DTCC Public (White) DTCC External (White) Can Financial Markets Infrastructure INNOVATE? Robert Palatnick Chief Technology Architect DTCC

DTCC Public (White) DTCC External (White)

DTCC Public (White) DTCC External (White) OUR REGULATORS

DTCC Public (White) DTCC External (White) Hypothesis: • H 0 : Financial Industry infrastructures cannot innovate

DTCC Public (White) DTCC External (White) Consolidation Automated Scale Functionality Cost Client Experience Competitive Differentiation Cyber Threats IT Strategy Business Drivers Secure Service Oriented Resilient Fast Time to Market Revenue External Disintermediation Regulations Changing Demographics Being replaced by an “app” What drives innovation?

DTCC Public (White) DTCC External (White) DTCC approach to innovation In 7 Slides

DTCC Public (White) DTCC External (White) 1. Do no harm Innovation must align with mission DTCC Mission Statement: To deliver the world's most resilient, secure, and efficient post-trade infrastructure for our clients

DTCC Public (White) DTCC External (White) 2. Organize with Purpose Design an innovation program • Define goals • Define business drivers and/or targets • Define process (lightweight!) • Define success criteria and metrics

DTCC Public (White) DTCC External (White) 3. Create a culture of innovation Embed innovation into the daily life and fabric • Hackathons (trying and failing is ok) • Gamification • Innovation Days • Embrace open source • Socialize

DTCC Public (White) DTCC External (White) 4. Expand the toolbox Add diversity to the perspective, skills and tools • Cloud • Lowdev – sandbox for developers • AI/ML • DLT • Girls who Code • Embrace open source

DTCC Public (White) DTCC External (White) 5. Align motivations Adjust incentives, remove corporate blockers • Provide dedicated funding and resources • Prioritize innovation goals • Celebrate success • Where appropriate, fail fast is success • Either fix, or skip, IT Allocation penalties

DTCC Public (White) DTCC External (White) 6. Quality still matters Engage control functions in the early stages • Innovation does not lower requirements • Security and Automation are prerequisites • Enhance resiliency with Cloud architectures and Chaos testing • Our client is the industry and its regulators

DTCC Public (White) DTCC External (White) 7. Rinse, Repeat Run innovation as a real program • Manage innovation program • Establish and keep milestone dates for review • Re-align to business and technology strategies • Innovation takes perseverance

DTCC Public (White) DTCC External (White) A few Examples of Innovation@DTCC

DTCC Public (White) DTCC External (White) Innovation@DTCC: Enterprise Test Engineering: • Full Stack Automation • API Testing built into DevSecOps Delivery Pipeline • Build Infrastructure validation into pipeline as quality gate • Leverage AI & ML for test effectiveness and efficiency • Test Data Management • Collaboration tools, Chat Bot to knowledgebase API

DTCC Public (White) DTCC External (White) Innovation@DTCC: Thought Leadership for the Industry

DTCC Public (White) DTCC External (White) Quantum Computing Distributed Ledgers Artificial Intelligence Big Data Analytics Enterprise & Data Security ▪ Hardware ▪ Software ▪ Private ▪ Public ▪ Open Source ▪ Smart Contracts ▪ Key Mgmt. ▪ Machine Learning ▪ Deep Learning ▪ Predictive APIs ▪ NLP / Deep NN ▪ Data Collection ▪ Data Science ▪ Visualization ▪ Cyber Security ▪ Biometrics Cloud Computing ▪ Private ▪ Public Crypto Assets ▪ Crypto currency ▪ ICO ▪ Tokenization ▪ Stablecoins ▪ Wallets Robotics ▪ Workforce Automation ▪ Chatbots ▪ Digital Assist ACOE Cloud Council CISO DTCC Organizational Alignment as Fintech Matures Office of FinTech Strategy Application Programming Interface (API) Economy EDAS Developing Nascent Mature Innovation@DTCC: Office of Fintech Strategy • Through research and experimentation, develops a fintech strategy for the organization

DTCC Public (White) DTCC External (White) Revised Hypothesis: • H A : Financial Industry infrastructures cannot innovate are ing

DTCC Public (White) DTCC External (White) Thank You