Ajay Tyagi, chairman of Indian Securities Market, explored the potential of the security-related markets. He believed that the integration of Blockchain, artificial intelligence (AI) and machine learning can change the dimensions of the security market at the National Institute of Securities (NISM) research conference.
Tyagi went on to explain that the fraudulent activities in the market are increasing on a daily basis because of social media platforms. The regulators are awakened now and realize that a more proper surveillance system can gain from social media platforms.
He said that the surveillance facilities can be enhanced by using tools like Al and blockchain to turn a corner in securities markets. He advocates the use of blockchain fir clearing, settling and keeping records. Tyagi also asked to seek inspiration from blockchain projects around the globe and research in them. Additionally, he said :
“Some foreign exchanges are developing blockchain solutions for the settlement. Active research is needed on these technologies to explore their best possible use in securities markets. Some domestic exchanges are also developing blockchain-based solutions for KYC record-keeping purposes.”
Ajay Tyagi on how to tackle the risks
Any development in the security market can give way to the emergence of newborn risk and periods of depression. Ajay Tyagi gave a prime example of it and talked about Depository Trust and Clearing Corporation (DTCC), who successfully locked down more than $500 billion of Lehman Brothers, in such a way that its balance sheet and clearing fund remained free from any issues. Ajay Tyagi went on to add :
“However, regulators also need to strike a balance between conservative risk management and market development. The high level of security usually comes at the expense of market liquidity”.
Tyagi also noted that new technology can transform how capital market works and boost security markets.