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'Technology Has Turned The Market Upside Down'
Abhishek Bhattacharya, Vice President, Sapient Global Markets, in an exclusive interview explained about how technologies evolved in last few years are creating change.
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Abhishek Bhattacharya, Vice President, Sapient Global Markets, in an exclusive interview explained about how technologies evolved in last few years are creating change. Companies now have to focus on complying with changing regulations and improving consumer experience in the commodities market.
How have commodities markets changed in the last few years and what future does it has?
Technology has changed the entire dynamics of production, storage, and trading across the industries in the last few years. Due to digital disruption, the markets have immensely transformed and innovations like algorithmic trading have completely changed the liquidity situations. Regulations, as an important part in every firm, have forced organisations to be lot more transparent, standardise the data, and break out of silos. Markets have also substantially upped the infrastructure. Also, evolved exploration technologies have helped in the discovery of new energy commodities. Going forward, I believe that technology will enhance user experience and participation in the capital and commodities markets.
Which are the most important tech innovations disrupting the space?
First and foremost, self-learning and artificial intelligence based technologies have offered a potential platform for smart algorithms to identify new trading (and market abuse) patterns which automates the decision making process in high paced financial trading environment. Down the line the innovations like Data Analytics, Robo Advisers, Cryptography & passwords and Blockchain/Distributed ledger have also paved the way for a digital future of capital and commodities markets.
How will traditional businesses cope if these innovations deploy?
Even though the long term business advantages of these technologies are well listed, the initial outlay of funds is a challenge. In the capital markets, especially the sell side firms are serious investor in new and upcoming technologies. However, the traditional businesses (brokerages, investment banks, advisors, and energy producers etc.) are aware of the benefits and have been extending their monetary and lobbying support. We also see regulators increasingly inclined to adopt the technologies that can improve the consumer experience and reduce or eliminate fraudulent market practices.
Are the Indian trends different from those around the globe?
The adoption of technology in India is slightly slower as compared to the developed markets in the West. However, some remarkable progress have been seen. In the capital markets, last year, the central bank (RBI) announced setting up of a dedicated digital arm to speed up the process of adoption of digital solutions by banks. The arm will also help the central bank to detect any illegal market practices like international money laundering. We need a comprehensive policy that encompasses capability development, pricing, environmental regulation, and careful selection of explorers as there is a huge capital infusion needed.