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Tabb Group Shares Its Market Predictions for 2018

Traders Magazine Online News, December 5, 2017

John D'Antona Jr.

Market consultancy Tabb Group shared its predictions regarding RPA, blockchain and other hot topics for 2018 with Traders Magazine.

As written:

Dayle Scher, Analyst

  • “Robotic Process Automation (RPA) provides greater opportunity to the buy-side (particularly Tier 2 and 3) to automate repetitive processes, as simplified, user-enabled self-service interfaces integrate more efficiently with legacy systems – all resulting in faster delivery of process automation, integrated with the cloud.”
  • “RPA vendors win in 2018 – particularly those with a focus on financial services – as firms begin to look beyond task automation toward RPA for the enterprise.”
  • “Banks focus on Big Data as their top priority in 2018, while the Buy-side prioritizes Cloud Computing, and the Sell-side invests heavily in Artificial Intelligence, all at the expense of DLT development.”

Monica Summerville, Head of European Research

  • “Blockchain: A central bank will launch a cryptocurrency. Blockchain will move into production in capital markets, with likely use cases being trade finance, syndicated loans or issuance & corporate actions.”
  • “Cloud: Hosting capital markets’ workloads in the cloud will be the norm.  Alibaba will move into the ‘top three’ of global cloud service providers.”
  • “RegTech:  Open banking and PSD2 results in Europeans able to manage their finances through social media or other non-bank apps.   Overlapping, cascading and sometimes contradictory regulations, including MiFID2 (yes, compliance efforts continue in 2018), GDPR, PSD2, FRTB, BCBS 239, CAT etc  will force firms to finally address data architecture issues, embrace Big Data approaches and utilise public cloud.”
  • “AI: As Brexit approaches, many capital markets roles axed in London will be replaced with AI, not new EU-based staff.  Meanwhile, as cloud providers compete to make AI user-friendly, approaches like ML, NLP, and RPA will be integrated into most capital markets workflows.”
  • “Funding: FinTech investment continues to stay strong in total dollar terms with focus shifting from seed to later stage investments.  Investment in B2B FinTech heats up while B2C levels off as it matures, meanwhile corporate venture investing will continue to grow.” 

Radi Khasawneh, Analyst

  • Stagnant FICC trading revenues will receive a welcome boost from QE tapering and rates rises. The rise in average daily trading volume will not be enough to rescue sell side and HFT trading business models, leading to many more partnerships and alliances between market makers as they focus on efficiency and price formation. These new integrated platforms will provide the infrastructure for a revamp of best execution analytics led by MiFID II, though full transparency and venue dynamics will still not be clear by year end. Nevertheless, this will create a virtuous circle that will lead to a quantum leap in O/EMS for fixed income. Like the US, over the implementation period we are likely to see trade size decrease and migrate to regulated venues and exchanges.
  • We will finally see real momentum and development of futurized products and ETFs on exchange, once again driven by the availability of data and the emergence of a two way market.
  • Voluntary clearing will continue to increase, as the dynamics of NDFs, inflation and other derivatives become affected by margin and collateral rules.

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