Taking on Legacy Technology in the Capital Markets
Moore’s Law observes that the number of transistors on a microchip doubles every two years, while its cost is halved over the same period of time. It has provided exponential growth in processing power for the past few decades, allowing many applications to improve performance by upgrading the hardware without fundamental architectural changes. (i)
In the decades since Intel co-founder Gordon E. Moore first made this observation in 1965, consumer technology has continued to rapidly innovate, while the technology powering capital markets has lagged behind. Although recent physical limitations have caused improvements related to Moore’s law to taper off, advancements in distributed systems have continued the march of innovation. Much of the capital markets, on the other hand, have not taken advantage of such technological advancements and still operate in the past.
The $924.5 billion U.S. securities industry still relies on mainframe technology from the 1980s. (ii) The result is fragmented systems and interfaces that leave market participants struggling to react to market changes and to meet the needs of data-hungry investors and regulators.
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