VIDEO | As financial institutions prepare for 2025, the focus on updating legacy systems and integrating advanced technologies like AI and distributed ledger technology (DLT) has intensified. At the PostTrade 360° Nordic 2024, panelists discussed the complexities of tech transformation, from democratising data access to managing risk through human-in-the-loop AI. The need for change is increasingly driven by rising client expectations for real-time, digitally native services that legacy systems struggle to deliver.
Panelists highlighted the obstacles of maintaining legacy systems that are deeply embedded in each firm’s operational architecture. Duncan Cooper, chief data officer of Northern Trust Asset Servicing, acknowledged the difficulty in phasing out mainframes, noting, “The bigger the organisation, the harder it can be to take things out and try and improve them.” Many institutions still rely on mainframes because, as Cooper put it, “Mainframes hang around for a long time because they work,” despite aging technology and the cost of skilled staff to maintain them.
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Francisco Ceballos, head of Product, Data & AI at BNY, noted that the shift to the cloud is driven by the need to make data more accessible and scalable. “We’re kind of moving more from mainframe also to cloud, because the technologies that have been made available to us can’t cope with those scales of all that data,” he explained. However, the transition is complex, requiring a thorough re-engineering of processes rather than a simple “lift and shift.”
Role of AI
The adoption of AI is central to making data more accessible and enhancing productivity. Roger Burkhardt, CTO of Broadridge Financial Solutions, shared that AI interfaces are already transforming productivity by streamlining workflows. “One of the things that I’ve been most impressed about generative AI is it enabled us at Broadridge to come out with conversational interfaces, the kind of things that my teenage daughters would have found very comfortable on a chat,” he explained, highlighting how AI can simplify complex data interactions and meet the expectations of a younger, digital-native workforce.
Burkhardt emphasised that AI’s ability to predict trends and automate repetitive tasks must be balanced with human oversight, a fundamental part of their implementation strategy. “The human-in-the-loop is the fundamental risk mitigation device for generative AI right now, right?” he stated. This approach helps financial firms leverage AI’s power without compromising on accuracy or regulatory compliance, as human experts validate AI-suggested actions.
Quantum computing
Cooper raised concerns about the potential threat of quantum computing, particularly its impact on encryption and cybersecurity. “If quantum computing can really start to deliver the things we say that it can do, it should be able to crack encryption in seconds,” he warned. Cooper described it as “a bit of a sleeper” risk, yet one that could redefine the industry. Ceballos added that this concern is already shaping institutional strategies, saying that “2025 will see their biggest focus being security,” reflecting the need for stronger data protection.
Panelists emphasised the importance of democratising technology and creating a harmonised data infrastructure that fosters efficient, real-time access to information across platforms. Ceballos stressed the need for a semantic layer that clarifies relationships between data points, stating, “At the end of the day, everything comes down to making the use of that data and the communication across systems as quick as possible.” This approach, he explained, empowers clients to interact with data without requiring them to delve into technical complexities.
Closer than ever
Mack Gill, head of Securities Processing at FIS, underscored that accessible technology isn’t just for tech experts. “Regardless of your role, you’re closer than ever now to being part of the test case for new technology,” he said, highlighting the shift from black-box technology to transparent, intuitive platforms that allow more employees to engage with and understand the systems they work with.
The panelists agreed that each technology initiative should begin with a concrete business case to justify the investment. Cooper advised that “some of the worst programs and projects I’ve seen in my past history have been where there wasn’t the simple thing of a business case at the start.” This approach, he emphasised, helps cut through complexity and aligns tech projects with measurable benefits.
Panellists:
Roger Burkhardt, CTO Capital Markets, Broadridge Financial Solutions
Francisco Ceballos, head of Product, Data and AI, BNY
Duncan Cooper, chief data officer, Northern Trust Asset Servicing
Mack Gill, head of Securities Processing, FIS
Moderator:
Virginie O’Shea, founder and CEO, Firebrand Research