Launched during Sibos 2014, the report examines a combination of market and regulatory forces reshaping the industry: economic pressure, constrained financial resources, greater scrutiny of conduct and conflicts, evolving client needs, and technological innovation.

“While these market forces are not new, in combination they will result in major structural changes,” said Daniela Peterhoff, Partner at Oliver Wyman. “Execution is becoming commoditized, leading to a shift in services across providers. Core settlement and custody are moving closer to a utility model, while in parallel, value-added post trade and related services are growing, particularly collateral management.”

The report also examines the risks that will emerge as these changes occur: financial risk migrating from the execution layer and the sell-side to post-trade market infrastructure providers, plus operational risk increasing market-wide as a result of higher flow and interconnectedness. In addition, the report considers how provider risk frameworks and recovery & resolution planning will need to respond, and the systemic risk associated with individual institutions.

"This research shows interesting changes happening to the structure of the securities markets, with many different market participants shifting into new areas. To be successful, companies will need to understand the emerging risks and opportunities when deciding on their future strategic focus," says Fabian Vandenreydt, Head of Markets Management, SWIFT.

A key conclusion of the report is how market participants will be forced to adapt their business models as a result. The report assesses in depth the ability of the various actors in the industry’s value chain to seize emerging opportunities and how their roles will change: broker-dealers, exchange groups, clearing houses, custodian banks, (international) central securities depositories, and data and technology specialists. Finally, it considers how participants should plan given the inherent uncertainty in the market in terms of regulation, competitor action, and macroeconomic environment.