4 Must-Invest Technologies for European Investment Banking CIOs

4 Must-Invest Technologies for European Investment Banking CIOs

Capital Markets CIO Outlook | Thursday, May 27, 2021

European investment banks prepare for a technology overhaul as new trends mark the arrival of the next era of modernisation.   

FREMONT, CA: The rise of technology is driving key capital market players and investment banks across Europe into exploring the viability of modern capabilities. With new players emerging and traditional models becoming redundant, it is the right time for investment banking firms from the region to try reforming practices with the help of tech-based solutions. The financial ecosystem in Europe is currently favouring companies that are embracing innovative methods as the market responds to many dynamic factors like digitalisation, connectivity and consumer demand. Technology platforms are also offering a range of products that are making it easy for firms to quickly deploy solutions to overcome complex issues in processes ranging from customer management to fraud mitigation. CIOs of investment banking firms can make the most of tech opportunities by considering the following points of advice. 

• Making AI Central to IT Strategy

Investment banking firms are taking to automation rapidly. By focusing on artificial intelligence, CIOs can create a good foundation for automated tasks. Traditionally, human traders were central to capital market firms. Leading companies now prefer replacing the employees and transferring the functions to more efficient trading platforms. Identifying best investment opportunities, devising intelligent strategies and optimising trade deals are becoming easier with software solutions that make use of complex algorithms to crunch data and predict business outcomes with a high degree of accuracy. Machine learning tools are excellent for advisory services that investment banks can use to get real-time market forecasts. By integrating AI into core systems, companies can optimise processes like data collection, analysis and prediction of ROIs, which are critical to any investment banking facility.

• Automating Regulatory Compliance

The regulatory landscape in Europe is complex and dynamic. Capital market firms have to continuously monitor, evaluate and modify in order to stay binding to the regulations. Managing regulations is resource-intensive for most organisations, and investment banks are no different. RegTech companies in the market today are developing technology-based ways to help their clients manage compliance better. It is imperative that investment bank CIOs apply these technologies to ease compliance management woes. From risk reporting to compliance fixes, these platforms can do it all and save a lot of costs and resources. 

• Taking Advantage of Blockchain

Blockchain technology is disruptive in itself, and when applied to the investment banking context, its value only increases. Originally developed as the principal technology behind the first cryptocurrency, today it has assumed diverse functionalities. Technology-oriented investment banking firms should proactively try to run blockchain-based trails and subsequently adopt it. The technology can be used by companies to re-design backend processes for better efficiency, enhancing the security of transactions and reducing the time required for settling deals. The adoption of blockchain is on the rise as firms realise the potential of the distributed ledger technology. Investment banks that lead the implementation of blockchain will enjoy a competitive edge in the near future.

• Driving Security with Optimised Solutions

The imminent danger of fraud and the severe impacts they have on capital market firms is apparent for all investment banking firms. In Europe, many companies have suffered major losses as unethical practices become sophisticated. As businesses prepare to mitigate these risks, technology is bound to play a central role. No matter what the anti-fraud policy of an investment bank is, CIOs must prioritise the inclusion of artificial intelligence and machine learning tools. These technologies take risk monitoring and fraud management to the next level by enabling real-time alerts and automated remedial steps.

As capital markets make a well-paced transformation from legacy systems to modern models, investment bank CIOs can direct the development to lead their companies towards optimisation, productivity and competitive growth with robust technologies to support them. 

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