ASX Focusses Towards Becoming Data Foundation Center for Fintech Companies

ASX Limited’s (ASX: ASX) stock edged down 0.211 per cent with intra-day traded volume of around 97,706 on September 17, 2018. Meanwhile, the Australian Securities Exchange is making efforts towards becoming a global technology pioneer. Chief Operating Officer Tim Hogben stated that the technology improvement program that is underway would turn out to be successful.  He added that ASX is already outperforming the global peers in making its data accessible for customers and startups. Hogben vows to balance the risk with the flexibility, necessary to succeed in the era of newer technologies such as blockchain and Artificial Intelligence.

A report from ASIC following the outage in September 2016 stated that ASX is meeting the global standards in the areas such as uptime and risk management but lags its global peers in following the standard set by the broader financial services sector. Hogben assured that ASX is putting in enough funds to contain the intricacies of its systems. Recent investments include up to $25 Mn for the new secondary data center. The data center would be more like a back and strengthen the exchange. In the longer run, the data center would offer the core infrastructure solutions and data services to the start-up fintech firms. To put his idea clearly, Hogben quoted the statement of Amazon boss Jeff Bezos who stated that the giant retailer was never concerned with building the transport system or a postal system because it was already there. Hogben said that ASX has a similar view and is working towards becoming a foundation infrastructure from which the customers or startups can derive the real-time, reliable and structured data and build services based on it. Among other plans, ASX switched to Blockchain-like distributed ledger technology from Clearing House Electronic Subregister System, popularly known as CHESS. He added that the platform does act as a trading venue but also enhances the value of the data being generated. [optin-monster-shortcode id=”wxhmli4jjedneglg1trq”]

In its annual report, the company stated that they are expecting a rise in the Capital Expenditure of around $20 Mn over the coming year. For FY19, the guidance is for Capex in the range of $70 Mn to $75 Mn. In its quest to plug in advanced technology into its system, the company brought in operations and technology under a single Chief Operating Officer. The company stated that the errors occurring in the CHESS technology are expensive to fix. Further, different participants can have their own databased, meaning that there are multiple versions of software, all doing the same thing. In Distributed Ledger Technology, the participants who connect via ‘node’ are linked via the distributed ledger acting as a chain of title that cannot be altered. Under the new system, the customers will have access to real-time data and assurance that they have the right data without having to ask ASX.

Earlier this month, reports surfaced that Blockchain System rollover data has been delayed. However, Hogben stated that there are absolutely no issues and that the company would deploy the new system and the end of the earlier-decided window. This would give other market participants enough time to prepare.  The new system would be rolled over by March 2021.

The stock traded at $63.875 with the market-cap of circa $12.39 Bn as of September 17, 2018; 3:40 P.M AEST. The company has declared the dividend of AUD 1.09100 with ex-date 6 September 2018 and payment date of 26 September 2018.

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