Article / 22 October 2014 at 13:41 GMT

#TradingDebates: Technology will 'wipe out' some players: Cassina

Former managing editor, TradingFloor.com / Saxo Bank
Denmark
  • Financial players will continue to fight for space 
  • Competition and technology has seen margins narrow dramatically in a decade
  • Some banks may be forced to close

By Martin O'Rourke

The nature of financial markets has changed dramatically in the last decade and will continue to sweep up players that can't cut it in the modern world, Saxo Bank's Matteo Cassina said in London Wednesday.

"The electronic market makers have emerged and benefitted an industry that was not very efficient or transparent through new innovation and technology," he said.

Cassina, keynote speaker at the #TradingDebates conference in London, charted a course through the last 15 years of financial markets. Global exchanges – the traditional service providers – have been forced to compete with new kids on the block such as large broker dealers and global banks, which in turn have faced a new challenge from electronic market makers and, most recently, those occupying the Fintech space.

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 Electronic trading is here to stay. Photo: Spencer Platt \ Thinkstock

Adapt or die

"Every single player is surrounded by technology and challenges in technology," Saxo Bank's head of business lines said. "The market is dominated by volume, scale, technology and unit cost and the electronic market makers, for example, are here to stay."

The impact on markets has been enormous, he said, pointing out that whereas in 2000, margins could extend to as much as 70 basis points, innovation and efficiency had seen that narrow to one basis point.

"In the coming months, many banks will have to take tough decisions," he warned. "Some may be forced to exit."

Martin O'Rourke is managing editor of TradingFloor.com
5y
fxtime fxtime
Definitely agree...we may see telecom groups being the banks of the future ...mobile payments in Africa has grown exponentially and the westernised world has a far stronger infrastructure established for mobile payments and banking via smartphones.
5y
Simon Kjaer Simon Kjaer
fxtime what are your thoughts on apples new mobile payment system?
5y
fxtime fxtime
I doubt it is a game changer to be honest....they were good at getting VISA onboard which is better than their competitors except paypal are slightly ahead of the curve. PAYM is also showing amazing growth and Apple have the drawback that their ITUNES payment system is constantly being hacked and Itunes do nothing about it so it doesn't inspire for the integrity of their mobile system. Whilst VISA have good embedded security which I assume crosses over to the Apple scheme it may take time for Apple users to believe in Apple....just try their customer support systems...all online with automated responses and never any outcome. They are like what Microsoft used to be...dismal at any after sale service :-(

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