While last week’s Barclays-hosted hackathon may have targeted the derivatives sector, many industries including non-financial ones could similarly leverage hackathons. The derivatives industry body ISDA has a
new standard that defines the processes for derivatives transactions such as interest rate swaps and credit default swaps. If the industry adopts this standard using distributed ledger technology (DLT), the efficiencies could potentially save the sector $2.5 billion a year. The
hackathon helped accelerate the adoption path.
Lee Braine from the Chief Technology Office at Barclays explained the thinking behind ISDA’s new standard: “Across the post-trade derivatives industry, there is infrastructure deployed that is too complex for its current purpose, and the proposal is analogous to pressing a technology ‘reset button’ allowing you to go back and radically simplify the nature of that infrastructure.”
Standards
To do that you need standardized data and business processes. So ISDA, with input from several banks, created its Common Domain Model (CDM) published in June. DLT also appeared at a convenient time to help implement this simplification.
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