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Future-proofing the next generation of financial market infrastructures: The devil is in the data
Journal of Digital Banking,
4
(2),
125-130
(2019)
Abstract
Financial market infrastructures (FMIs) generate immense amounts of data that is valuable for many purposes ranging from optimising liquidity to enabling better risk management and generating insights about the economy. This paper discusses practical outcomes that can be achieved with advanced analytics using artificial intelligence and machine learning algorithms, how to get there and some potential pitfalls along the way. The paper should provide sufficient insight for readers to consider new technologies and approaches to meet industry guidelines. Additionally, it shares best practices on how, as a result of increasing interconnectedness in the global financial markets, FMIs and their regulators need to help one another improve their anti-money laundering posture and systemic risk exposure.
Keywords: market; infrastructure; data; network; analytics; next-gen; crisis
The full article is available to subscribers to the journal.
Author's Biography
Kimmo Soramäki is the Founder and CEO of Financial Network Analytics (FNA) and the founding Editor-in-Chief of the Journal of Network Theory in Finance. He started his career as an economist at the Bank of Finland, where, in 1997, he developed the first simulation model for interbank payment systems. In 2004, while at the research department of the Federal Reserve Bank of New York, he was among the first to apply methods from network theory to improve our understanding of financial systems. During the financial crisis of 2007–2008, Kimmo advised several central banks, including the Bank of England and European Central Bank, in modelling interconnections and systemic risk. This work led him to found FNA in 2013 to solve important issues around financial risk and to explore the complex financial networks that play a continually larger role in the world around us. Kimmo holds a Doctor of Science in Operations Research and a Master of Science in Economics (Finance), both from Aalto University in Helsinki.
Dave Sissens is the Global Head of Financial Market Infrastructures for Financial Network Analytics (FNA). With over 25 years’ experience in designing and implementing many aspects of a financial market infrastructure (FMI), and as the previous Head of Operational Strategy for CLS, Dave thoroughly understands the practical applications of how network analytics can deliver tangible business outcomes, while reducing operational risk. He has implemented global solutions for one of the largest FMIs, using data and advanced analytics to improve its day-to-day operation significantly. He has also led global engagements while a partner at a European consultancy and had full ownership of the payments and data practices.
