The aim of the Group, which will be overseen by the Financial Conduct Authority and the Bank of England, will be to stocktake current and emerging post-trade technology innovations, identify key pinch points and barriers to adoption across markets and products, and look at the cost and benefits of alternative approaches.

The plans were highlighted by Dave Ramsden, BofE deputy governor for markets and banking at a conference in London.

"The post-trade system is a collection of systems, infrastructures, and workflows that differ across firms, with low levels of interoperability.," Ramsden pointed out. "Many firms operate on legacy post-trade systems and technologies that require a lot of maintenance and upkeep, but are critical for the firm in its daily operations. The current system contains inefficiencies and complexities, with many firms running on systems which were developed in-house by firms during the 80s and the 90s. Many firms have run on the same systems over this time, patching and upgrading, whilst the environment we are operating in has developed, becoming bigger and more complex. There are obvious cost benefits in simplifying."

He points to the work the Bank of England is undertaking to build innovation and resilience within its own operations and in the rebuild of the Chaps high-value payment system.

The central bank is currently engaged in multi-year investment to simplify a complex web of six middle office valuation and operational control systems and over 60 interlinking system exports by introducing a single data management system, known as MOSR.

It is also undertaking a beauty parade of potential vendors to work on the overhaul of the Chaps infrastructure. As well as a well-flagged commitment to move to common ISO20022 message standards, Ramsden revealed that the Bank is also committed to making Legal Entity Identifiers a mandatory component of its financial institution to financial institution Chaps messages.

"Using the same messaging standard across many payment systems will help to facilitate the re-routing of payment messages, reducing the impact of system outages," he says. "This is going to be a transformational change for payments in the UK - the first stage of the cutover for Chaps is planned to occur in 2022. So I encourage any of you engaged in systems or settlement to start considering now the impact on your own systems and operations - both so you can be ready for the change and take advantage of the benefits."

At a firm-wide industry level, the Technology Working Group will bring together different financial market stakeholders to catalyse collective action and reform in the use of technology in the post-trade system.

Says Ramsden: "This may help in identifying a way forward on reducing the cost and inefficiencies in the post-trade processing of financial market transactions, reducing complexity and increasing system-level resilience."