SFS: Saudi is a ‘blank sheet of paper’ for development
02 May 2025 Saudi Arabia
Image: SFT
The market plays host to extremely advanced technologies, however participants see evidence of archaic technology that is still in play today.
To this, Andrew Geggus, global head of agency lending at BNP Paribas, asked: “What can we do as an industry to embrace new technologies and make the market more efficient, but also understand the limitations of what we can actually do?”
The ‘Global Trends in Securities Finance Technology’ session took place in Riyad, Saudi Arabia at the first ever Middle East Securities Finance Symposium.
Panellists explored how fintech, blockchain, and automation are revolutionising securities finance worldwide. Speakers also examined practical applications and how regional centres like Saudi Arabia are pioneering technological integration.
During the session, Geggus emphasised resource challenges that all firms face, from a business perspective, on what companies can allocate to advancing technology.
To this, he suggested focusing on return investment and how much it will cost firms to achieve their end goal. For example, Geggus is already seeing AI being used in the market, such as bots that automatically do locates for firms. He added: “Trading automation has increased over the last few years, but I still see some back office processes that are using Excel.”
In terms of AI, there are three different sets of organisation types involved: large banks which have money assigned to AI at the top of house level; fintech providers which invest in AI across different toolsets as part of an overall technology innovation strategy, which benefits firms at a mid-tier and top-tier level; and there are the lower-tier firms, which have smaller budgets to use to invest in this technology.
When speaking on the lower-tier firms, Darren Crowther, head of global securities finance and collateral management solutions at Broadridge, said: “The only way that smaller firms are really going to get benefits from AI from securities finance, is to wait for technology providers to provide it as a service. So very much a waterfall effect, because it's so expensive to invest and fail — 8 out of 10 AI trials fail.”
Similarly, David Lewis, senior director, securities finance at FIS, commented: “We can go as fast, or faster, than the market can. The market is a collection of very different organisations doing different things at different times, at different places, with different budgets and different expectations.”
Focusing on the development of the Middle East, Lewis describes Saudi Arabia as a “blank sheet of paper” opportunity.
He explained: “It's about best practice here and molding this blank sheet of paper that you guys have in this region, particularly in Saudi Arabia, which has the potential to write its own best practices. Start with the latest technology, not with legacy, not having to rebuild, readjust, reframe.”
For Dimitri Arlando, head of sales EMEA at EquiLend, this region has adopted technology “really well and really fast”, partly because it is a “blank sheet of paper” to start with.
“The issue with AI and machine learning is that possibilities are endless,” he continued. “So how do you actually focus on real-world problems? And how can you use AI and machine learning to help solve those real-world problems?”
While this ‘blank sheet’ analogy proves to be positive in many panellists’ eyes, Geggus believes there needs to be a balance between these “great ideas” and a “blue sky” thinking, with the reality of the market.
“While you want to run ahead at full speed, have a blank sheet of paper to build something new, there's still going to be elements that people have to be aware of. In terms of hurdles, it's purely dealing with an infrastructure where there is a lack of standardisation,” he added.
If a market standard can be met, alongside some form of standardisation, Geggus said this will help with the level of market efficiency.
He explored: “But in reality, there isn’t standardisation, and that's come through to technology as well. So we have to be aware that there are different technology levels across all firms and, to be an efficient market, we have to try and figure out how we can work together in the most seamless way — to do so, it's interoperability.”
Lewis commented that there is an opportunity here not to succumb to some of those legacy system issues. While interoperability is needed, there are a lot of the pain points that other markets have been through, such as fee breaks, rates, and reconciliation engines.
“We're not going to solve everything with that blank sheet of paper, because you do have to have these legacy connections,” he noted. “But the ability to clear away some of the friction, some of the costs, some of the lack of efficiency in the market, I think is huge.”
Crowther suggested that firms should work to create “some kind of data ontology”. He explained: “Inside your own organisations, you have hundreds of legacy systems as well. So how can you standardise an API down to those platforms? A single source and common data ontology gives you more capability.
“Creating some kind of data ontology where they can communicate over the APIs is undoubtedly the best way.”
Lewis agreed with Crowther, observing that: “Competition is great. Interoperability is reality.”
Providing a Saudi Arabia perspective on technology in the Middle East, Abdullah Alghamedi, section head of securities services at SNB Capital, highlighted the importance of technology for the country. However, he indicated that there are “many options for systems” and so “the complexity around securities lending may seem challenging”.
In his eyes, the market needs education for the local participants to understand: what the different systems are and how participants can benefit from these systems to grow their business and provide more scalability.
“We see a system for collateral management, a system for post-trade and trading platforms — having these different systems could be confusing for a market that didn't have these capabilities just three years ago. So we need to have some sort of education on the business cases of these systems for the local markets,” he added.
Rounding off the discussion, Geggus highlighted that “every single year” the market sees the appearance of more vendors and technology solutions. And while this is a “fantastic thing”, the industry does not have unlimited resources to onboard “every single bit of technology”.
In the end, value of investment is key. He concludes: “We've been in a bit of a flux over the last 10 years, where there's been more platforms coming forward, there's been more investment into technology, and I think that will carry on. But at the same time, there'll be more scrutiny looking at the analysis of the return on investment of these technology solutions.”
To this, Andrew Geggus, global head of agency lending at BNP Paribas, asked: “What can we do as an industry to embrace new technologies and make the market more efficient, but also understand the limitations of what we can actually do?”
The ‘Global Trends in Securities Finance Technology’ session took place in Riyad, Saudi Arabia at the first ever Middle East Securities Finance Symposium.
Panellists explored how fintech, blockchain, and automation are revolutionising securities finance worldwide. Speakers also examined practical applications and how regional centres like Saudi Arabia are pioneering technological integration.
During the session, Geggus emphasised resource challenges that all firms face, from a business perspective, on what companies can allocate to advancing technology.
To this, he suggested focusing on return investment and how much it will cost firms to achieve their end goal. For example, Geggus is already seeing AI being used in the market, such as bots that automatically do locates for firms. He added: “Trading automation has increased over the last few years, but I still see some back office processes that are using Excel.”
In terms of AI, there are three different sets of organisation types involved: large banks which have money assigned to AI at the top of house level; fintech providers which invest in AI across different toolsets as part of an overall technology innovation strategy, which benefits firms at a mid-tier and top-tier level; and there are the lower-tier firms, which have smaller budgets to use to invest in this technology.
When speaking on the lower-tier firms, Darren Crowther, head of global securities finance and collateral management solutions at Broadridge, said: “The only way that smaller firms are really going to get benefits from AI from securities finance, is to wait for technology providers to provide it as a service. So very much a waterfall effect, because it's so expensive to invest and fail — 8 out of 10 AI trials fail.”
Similarly, David Lewis, senior director, securities finance at FIS, commented: “We can go as fast, or faster, than the market can. The market is a collection of very different organisations doing different things at different times, at different places, with different budgets and different expectations.”
Focusing on the development of the Middle East, Lewis describes Saudi Arabia as a “blank sheet of paper” opportunity.
He explained: “It's about best practice here and molding this blank sheet of paper that you guys have in this region, particularly in Saudi Arabia, which has the potential to write its own best practices. Start with the latest technology, not with legacy, not having to rebuild, readjust, reframe.”
For Dimitri Arlando, head of sales EMEA at EquiLend, this region has adopted technology “really well and really fast”, partly because it is a “blank sheet of paper” to start with.
“The issue with AI and machine learning is that possibilities are endless,” he continued. “So how do you actually focus on real-world problems? And how can you use AI and machine learning to help solve those real-world problems?”
While this ‘blank sheet’ analogy proves to be positive in many panellists’ eyes, Geggus believes there needs to be a balance between these “great ideas” and a “blue sky” thinking, with the reality of the market.
“While you want to run ahead at full speed, have a blank sheet of paper to build something new, there's still going to be elements that people have to be aware of. In terms of hurdles, it's purely dealing with an infrastructure where there is a lack of standardisation,” he added.
If a market standard can be met, alongside some form of standardisation, Geggus said this will help with the level of market efficiency.
He explored: “But in reality, there isn’t standardisation, and that's come through to technology as well. So we have to be aware that there are different technology levels across all firms and, to be an efficient market, we have to try and figure out how we can work together in the most seamless way — to do so, it's interoperability.”
Lewis commented that there is an opportunity here not to succumb to some of those legacy system issues. While interoperability is needed, there are a lot of the pain points that other markets have been through, such as fee breaks, rates, and reconciliation engines.
“We're not going to solve everything with that blank sheet of paper, because you do have to have these legacy connections,” he noted. “But the ability to clear away some of the friction, some of the costs, some of the lack of efficiency in the market, I think is huge.”
Crowther suggested that firms should work to create “some kind of data ontology”. He explained: “Inside your own organisations, you have hundreds of legacy systems as well. So how can you standardise an API down to those platforms? A single source and common data ontology gives you more capability.
“Creating some kind of data ontology where they can communicate over the APIs is undoubtedly the best way.”
Lewis agreed with Crowther, observing that: “Competition is great. Interoperability is reality.”
Providing a Saudi Arabia perspective on technology in the Middle East, Abdullah Alghamedi, section head of securities services at SNB Capital, highlighted the importance of technology for the country. However, he indicated that there are “many options for systems” and so “the complexity around securities lending may seem challenging”.
In his eyes, the market needs education for the local participants to understand: what the different systems are and how participants can benefit from these systems to grow their business and provide more scalability.
“We see a system for collateral management, a system for post-trade and trading platforms — having these different systems could be confusing for a market that didn't have these capabilities just three years ago. So we need to have some sort of education on the business cases of these systems for the local markets,” he added.
Rounding off the discussion, Geggus highlighted that “every single year” the market sees the appearance of more vendors and technology solutions. And while this is a “fantastic thing”, the industry does not have unlimited resources to onboard “every single bit of technology”.
In the end, value of investment is key. He concludes: “We've been in a bit of a flux over the last 10 years, where there's been more platforms coming forward, there's been more investment into technology, and I think that will carry on. But at the same time, there'll be more scrutiny looking at the analysis of the return on investment of these technology solutions.”
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