Since 2020, the annual the ISSA (International Securities Services Association) survey “DLT in the Real World” has been providing unique, market-wide perspectives on the DLT and digital asset realisation journey.
This year’s research from ISSA and the ValueExchange, with the support of Accenture, Broadridge, Fnality and Metaco, looks at how and where DLT and digital assets are taking hold in the capital markets today: What the business cases are built on, what challenges practitioners face and where the technology is being used to deliver benefits in 2023.
The survey gained insights from over 350 teams and departments across the capital markets globally and found that there has been a 7% increase in live DLT initiatives, with 75% of DLT and digital asset projects now delivering against expected returns – a marked uplift from 49% in 2022. Among these, returns are most consistent amongst five core asset classes – which look to be ready to scale in 2024 and beyond.
Yet 59% of respondents cite the business case as the biggest challenge in realizing DLT projects, a 10% increase from 2022. As usage grows, the operational benefits of DLT and digital assets are increasingly clear – with 28% of DLT projects being run with cost efficiencies as their key driver in 2023 (above new product revenues). Despite increasing DLT volumes in securities finance and cash funding, only 9% of projects are today driven by potential liquidity and balance sheet improvements – highlighting a major area of opportunity. Possibly linked to this liquidity point, 50% of asset owners see DLT as less relevant to their businesses than the previous year.
Colin Parry, CEO of ISSA commented, “the ISSA DLT Working Group has been at the forefront of the digital asset journey to help the securities industry understand the latest trends and what to expect in the future. We first partnered with the ValueExchange to create an industry survey to track the real world evolution of DLT and digital assets from the perspective of the market. We are very excited to be publishing, for our fourth year running, what has become the one survey that creates the DLT discussion in securities services.”
“These results reflect the maturing of DLT, that industry efforts are stabilising and strengthening year on year,” commented Barnaby Nelson, CEO of the ValueExchange. “We are clearer on which asset classes drive real benefits today and, despite the challenges of 2022, the industry is more committed to the DLT journey than ever. We are also clear on what we need to do now to accelerate the benefits of DLT at scale – driving innovation in digital cash, enabling much more interoperability of platforms and engaging much more actively across our firms as we execute on our DLT projects.”
“Distributed ledger technology is transforming global repo market infrastructure,” said Horacio Barakat, Head of Digital Innovation at Broadridge. “We are empowering leading financial institutions with the ability to dramatically increase liquidity while lowering risk and operating costs.”
Seamus Donoghue, Chief Growth Officer at Metaco added, “Markets will evolve as regulations and standards mature and technology players will play a critical role in providing the foundational networked infrastructure that serves as a catalyst to accelerate this evolution.”
Key findings from this research are available at DLT in the Real World 2023 - Welcome to the ValueExchange (thevx.io)
