As the landscape of communication continues to evolve in our increasingly digital world, the financial services industry is feeling the pinch of regulatory scrutiny. In recent years, financial firms have faced nearly $2 billion in penalties from the SEC and CFTC due to unregulated “off-channel” messaging. This surge in “off-channel” communication, including usage of platforms such as WhatsApp, WeChat, SMS, LINE, and mobile calls, is largely fueled by the rise of hybrid work. Yet, regulators maintain that all business communications must be monitored, auditable, and occur only within official channels. In the words of SEC Chair Gary Gensler, “As technology changes, it’s even more important that registrants appropriately conduct their communications about business matters within only official channels. And they must maintain and preserve those communications.”
Don’t Fence Me In: Global Finance Shifts Toward an Open Approach
Yet, Apple’s technology is based on an exclusive ecosystem. To be an Apple user, generally speaking, you must buy an Apple device (or in some cases, several of them…between me, my wife, and my kids we have 6). This contrasts with Google’s Android model, whose operating system integrates with a variety of smartphones and other devices.
Last year, Apple made headlines when it announced that starting in the fall of 2021, Windows and Android users will be able to join FaceTime calls. Presumably, Apple recognizes that limiting FaceTime to Apple devices means losing market share to competitive apps like Zoom or Microsoft Teams. By restricting access to FaceTime, the company was limiting its users, and in turn its own growth. Apple’s decision to open FaceTime to users of other devices and operating systems reflects a broader technology trend toward more open platforms and ecosystems.
In the finance world, we’re no strangers to exclusive technology platforms. Since the early 1980s, the idea of having a one-stop-shop platform has been ubiquitous on Wall Street. And while it’s common to see expensive ‘terminals’ all across trading floors, the middle and back office often lack access to these devices (and therefore, the data that is only available within the very same terminal ecosystem). Like Apple, these terminals have constructed an ecosystem where the barriers to entry are high. The product is a valuable resource, but not one to which everyone in the industry has access.
Of course, much has changed in the last 40 years (other than fashion). Today, financial firms want access to the tools and data they need in a way that is conducive to their workflows. In addition, they want to use platforms that are accessible to a broader universe within the industry–in other words, where the front, middle, and back offices can all collaborate.
At Symphony, we are believers in an open approach. We operate similarly to Android, in that you don’t have to come onto our platform to use our services. We embed our capabilities onto our clients’ tech stacks, rather than insisting that they adopt ours. Symphony also integrates solutions from outside of our four walls, rather than building everything ourselves. By partnering and collaborating with fintechs, clients, and other organizations, we have become a marketplace where clients can select and implement the solutions that best suit their needs. Finally, as mentioned by our CIO Dietmar Fauser in a blog post last year, Symphony promotes inter-process interoperability. In addition to our existing client and server side APIs we will support the FDC3 standard and expose an FDC3 compliant interface in order to offer easier and more versatile integrations between desktop applications and Symphony.
Exclusivity has been a defining principle for brands like Apple–and this has, in many ways, been a successful strategy for the company. But at Symphony, we believe the future is about inclusivity. We are moving toward a world where technology is not a competitive advantage reserved only for those who can afford or access it, but a universally accessible tool that both levels the playing field and also allows companies and individuals alike to select the best-of-breed for their needs. Inclusiveness and openness is what enables this.
You may also like
We live in a fast-evolving age of information, where Artificial Intelligence (AI) tools are starting to be used in many areas like financial decision-making and
Almost a decade ago, Europe led the way in shortening the settlement cycle to T+2 – a task that required wholesale re-engineering of European market-structure. Mere months from now, European securities firms will again be challenged – this time with the move to US NEXT-DAY settlement. Once more, our market participants face a complete restructuring of entire organisational workflows.