Eddie Astanin, Chairman of the Executive Board at Russia’s National Settlement Depository, is embracing collaboration to further fintech.
A quiet revolution is taking place in Russia… in financial technology. And it’s being aided and abetted by one of the country’s leading institutions.
Headquartered in Moscow, National Settlement Depository (NSD) acts as the central security depository within the Russian market. The largest in terms of market value of equity and debts held, this non-bank institution also conducts the majority of commercial exchange and over-the-counter (OTC) transactions within the country’s borders. However, it also provides many additional financial services to key market players – and it is here that its chairman sees the biggest potential for growth, most notably through blockchain.
“Alongside our depository services we are engaged in developing new settlement methods, core protection tools, and corporate information processing appliances,” explains chairman of the NSD’s executive board, Eddie Astanin. “IT is hence at the core of our business, and we’re certainly not alone in the Russian market in embracing fintech eagerly.”
Nurturing fintechs
Astanin has long held a front-row seat from which to observe the development of Russian financial services. In his opinion, this is a good time to be a fintech.
“There’s an air of expectations in the environment. The regulators are supportive to new players as they take their first few steps” he says. “For example, Bank of Russia, the main regulator of the Russian financial market, has been hosting its annual special annual forum FINOPOLIS, which is designed to accumulate all of the market participants’ knowledge and experience in one place. It features numerous debates and discussions on the current situation – the challenges, threats and implications of the newest technologies in the banking system.
“Many large financial institutions are also setting up special labs to directly study technological developments and to find new uses for them. They are looking to uncover some new technical solutions and to improve its business in the process.
Fintech is allowing us to form direct, robust connections to customers outside of the Russian market.
“These are the reasons why so many fresh initiatives are popping up every month. Vendors, start-up providers, financial institutions and commercial banks are all organising consortia as a means of combining their R&D to deliver more effective results. Russian companies and regulators have realised potential benefits of these organisations, and have made it their goal to increase collaboration between the country’s institutions in order to maximise the efficiency of Russian fintech research as a whole.”
Collaborative models
NSD itself intends to play an instrumental role in this new, collaborative Russian market and Astanin is proud of the steps that it’s already taken in contributing to the development of fintech research.
“We’re currently providing in co-operation with STRATE (CSD in South Africa) a new workshop aimed at developing DLT in CSD business. We expect around 30 representatives from CSDs and other companies to attend this workshop. We hope, by the end of it, to be able to establish a new consortium to continue our efforts.”
Also within the board of directors of the financial messaging service SWIFT, Astanin visited Silicon Valley in 2016, which inspired him with its fresh ideas and new concepts.
“They’re thinking about solutions for new generations (day after tomorrow) – fresh processes that are going to be implemented on a day-to-day basis. I believe that NSD should be thinking in line with new trends, and that’s why we’re spending our time, money, and resources in finding our own solutions for future market”, he says.
“We already have proof to support some of our concepts, most notably our ideas relating to blockchain technology. We’re not focussing solely upon blockchain – we have simultaneous projects in Clouds, Open Application Programme Interfacing (API) – but we know that this technology undoubtedly works in core protections and that’s why we’re placing such an emphasis upon it.”
Business opportunities
As Russia’s central security depository, NSD is under constant pressure to broaden its provision of services.
“As a trade depository, we receive the greatest service demand from the participants and counterparties of the OTC market,” says Astanin.
”It’s our job to present official, reliable reports on OTC transactions, and we’re certain that blockchain technology can revolutionise this process in terms of the precision of the profiling. It’s yet another area in which the blockchain is delivering a prospective solution and allowing us to potentially add value to our service.”
NSD will be present at Sibos this year and Astanin is expecting to have a particularly busy conference in Geneva.
“We’re participating in three panels. The first will be the regulators’ panel, which will feature the first deputy governor of Bank of Russia. The second panel will present news and information on the infrastructures developing across the BRICS countries, and the third will focus upon standards, namely ISO 20022 and 15022. We’ll certainly be engaging in plenty of discussion on the Russian financial market and we look forward to detailing our achievements and plans for the coming year”.
“That said, the real purpose of the conference, for us, is to share and formulate new ways in which we can utilise fintech for the benefit of our customers. IT is present in every part of NSD’s activity and our goal is to make the transition from being a supporter of business to a provider of business.
“Fintech is allowing us to form direct, robust connections to customers outside of the Russian market and it’s through these relationships that we open the door to new transnational business opportunities.”