Rob Palatnick, Managing Director and Chief Technology Architect at DTCC
Please give us a bit of background on yourself, and how your organisation plays a leadership role in the financial technology space.
At DTCC, I serve as Managing Director, Chief Technology Architect, where I am responsible for the global IT strategy, architecture, standards and engineering design of the systems and applications that support the firm’s products and services. I also lead DTCC’s technology innovation initiatives, including cloud, automation, big data analytics and distributed ledger technologies.
DTCC was an early pioneer of leveraging technology to automate post-trade processes. Our founding is rooted in solving Wall St.’s infamous “paper crisis” in the 1970s, and since then, we have continued to develop innovative technology solutions that reduce risks and costs and drive greater efficiencies for the global marketplace.
Over the past 40 years, we have expanded our portfolio of solutions from equities to fixed income to ETF’s, mutual funds, variable annuities and the swap asset classes. We have partnered closely with our clients to improve and accelerate settlement cycles, optimize liquidity and enhance our risk management capabilities to reduce counterparty, operational and systemic risks. We’ve achieved these objectives by continuously evolving our business and technology, leading industry dialogues and helping to drive positive change. We’ve also collaborated closely with our clients, partners, regulators and other stakeholders. As a user owned and governed entity, we take a lot of pride in ensuing that our business goals and objectives are consistent with our clients and that our capabilities are driven by their priorities.
How well are financial companies adapting to the coming of age phase of fintech development? Where are the opportunities, and where are the roadblocks still?
Fintech is not a new concept. We can all agree that technology has been transforming the financial industry for decades, but the “fintech” word is now being used in two different contexts – the financial technology itself, and the new startup company culture that is leveraging the technology to disrupt the existing model.
On the technology side, we are definitely in a “perfect storm” where the combination of technologies focused on scale and productivity, such as cloud, robotics and artificial intelligence, along with nascent, yet promising, technologies like distributed ledgers, are being combined to bring significant modernization and efficiencies to the industry in a relatively short timeframe.
DTCC and financial institutions that are regulated and trusted by the investing public with retirement accounts, pension funds and savings accounts, are being appropriately cautious. We are, however, taking a very open, opportunistic view of fintech startups and are currently working with several vendors across projects. The combination of start-up vendors’ innovative spirit and client focus coupled with the quality, reliability and operational focus paramount to regulated financial infrastructure providers should create several unique opportunities to transform the financial markets operational landscape.
What challenges do you see for blockchain maturation and adoption within financial services?
Simply put – patience. The biggest challenge, from our perspective, has been simply letting distributed ledger technology go through its maturation process as all new technologies do. After all, it takes time for a technology to effectively mature and address its limitations, such as security and scalability or performance and quality. To get there, it takes trying, failing – in a safe, measured way - and trying again. Only then will the technology be able to adapt and improve.
The best opportunities in the short to medium term are going to be smaller volume, smaller scale applications that will allow us to test the safety and soundness of the technology. This will likely start with operational processes that are currently manual or have limited automation.
It also takes collaboration. We must work together across market participants, industry organizations, regulators, consortiums, technology and market structure providers to develop best practices, implement open source offerings and create interoperability standards for DLT. In the absence of these things, solutions will be created separately leveraging proprietary models, creating the same silos and disjointed systems that exist today.
What will you be discussing at The Economist's Finance Disrupted Conference?
Disruption. At DTCC, we continually try to disrupt ourselves. We view DLT and other emerging fintech solutions as enablers of the future, allowing us to continue to drive positive change and deliver on our risk and efficiency objectives while transforming the industry for decades to come.
To learn more about the Finance Disrupted event, please click here.