10 Radical Predictions for 2020

There is a long tradition of making predictions for the New Year, and the truth is that most of the time the items on such lists are anodyne suggestions that seldom stray far from current reality or show much imagination for the bold actions that can really shake the world. The reason for that is simple, of course: people hate to be wrong, and the easiest way to be wrong is to take a real chance. Here at Eventus, we don’t mind stepping out from orthodoxy from time and time so with that sentiment we offer ten somewhat radical predictions for the coming year.

1. When it comes to regulation, the FX market has generally not been interested. The past several years have witnessed numerous issues, and the industry countered with the FX Code of Conduct. Global regulators do not believe this goes far enough, however, and we predict that FX will be under a universal regulatory regime by the end of 2020.
2. Market participants hate uncertainty, and uncertainty in many, many forms has been a hindrance in the development of digital assets. The demand for clarity is great, and we believe that crypto regulation will become crystal clear.
3. The popular saying is that a cat has nine lives.  In the U.S. the CAT - or Consolidated Audit Trail -  is about to use its ninth, and last, life. In the face of a landscape rapidly shifting to protect user data, we’ll be saying that “security concerns killed the CAT”.
4. The world is ever more complicated, and the current balkanization of regulation in the United States makes it impossible for regulators to cover the landscape, much less keep pace with change. For this reason, it will become obvious to all that the SEC and CFTC need to merge. It may take more than a year to do so, but the die will be cast in 2020.
5. The ascendance of high-speed and algorithmic trading has made life difficult for many traditional market participants, and one response has been the introduction of “speed bumps”. These rules and structures attempt to level the playing field, but the results are at best inconclusive. For this reason, speed bumps will be a passing fad and fade into obscurity in 2020. 
6. The introduction of zero-commission trading schemes has roiled the U.S. equity markets, and there’s no reason to believe that the trend won’t continue. In fact, all major asset classes will adopt a zero commission structure in the coming year.
7. There have been rumblings about the ascendance of tech companies into the financial sphere, and 2020 is the year in which those predictions will come to pass as Amazon becomes the fifth largest bank in the United States.
8. Conventional wisdom holds that AI and ML will be job killers, but the facts on the ground indicate just the opposite: these new technologies create more questions than they answer. For that reason, hiring for traditional roles will increase to handle the additional workload.
9. The creation of new regulation generally proceeds at a snail's pace, but there are times when the stars align and things move quickly. In 2020, because of Brexit, Europe will expeditiously pass MiFID III that wipes out a lot of MiFID II, and total chaos will ensue.  
10. Few doubt that Asia will be the financial growth engine of the future, but 2019 saw HKEX stymied in its effort to merge with London-based LSEG. As a result, the exchange will look closer to home and merge with SGX to create a regional powerhouse that will be poised to take on the world.

It is difficult to make predictions, especially about the future.~ Karl Kristian Steincke~

Will any of these come to pass?

The business of predictions is a tricky one: obvious choices (the sun will come up tomorrow) have little value, and wild ones (humans will soon be living on Mars) are more humorous than insightful. The value in making bold predictions like those that we have listed above isn’t so much about trying to be correct about outcomes as it is to highlight areas and topics of special importance and then imagine ways in which they might be addressed. We’re not likely to see any of our ten predictions come true in the year ahead, but you can be certain that all of the areas that we’ve touched upon will be in the news. 

Then again, it sometimes takes many years for a prediction to come true. Consider the case of an article published in The Independent, a British new organization, in 1997, which wrote that in 2020, Boris Johnson would “renegotiate EU membership so Britain stands to Europe as Canada, not Texas, stands to the USA”. Sounds a bit like Brexit, doesn’t it? 

We may not prove to be as prescient as The Independent, but time will obviously tell on our predictions!

In any case, we at Eventus look forward to serving your needs throughout 2020 and the decade ahead. We wish you a very happy new year.

Eventus Systems, Inc. offers a multi-award winning global trade surveillance and market risk platform.  Available as a cloud-based or real-time enterprise on-premise solution, the Validus platform provides sophisticated market surveillance and financial risk capabilities, enabling clients to solve some of the most pressing regulatory challenges. For more information, contact us at info@eventussytems.com

For a more conventional look at regulatory developments and trends, please read our blog: End of the Tens - What the Last Decade Taught Us About Trading Surveillance and Compliance.