ASX Group, operator of the Australian Securities Exchange, has outlined plans to spend $50 million on technology this year, including the blockchain-inspired replacement for CHESS and a major upgrade of one of its data centres.
The company – which reported a $230.5 million profit after tax in its half year results this morning – is exploring the use of artificial intelligence both internally and as an offering to customers “to drive better decision-making and more efficient outcomes and data analytics initiatives”.
In December, following two years of evaluation the company confirmed it was replacing its decades-old Clearing House Electronic Subregister System (CHESS) with blockchain-inspired distributed ledger technology (DLT) developed by US software firm Digital Asset.
The scope of ‘day one functionality’ for the new system and proposed timing for transition from CHESS will be released in March, with consultation on the transition complete by June.
“It’s an exciting development and we think it will put Australia at the forefront of innovation in financial markets,” ASX CEO Dominic Stevens this morning told a results.
The ASX will spend $20 to $25 million on upgrades to its secondary data centre which it has been using for more than 20 years. The program of work will take around 24 months.
It is a “change made only once in a very long time,” Stevens explained.
ASX is also investing in ASX Net, a managed network for the financial markets community which connects them to liquidity venues, brokerage firms, data vendors and application service providers.
“The quality of ASX’s infrastructure and our capacity to invest allow us to leverage our strengths into new areas to supplement the growth we receive from our core businesses,” Stevens said. “In part, this is driven by the global trends sweeping our industry, including customer demands for reduced complexity, lower costs, and access to more data and analytics. We see these opportunities as complementary to our traditional areas of focus, and requiring ongoing investment in new technology.”
“ASX’s goal is to make business easier for our customers. To do that, we must be technologically out in front,” he added.
The ASX reported growth in users of its Australian Liquidity Centre, which opened in 2012, with customer cabinets from 270 a year ago to 298. Service connections increased to 934 from 907 the same time last year and four new service providers joined the ALC ecosystem, with Stevens pointing out a “viral nature” of growth.
Together with growth in ASX Net users – with service feeds up 14 per cent – technical services revenues rose 13.3 per cent.
Over the coming year, the ASX will seek to improve the availability of its data and continue to grow its integrated ecosystem of 3,000 customers.
The company also hinted at plans to create an ‘Electronic Lodgment Network Operator’ to settle conveyancing transactions. It revealed it was working with InfoTrack, a provider of electronic conveyancing technology and services, to investigate the creation of an ELNO, “and whether we can leverage our existing infrastructure to generate efficiencies for customers,” the company said.