siliconindia | | June 20178IN MY OPINIONCHALLENGES & OPPORTUNITIES OF TECHNOLOGY INNOVATION FOR FINANCIAL MARKETSBy Rahi Racharla, CIO, Multi Commodity Exchange of India (MCX)Headquartered in Mumbai, Multi Commodity Exchange of India (MCX) is an independent commodity exchange that offers futures trading in bullion, non-ferrous metals, energy, and a number of agricultural commodities such as mentha oil, cardamom, crude palm oil, cotton, and others.E xchanges play an import-ant role in fostering the nation's economic growth by enabling efficient risk management platform to the stakeholders. A holis-tic trading environment should offer participants predictability, integrity, market support and liquidity. Ex-changes in the past have employed a very traditional and conservative approach to business, to the process of making business decisions, and by extension the technology we employ to run the business. Our challenge is to marry the traditional and conservative sector with the innovation culture that is all around us. Technology is enabling the transformation of financial mar-kets, knowledge is becoming glo-balised, access is becoming easier, implementation is becoming cheaper, and technology innovation is fuelling the rate of the change in the financial markets. Digitization is bringing in diverse and large participants from many walks of life, both informed and demanding clients. Not only do we have increasingly better-informed clients but an increasingly more ac-tive regulators. The regulatory rules are welcome at Exchanges; however the costs to be compliant are getting higher and higher. The costs are mea-sured in money and the time devoted to being compliant.I view the technology we operate as underpinning of our brand, the per-ception of our technology affects the perception of our brand. It facilitates and enables our business. If the busi-ness wants to be modern, agile and relevant, then so does the technology we employ. Let the technology be the enabler and not the restrictor. Tech-nology innovation, often led by small independent specialist companies, is a very exciting movement. Technology leaders are adopting more agile working methods and keep an open, investigative mind to technological change and, with this change, new methods of implemen-tation. The over-riding interest is to deliver a blue-chip service hand in hand with front line technology ad-vances. Of course, this is easier said than done. Regulators now demand more from the industry as well, and have started to adopt new technolo-gies that will revolutionise their abili-ty to collect and analyse information. Especially since the financial crash, the global regulators of markets have taken the lessons and looked at how they can avoid the failures of the past. Certainly, areas such as client leverage, market surveillance, price transparency, transaction reporting and KYC are all in clear view. All of Rahi Racharla
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