picture challenges?
00:03:08
Speaker
Yeah, probably just complimenting what Steve has said, because what we see on the front line is that, and this is not probably a new news story to anyone, but the world is moving at an incredible velocity.
00:03:22
Speaker
And the same things that we have consistently presented, that have consistently presented both challenges and opportunities over the last couple of decades remain ahead of the custody space.
00:03:33
Speaker
There, I would refer to adaption to an ever-changing regulatory landscape, the value and the importance of digital and data solutions to support efficiency, transparency, and client experience, as Steve has just said, the modernization and transformation of our legacy operating systems to deliver scale, stability, and resilience, the rise of new technologies and instruments like digital assets, and the never-ending debate of whether FinTechs are friends or foes.
00:04:00
Speaker
So, so for us at HSBC, we're contextualizing all these trends within the aftermath of the pandemic, and also the current global geopolitical and economic environments to determine how these industry issues are tackled in an uncertain world, and one that's influencing everything from where and how we work to the way that we communicate with one another.
00:04:19
Speaker
Yeah, yeah, absolutely.
00:04:20
Speaker
Alexis, I think you managed to tick every single hot topic there.
00:04:24
Speaker
You did an amazing job of just summarizing that very succinctly for everyone.
00:04:28
Speaker
So thank you for that.
HSBC’s Vision for Digital Transformation
00:04:30
Speaker
I mentioned at the start of the podcast that we will talk about market space, so HSBC's platform, but
00:04:36
Speaker
Just before we delve into that, it would be good to understand a little bit about the bank's overarching vision for the future of custody and maybe the drivers behind it and where your platform strategy fits within that.
00:04:48
Speaker
So Suman, let's bring you in here and get your thoughts.
00:04:52
Speaker
Yeah, thanks, Eleanor.
00:04:53
Speaker
And I'll kick off and then I'll ask Steve maybe to step in with these thoughts around the platform strategy as well.
00:04:58
Speaker
So if we start with where our custody business is, you know, it's built on the core strength of our local market presence and the expertise that we have on the local practices, the laws and the regulations, particularly across Asia and the Middle East.
00:05:10
Speaker
And, you know, within that, we work very closely with local authorities in these markets to advocate for improvements, changes that generally benefit for overall market efficiency.
00:05:21
Speaker
I think in terms of our vision in a nutshell, it's to help digitally transform the custody business to provide clients with a much more improved client experience across the network.
00:05:31
Speaker
That's particularly important given the context Steve and Alexis just talked about around the disruption that we face through various different challenges, modernizing legacy technology, the demand for digital solutions, and then moves into sort of new asset classes in terms of digital asset capability.
00:05:49
Speaker
So in terms of our vision, we kind of boiled it down into four key pillars that support our vision of digitization.
00:05:55
Speaker
So firstly, it is the digital pillar, which is looking to digitize and automate the processes that we've done manually or inefficiently over the years over things like email.
00:06:04
Speaker
So processes like account opening, FX validation, trade matching, many of these have been done manually historically and need to be automated and digitized in order to create that improved workflow and improved client experience.
00:06:16
Speaker
So that's the first point.
00:06:18
Speaker
The second point is data.
00:06:19
Speaker
Data is the blood that flows through the veins of our digital transformation.
00:06:24
Speaker
And Steve and his team have built a component called Unity, which has been driving our data strategy.
00:06:28
Speaker
And what that's done is we were active in 30 markets for local custody.
00:06:32
Speaker
And it's taken data across those markets and aggregate it together, normalized it so it looks and feels the same.
00:06:39
Speaker
Once we have that, we're able to do two things.
00:06:41
Speaker
One is provide that data consistently to our clients.
00:06:44
Speaker
The second thing is develop consistent solutions just once and roll it out across the range of markets that we support.
00:06:50
Speaker
So again, that plays the consistent client experience part.
00:06:53
Speaker
And then next up, we have being connected.
00:06:56
Speaker
And being connected means two parts, really, being connected into the market.
00:07:00
Speaker
And as we just touched on, we have the local market presence foundation that helps us enable that.
00:07:05
Speaker
So market connectivity and having real-time access to data from the CSDs is incredibly important for us.
00:07:11
Speaker
But then also being connected to our clients and giving our clients a choice on how they connect to our services.
00:07:16
Speaker
So that could be through things like APIs, through chatbots, or even through portals where clients don't have the appetite to integrate to APIs, for example.
00:07:25
Speaker
So that's a key part as well.
00:07:27
Speaker
And then last but not least, I'm going to stress the point on consistency.
00:07:29
Speaker
I think...
00:07:30
Speaker
you know, if we strive to have a consistent experience across all of our markets, regardless of the different channels you may want to use to access our services, that's a real key pillar that we aim to achieve across everything we do is to make sure clients can operate with us consistently, both from a client service perspective and from a technology perspective.
00:07:48
Speaker
Steve, do you want to talk a bit more about the platform strategy that we're doing to enable this?
00:07:53
Speaker
Yeah, I'd love to.
00:07:54
Speaker
So our platform strategy is fundamentally built around what you were saying.
00:07:59
Speaker
digital data connected consistency.
00:08:02
Speaker
And it's around building and providing services, both business and technical with the aim of bridging activities such as data, such as legacy and new.
00:08:12
Speaker
Our aim is to really unify these services to make it very, very easy to connect.
00:08:17
Speaker
We started this journey about 24 months ago and we had 30 internal systems.
00:08:23
Speaker
We simply wrapped around these systems and now we're starting to build out these microservices.
00:08:29
Speaker
What we see in the future is that we want to extend that internal kind of infrastructure out more publicly to our clients, to our service providers, and to anybody else that wants to connect into this ecosystem to really help drive forward where we think the future of custody is actually going to look like.
00:08:49
Speaker
And we think that's going to be market space.
00:08:51
Speaker
really exciting things been going on behind the scenes and now yeah sharing it with everyone out in the world and we've teased market space so much now that I think we have to jump into it we can't leave the the listeners waiting any further so Suman come on put us out of our misery tell us a little bit about what market space is and and the needs it's aiming to meet
00:09:13
Speaker
Thanks, Eleanor.
00:09:14
Speaker
And I'll start with a very simple definition so we can get people to have a clear understanding of
Introduction to MarketSpace
00:09:18
Speaker
it.
00:09:18
Speaker
So MarketSpace is HSBC's new post-trade solution, which essentially allows our clients to access a range of services through a single platform.
00:09:25
Speaker
So that's it at its simplest point.
00:09:27
Speaker
And I'll touch more on what we're trying to solve with MarketSpace, because I think that will give people a better idea of the kinds of things that they can use MarketSpace for.
00:09:36
Speaker
So at its core, we're trying to revolutionize what was a complex and fragmented landscape, you know, in the post-trade space, sometimes fragmented internally, you know, between our different business units.
00:09:47
Speaker
If we start, we talked about two key areas earlier, you know, connecting to our clients and connecting to the market.
00:09:53
Speaker
MarketSpace actually started its journey at that point where, you know, we spent time connecting into CSDs to improve our connectivity into the markets and then built APIs, chatbots, so that clients could connect to us through different channels to what were traditional channels.
00:10:07
Speaker
So those were the fundamental building blocks.
00:10:09
Speaker
And
00:10:10
Speaker
Some of that connectivity piece Steve just touched on in his explanation around the platform strategy.
00:10:15
Speaker
You know, we want to be able, we want clients to be able to access traditional assets through CSDs today.
00:10:20
Speaker
But we recognize we need a platform that's going to cater for digital asset exchanges as we move forward as well.
00:10:25
Speaker
So, you know, those kind of things were the building blocks of market space.
00:10:29
Speaker
And we've then built on it in the last 12 months or so with two further ambitions.
00:10:34
Speaker
Firstly, it's integrating security services without other business lines across HSBC Group, for example, GLCM.
00:10:40
Speaker
We've listened to our clients who've said, you know, they want cash and securities data consistently from one place.
00:10:46
Speaker
Having one piece of the puzzle is great, but actually it doesn't give them the full picture that they need to service their business appropriately.
00:10:54
Speaker
Similarly, we're looking at connecting better with our FX businesses for when clients need to do custody FXs, for example, and also equities where we can provide an end-to-end opportunity around execution and custody.
00:11:05
Speaker
And, you know, Alexis will talk later, I'm sure, about the fact that clients want that end-to-end solution, the convenience to be able to access those.
00:11:13
Speaker
So that's the first part of us integrating better with our internal business units.
00:11:18
Speaker
Secondly, you know, Steve touched on open architecture and we want to open up our ecosystem to third party providers such as fintechs or other technology solution providers, because we know they have a role to play in helping us to achieve the ambitions of ourselves and our clients so they can help us automate to digitize and to ultimately improve that client experience that we're looking to hit.
00:11:38
Speaker
These partnerships will help us meet the needs of our clients for today, but also for tomorrow, because we know providers will come up with innovative solutions that have a big part to play in our ecosystem.
00:11:47
Speaker
So
00:11:48
Speaker
that second part of allowing third parties to play a role in our ecosystem and provide solutions to our clients is a key part.
00:11:55
Speaker
And again, joining that up and saying, once clients connect to our platform, they can access a range of services, whether it's HSBC provided services or from third parties.
00:12:03
Speaker
And what we hope to do for our clients is reduce integration costs from having to connect with lots of different providers, which is one of the challenges that the world faces today, given the constrained cost environment as well.
00:12:15
Speaker
Oh, absolutely, yeah.
00:12:16
Speaker
Okay, Simon, great stuff.
00:12:17
Speaker
You've given us a really good overview there of the kind of the philosophy, the ethos, the ambitions.
00:12:23
Speaker
But Steve, let's get into some of the technical nitty gritty.
00:12:26
Speaker
Tell us a little bit about how MarketSpace delivers on these needs technically.
00:12:31
Speaker
And maybe are there any considerations to be aware of from a technical perspective as well?
00:12:37
Speaker
Yeah, so MarketSpace fundamentally benefits from the building blocks that I just mentioned that we started about 24 months ago.
00:12:45
Speaker
But it leverages the legacy infrastructure and the legacy network that we had.
00:12:50
Speaker
We simply put modern technologies on top of it.
00:12:53
Speaker
We heavily invested in these areas in recent years to develop these solutions to ensure that we had this consistent data elements.
00:13:01
Speaker
And so we can simplify these data flows.
00:13:03
Speaker
A key aspect of implementing these key principles is what we're calling the strangle pattern.
00:13:08
Speaker
This approach helps us re-engineer traditional services in a meaningful manner for our business.
00:13:13
Speaker
Our open architecture enables server providers to add, develop and enhance our services.
00:13:18
Speaker
And this will allow us to integrate and engage with our clients in a more meaningful fashion.
00:13:25
Speaker
We continue to focus on innovation around data aggregation and normalization to drive this consistency across our network so that we can have the right level of analytics to spot the necessary insights.
00:13:37
Speaker
But also with this open architecture, we can embrace some of the disruption that is to come.
00:13:42
Speaker
And that is at the heart of what we're trying to do from a technical perspective.
00:13:47
Speaker
And that just happens to marry up really well with the principles of MarketSpace.
00:13:54
Speaker
Great stuff.
00:13:54
Speaker
So Alexis, let's bring you back in off of what Steve said there and maybe get a little view around why that kind of collaboration that Steve has alluded to with clients and with third parties is so important in the future and the digital landscape.
00:14:12
Speaker
Yeah, thanks.
00:14:13
Speaker
And Steve, Stumann, and I have been working together for a few years now.
00:14:16
Speaker
And when we
00:14:18
Speaker
first started on that journey, they kind of had me as a strangler pattern in open architecture, neither of which term I really properly understood.
00:14:26
Speaker
But when they finally were able to translate that for me and I could get my head around it, what it screamed at me was we were able to make corrections, if you like, and enhancements and updates to our legacy platform in a very new and quick way.
00:14:40
Speaker
And also we were able to allow our clients flexibility in terms of how they wanted to connect with us as an organization.
00:14:48
Speaker
because we started that journey together with the shared alignment of having clients at the heart of everything we do.
00:14:54
Speaker
And because that design approach for our products and services was so completely lined up with what, what we wanted to do around that client agenda.
00:15:04
Speaker
It was really straightforward for us to get experimenting with, with the, the, the nascent building blocks or the building blocks that gave birth to, to what is now market space.
00:15:13
Speaker
And we,
00:15:14
Speaker
genuinely want our clients to see us as more than just a service provider.
00:15:18
Speaker
We want to enable direct collaboration with them and ensure that our solutions really address their challenges and focus areas.
00:15:25
Speaker
Yeah.
00:15:25
Speaker
Using the core technology and infrastructure that Steve's just discussed, we have the power to create solutions with one client that are scalable and desirable to all.
00:15:36
Speaker
And it's really important that we provide more and more digital solutions in a simple way.
00:15:41
Speaker
that optimizes our relationship with those clients across the breadth of our business.
00:15:44
Speaker
And here I'm talking beyond security services even.
00:15:47
Speaker
I'll give you one example of the recent launch of our pre FX validation microservice, where we collaborated with a client who was looking to automate an historically manual and time consuming process within their restricted markets.
00:16:00
Speaker
And through this partnership, we were able to deliver an API enabled solution that reduced their turnaround time from hours to a matter of seconds.
00:16:07
Speaker
which has had a significant impact on closing out the gap between FX executions and settlement lifecycle.
00:16:13
Speaker
The microservice is scalable across restricted many of our clients' FX models, demonstrating our ability to digitize and scale through collaboration.
00:16:21
Speaker
But it all comes back to the things that Steve was talking about there, which have their roots in the strength of a pattern, open architecture, and real flexibility around client need.
00:16:31
Speaker
to solve problems.
00:16:33
Speaker
So we also know that HSBC is a large organization and our clients are often engaging with multiple areas at once.
00:16:38
Speaker
Hence my comment that these, some of these solutions, in fact, many of these solutions will span beyond security services.
00:16:45
Speaker
MarketSpace allows us to provide clients with a gateway that provides more simple access to an array of services that allows them to successfully navigate our security services and markets landscape.
00:16:56
Speaker
And where we have the expertise, we'll continue to build in-house solutions, but we're also super mindful of the fact that technology and its landscape is changing quickly and the needs to deliver digital transformation can outweigh our ability to innovate internally.
00:17:10
Speaker
So that's why a key theme of our ecosystem is to bring in external third parties and FinTech solutions to deliver a pace and provide our clients with the right solutions.
00:17:18
Speaker
With this collaborative mindset shift, our clients can leverage market space to champion their own voices and expand their digital footprints with ease to maximize their strategic business goals.
00:17:27
Speaker
So we're really proud of the work that we've been able to do together for the last few years.
00:17:31
Speaker
Yeah, absolutely.
00:17:32
Speaker
And understandably so.
00:17:33
Speaker
It sounds like there's an awful lot that's been going on behind the scenes and you're really making this work now.
00:17:40
Speaker
But for our listeners, Alexis, could you maybe spell out some of the really specific benefits that MarketSpace is delivering?
Benefits and Value of MarketSpace
00:17:48
Speaker
In order for the ecosystem to be a success, we have to be transparent on how clients and third-party providers benefit from it.
00:17:55
Speaker
That's really so that we can ensure alignment and successfully collaborate, because that's
00:17:59
Speaker
what the open architecture model is ultimately there to encourage and to begin to drive solutions from.
00:18:07
Speaker
So providing multilateral connectivity, streamlines data transfer between our clients, HSBC and service providers and provides greater all around efficiency for the security services landscape.
00:18:18
Speaker
At a high level, the key benefits of market space are it's that it's simplistic in nature.
00:18:24
Speaker
All of our post-trade solutions are available through a singular access point leveraging multilateral connections.
00:18:30
Speaker
It allows us to work smarter through accessing real-time data to provide opportunities through seamless connectivity.
00:18:36
Speaker
And it's available now.
00:18:38
Speaker
Much of the core technology infrastructure is live and in use, allowing us to scale efficiently with strategic providers over the next 18 months.
00:18:45
Speaker
So from our client's perspective, some of the key benefits would be convenience, solutions, reliability, efficiency, and flexibility.
00:18:53
Speaker
And let me just elaborate on one of those flexibility to illustrate the way that we consider client benefits is that seems to be the, the Holy grail of what everyone is looking for in the current environment.
00:19:04
Speaker
Another challenge for our clients is how they connect to solutions.
00:19:08
Speaker
And that can be in contrast to their chosen operating model.
00:19:12
Speaker
So that impedes their digital adoption and access to a wider range of solutions.
00:19:16
Speaker
Market space provides a singular access point solutions by a consolidated suite of digital channels.
00:19:22
Speaker
that creates a consistent user experience and fits with our client's strategic needs.
00:19:27
Speaker
Whether that's portal-based, through reporting solutions, or through direct integration with APIs and chatbots and other methods of communication, clients benefit from consistent data-driven connectivity and transparency.
00:19:39
Speaker
And then they have the flexibility to pick and choose their own preferences of services they want to connect to and avail of free trial periods to try before they buy with the knowledge that all future new services or enhancements will be available directly on the platform.
00:19:53
Speaker
And I think if we're really honest with ourselves, that's how most of us live our lives.
00:19:57
Speaker
And in the early days when we were first getting this off the ground, Sue and Steve and I had kicked around models that are pretty well known and understood to the average consumer.
00:20:07
Speaker
So things like Uber and Deliveroo and Amazon.
00:20:11
Speaker
And we really wanted to apply the same level of flexibility that we experience in our own lives to the experience in the post-trade world.
00:20:19
Speaker
And that's where a lot of our ideation was born from.
00:20:22
Speaker
Yeah, and I'm sure that will be music to our listeners ears, no doubt.
00:20:27
Speaker
Suman, anything you got there around the benefits?
00:20:31
Speaker
Just if we look at it maybe from a provider point of view as well, I think Alexis covered the client benefits fantastically there.
00:20:36
Speaker
And it's good to remind people that MarketSpace is a platform model.
00:20:39
Speaker
So we have benefits for both clients and providers.
00:20:42
Speaker
And actually, both parties benefit each other in that model.
00:20:46
Speaker
So if we look at HSBC, I mean, we're very well placed to enable those benefits given we're one of the leading security services provider in Asia and the Middle East.
00:20:55
Speaker
So we have that network and connectivity across that landscape and the ability to service our clients and create, and that creates a unique opportunity for partnerships with third parties.
00:21:05
Speaker
And, you know, if I go into that a little bit more, you know, our partners will gain access into our network of clients that are looking for solutions to help digitize and automate and improve the client experience.
00:21:15
Speaker
So
00:21:15
Speaker
you know, at its simplest point, market space is implementing a platform model.
00:21:20
Speaker
It's connecting consumers who are our clients to producers who provide services.
00:21:24
Speaker
And some of those services will be provided by HSBC, as Alexis just talked about around using, you know, not just security services, but across markets as well.
00:21:33
Speaker
But it'll also be producers who are third parties who are not part of HSBC, but they provide a huge value into the chain.
00:21:40
Speaker
So it's a unique opportunity for those providers and third parties to actually
00:21:45
Speaker
access our clients and help our clients and ourselves solve that problem and help us on that digitization journey.
00:21:50
Speaker
A little bit similar to Amazon, Eleanor, where you can buy products from Amazon directly or third parties who might be listing services on Amazon.
00:21:57
Speaker
Yeah.
00:21:58
Speaker
So the other the other aspect, I think, is we specialize in Asia and the Middle East, as I mentioned, you know, these these markets often have untapped potential for many of our providers.
00:22:07
Speaker
So what we offer is we have the ability to help our providers diversify the coverage and we have the presence to support their growth and ambitions in those markets.
00:22:17
Speaker
We also have, as Steve touched on, a lot of technology infrastructure in those markets, particularly.
00:22:22
Speaker
along with relationships with cloud providers and other technology providers, which can help our partners as they diversify their global coverage.
00:22:32
Speaker
Another aspect is simplification.
00:22:33
Speaker
So in many cases, what we hear from clients and providers is that the integration efforts that clients and providers have to go through creates a big lead time around how they can onboard clients onto their products.
00:22:45
Speaker
And that's a frustration for clients as well as providers.
00:22:48
Speaker
But
00:22:48
Speaker
you know, through connecting and integrating with us once we can, we can allow providers to spend more time on product development and, and accelerating the onboarding of clients rather than the effectively wasted effort of connecting directly each time.
00:23:00
Speaker
And last but not least, I think one of the key features we're aiming to provide in market space is really to give clients a chance to trial products.
00:23:06
Speaker
I mean, how often in our personal lives do we try something and then really see the benefit ads, you know,
00:23:12
Speaker
I certainly do it all the time.
00:23:13
Speaker
So in this cost constrained environment, you know, the ability for clients to execute POCs with providers, you know, really provide real input into business cases so we can demonstrate value, I think will really help providers, you know, get clients on board with their solutions and demonstrate the value they bring.
00:23:30
Speaker
So I think there's real value on both sides of the equation there.
00:23:33
Speaker
Great stuff there, Suman.
00:23:35
Speaker
It would be really nice if you could outline some real-world use cases for us that maybe demonstrate where MarketSpace is delivering practical value.
00:23:44
Speaker
Yeah, thanks.
00:23:45
Speaker
It's a really good point.
00:23:46
Speaker
And as Alexis mentioned, much of this is actually live now and it's presenting us with opportunities to expand.
00:23:51
Speaker
I'll start with some of the key services that we have live already.
00:23:55
Speaker
So if we take market connectivity as an example, we've really focused on improving our real-time connectivity into markets such as Hong Kong, Singapore, Taiwan, Korea.
00:24:05
Speaker
And that allows our clients to get a real-time access to information as it happens.
00:24:09
Speaker
You know, many of those markets didn't have that, the opportunities of doing that previously.
00:24:13
Speaker
So enhancing that is really making a difference.
00:24:16
Speaker
We're also seeing market infrastructure evolve.
00:24:18
Speaker
So you're seeing things like the chess upgrade in Australia, Project Synapse in Hong Kong, where the ambition to provide real-time updates to all parties at the same time is there.
00:24:27
Speaker
And we want to help our clients solve those challenges.
00:24:29
Speaker
So that's a really good use case and talks about the connectivity piece.
00:24:34
Speaker
Secondly, I think in terms of data, we now have many APIs available, particularly across trade status and holdings, which clients can access.
00:24:42
Speaker
And what this gives our clients is access to information over and above traditional channels such as Swift.
00:24:48
Speaker
So in many cases, the attributes that we have available on our APIs actually is effectively a full integration into the data that we have in our systems.
00:24:58
Speaker
And it means that clients can resolve problems quicker, prevent queries from needing to be raised,
00:25:03
Speaker
and ultimately allow them to service their end clients better.
00:25:05
Speaker
Again, the analogy I'd give is, you know, when you want to see the status of a parcel, you can probably log into somewhere and see, okay, this is where it is now, rather than having to phone up, which is the traditional channel.
00:25:15
Speaker
So that's how we've transformed that experience.
00:25:17
Speaker
So we also see that extending to places like the front office, who trading desks now want to see real-time position information to manage their inventory better, for example.
00:25:27
Speaker
So not just security services, but actually across the value chain, real benefits there.
00:25:32
Speaker
Alexis spent time talking about the FX API solution that's live.
00:25:36
Speaker
So that's really looking at the workflow that we had in place historically and saying, actually, we can do this much better with the technologies that Steve's outlined now.
00:25:42
Speaker
So, you know, reducing that FX risk of potentially only executing at the end of the day to saying, right, once it's matched in the market, I can go and execute and really, really managing FX risk, particularly in light of the various geopolitical issues that we have going on around us.
00:25:57
Speaker
Absolutely, yeah.
00:25:58
Speaker
Steve has talked about the importance of our architecture, so we also know that China is an important strategic market for us and Steve's team has spent a lot of time creating cloud infrastructure with Ali cloud in China so that we can host our microservice solutions as we expand our features and capabilities in those markets so.
00:26:16
Speaker
All of this that I've mentioned is live and what we're looking to do now is build on that and work with colleagues in GLCM, for example, to provide that combined cash and securities view as we spoke about.
00:26:26
Speaker
So that's something we aim to do.
00:26:29
Speaker
We're also looking to bridge between traditional and digital assets.
00:26:31
Speaker
So building our own tokenization engine, which will be part of MarketSpace, which will provide the access to those digital asset services.
00:26:40
Speaker
And we've already worked with SGX and Tamasek in Singapore to tokenize bond issuance.
00:26:45
Speaker
So this is very much a continuation of that roadmap and looking to as the asset class expands.
00:26:51
Speaker
We're also in discussions with a number of providers, for example, ESG providers who have data that our clients want to be able to assess the ESG ratings of their portfolios.
00:27:00
Speaker
So, you know, there's a raft of third parties there, all which have niche data sets and collections and features, which, you know, if we bring them into our ecosystem, gives our clients a chance to choose the providers they need to best suit their needs.
00:27:13
Speaker
So...
00:27:14
Speaker
So bringing those in as well will bring real client value.
00:27:17
Speaker
And that's where our focus is really now connecting better internally within HSBC and also bringing some of those providers in into that ecosystem so our clients can benefit.
00:27:26
Speaker
Absolutely, as you say that ESG piece is just so key now across the board.
00:27:32
Speaker
So great to see that coming online.
00:27:35
Speaker
Steve, final question for you and then we'll get some sum up from everyone.
Future Developments and Collaboration
00:27:41
Speaker
But I mean, it sounds like you've been super busy, you've achieved so much already, but I have to ask, what are you planning in terms of developing this ecosystem in the future?
00:27:51
Speaker
In the short term, a key focus for MarketSpace is to navigate new technologies and asset classes for, for example, unlocking digital asset opportunities.
00:28:01
Speaker
We have a pattern in which we engage with this.
00:28:05
Speaker
As Sumit has mentioned, there's some markets that are actively implementing this, like ASX, but it is the tokenization piece because the digital asset ecosystem is just way too big to ignore.
00:28:18
Speaker
So therefore, it's going to be a key component of our
00:28:19
Speaker
Markets-based roadmap in the near future.
00:28:22
Speaker
But our aim is ultimately to be the provider of choice for both traditional and digital assets.
00:28:28
Speaker
We already have a number of key initiatives live in these areas, like Digital Vault.
00:28:33
Speaker
We had a project with Singapore called Project Hash.
00:28:36
Speaker
We had FX Everywhere.
00:28:38
Speaker
We will continue to focus and build out these capabilities, connecting all our traditional
00:28:42
Speaker
CSD elements with this future network of opportunity.
00:28:47
Speaker
Longer term, as HSBC's market space establishes itself in the market, we will prioritize desired utilities that we can scale quickly to ensure that the platform benefits from the interoperability of as many clients and providers' connections as possible.
00:29:03
Speaker
Great stuff Steve, it sounds like you're going to be super busy and look forward to checking back in with you in maybe six months to a year and seeing how that's all progressing.
00:29:14
Speaker
But for now it'd be great to wrap up with maybe some key takeaways from each of you for our listeners, any next steps, anything in particular they should be thinking about.
00:29:25
Speaker
Alexis can I come to you first?
00:29:27
Speaker
Yeah, sure.
00:29:28
Speaker
So my key takeaway is that in this ever evolving digital landscape to be successful, collaboration is really going to be key.
00:29:37
Speaker
Whether you're a client or a service provider with HGPC MarketSpace, we want you to feel empowered to connect with and share your ideas and needs and to collaborate and learn, not just with us, but from one another.
00:29:49
Speaker
We need to hear about you in order to grow an open and collaborative framework with our partners that aligns with our clients' roadmaps and visions for the future.
00:29:56
Speaker
And we want listeners to feel empowered to connect with us in order to leverage HSBC's depth of experience and global network.
00:30:03
Speaker
And MarketSpace's platform strategy and technology capabilities to springboard ideas and experiments into reality.
00:30:10
Speaker
Now is the time for us to engage and connect within the ecosystem's partnership.
00:30:14
Speaker
And to clients, I'd say get in touch with your HSBC dedicated client executives to find out more about the ecosystem and how it can benefit you to collaborate on future opportunities.
00:30:24
Speaker
And to service providers that are interested in working with us, we want to hear from you about how you think you could contribute to the ecosystem and become a strategic partner.
00:30:33
Speaker
Details on how to get in touch on our website, just search HSBC MarketSpace.
00:30:38
Speaker
And so to close off, let me just reiterate the power of our success is in our ability for HSBC clients and service providers to connect, share and engage with us.
00:30:47
Speaker
So please make sure you do.
00:30:49
Speaker
Do you have any final thoughts from you?
00:30:51
Speaker
Just want to reiterate is connectivity, the consistency that we want to ensure that we provide the best experience for our providers, our clients, and our partners.
00:31:01
Speaker
Perfect.
00:31:02
Speaker
So, Emma, over to you.
00:31:03
Speaker
I think we're all going to build on what Alexis has said, really.
00:31:06
Speaker
That key point she made, we've collaborated internally for a number of years across sales, product and technology.
00:31:11
Speaker
And that's been a key part of us growing internally.
00:31:13
Speaker
And I think in the last few years, we've collaborated heavily with our clients to build some of the solutions that I mentioned around market connectivity, data APIs, FX APIs.
00:31:23
Speaker
All of those things are driven by our clients.
00:31:24
Speaker
So really continuing to hear from our clients,
00:31:27
Speaker
is key for us solving the right problems end to end so that we get we get efficiency across the board similarly on the provider side we need we need their innovation we need your help and support to power this transformation journey so please do come and talk to us and help us solve these problems for us and our clients and i think as steve's talked about we've got that flexible architecture that can evolve and we want to evolve it in the direction that solves problems for our clients and enables third parties to play a role in that
00:31:52
Speaker
Brilliant stuff.
00:31:53
Speaker
Well, thank you ever so much, all three of you for joining us today.
00:31:56
Speaker
It's been fabulous to have you here to speak about custody trends, to hear all about market space, what it's delivering live right now, and also what you have planned.
00:32:06
Speaker
And I wish you all the best of luck with those future plans and look forward to hearing all about it in due course.
00:32:14
Speaker
And for those of you listening, thank you also for your interest.
Closing Remarks and Future Engagement
00:32:18
Speaker
This has been HSBC Cyber Spotlight, a podcast miniseries produced especially by TMI for HSBC Global Viewpoint.
00:32:26
Speaker
To discover other episodes in this series, search for HSBC Global Viewpoint on Apple and Spotify or head to gbm.hsbc.com forward slash cybos where you can also find out more about HSBC's Transaction Banking Insights.
00:32:43
Speaker
and presence at Cybots.
00:32:44
Speaker
Thank you for listening.
00:32:47
Speaker
Thank you for joining us at HSBC Global Viewpoint.
00:32:50
Speaker
We hope you enjoyed the discussion.
00:32:52
Speaker
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