Australian Securities Exchange looks to artificial intelligence and big data analytics

In delivering its first-half AU$230.5 million after-tax profit, the ASX unveiled a number of tech-based projects it has in the pipeline aimed at making business easier for ASX-listed companies, as well as for its own internal processes.
Written by Asha Barbaschow, Contributor

The Australian Securities Exchange (ASX) has published its financial results for the first half of 2018, reporting AU$230.5 million in after-tax profit, an increase of AU$11.1 million year over year.

The exchange reported an AU$11.1 million revenue increase over the first half of the year to AU$409 million, also raising AU$44.8 million in capital during the period.

In its financial report, the ASX highlighted the "growing importance" of the "multi-dimensional ecosystem" it is building out, aimed at making business easier for ASX-listed companies, as well as for its own internal processes.

It cited global "drivers of change" as part of its plan to build-out a new technology ecosystem. These were listed by the exchange as the increase in computing power/speed; the costs of storage and processing; the rise of big data and cloud; artificial intelligence and machine learning; and distributed ledger technology (DLT).

"We see these opportunities as complementary to our traditional areas of focus and requiring ongoing investment in new technology," ASX CEO and managing director Dominic Stevens said. "ASX's goal is to make business easier for our customers. To do that, we must be technologically out in front."

The company said the tech-based drivers have led to a demand for information that is an ultimate source of truth, real-time, data-rich and easily searched and filtered, readily accessible and delivered seamlessly, produced at scale, and capable of having an analytic layer added with ease.

To cope, the ASX announced plans to upgrade a secondary datacentre, upgrade its ASX Net communications strategy, and develop a cloud strategy.

The datacentre upgrade is expected to take two to three years and cost around AU$20 million to AU$25 million.

The ASX announced in December that US-based blockchain firm Digital Asset would be responsible for replacing its Clearing House Electronic Subregister System (CHESS) with a distributed ledger solution.

The previous CHESS system -- which dates back to the 1990s -- is used by the ASX to record shareholdings and manage the clearing and settlement of equity transactions publicly listed in Australia.

The ASX said previously the decision to choose Digital Asset follows the successful build of enterprise-grade DLT software for core equity clearing and settlement functions, as well as the completion of testing over the past two years by both parties.

Stevens said the organisation's decision to replace CHESS with a post-trade platform using DLT is an example of being technologically out in front.

"After extensive testing and stakeholder consultation, we are confident that DLT will meet the needs of Australia's financial marketplace for improved functionality and efficiency, and maintain the highest regulatory and operational standards," he added.

"It's an exciting development and we think it will put Australia at the forefront of innovation in financial markets."

The chief said day one functionality is slated for the end of March.

The exchange also went live with its new futures trading platform last year, which it said allows for low latency, better risk management, as well as for a better -- and faster -- response to customer problems.

The ASX also noted that it had realised current development opportunities during the half-year in building a big data analytical environment and producing a broader range of ASX datasets, in addition to its DLT capabilities.

It revealed that it was in the early stages of an "exciting" opportunity to determine whether artificial intelligence can provide efficiencies to internal ASX processes. Similarly, analytics to sit on top of the big data platform is also being looked into, as well as analytics to give greater insight to Austraclear data.

Another growth initiative Stevens highlighted is electronic property settlement.

The ASX is working with InfoTrack, an Australian provider of electronic conveyancing technology and services, to investigate creating an Electronic Lodgement Network Operator (ELNO) and whether it can use its existing infrastructure to build such a solution out.

During the six-month period, the ASX said it also attracted new technology and foreign company listings, with public tech companies growing 140 percent since 2014.

In the six months to December 31, 2017, 77 new companies joined the exchange; 11 of those were tech firms and 18 were international businesses.

For the 2017 financial year, the exchange reported AU$434.1 million in after-tax profit.


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