Capital Markets Industry Going Digital! 6 Tech Practices Leading to...

Capital Markets Industry Going Digital! 6 Tech Practices Leading to CIO Success

By Capital Markets CIO Outlook | Wednesday, September 04, 2019

New trends are making inroads into the capital market firms, and CIOs are creating a win-win situation by smartly choosing the right set of technologies that support strategic decision-making to drive business excellence.   

FREMONT, CA: Over the previous few decades, the role of the CIO has dramatically developed to make business-critical decisions, acting as the organization's main nerve center to fuel the development of the company. CIOs concentrate on driving strategic initiatives that promote innovation while managing risk and safety efficiently. Regardless of the size of an organization, the IT strategy of a company must align accordingly and support company objectives to guarantee both operational excellence and return on investment. The CIOs choose to adopt a few techniques here for operational excellence.

Robotics Process Automation (RPA)

RPA in capital market companies replaces manual and legacy systems with automated and modern ones, leads the audit trails and other laws, reconciles the different reports and incorporates middle and back-office procedures as well. RPA procedures are sure to cash effectiveness, simplify procedures, and redefine business models. RPA assists capital market businesses in increasing accuracy, eliminating redundancies and boosting performance hits as well. Smart process automation, which is based on RPA, is a technique coupled with AI(Artificial intelligence).

Increasing information volumes and the challenge of modernizing legacy practices and systems are pushing companies to automate middle-and back-office activities. In some organizations, RPA can also help in increasing the effectiveness of the operation and decreasing expenses by 25 to 50 percent. RPA, helping in onboarding, recognition of income, validation of costs, accounting procedures, operational and monetary reconciliation, and reporting, is poised to become the CIO's best friend and fundamental business enabler.   

Big Data and Analytics 

Huge information is generated every second in the capital market industry, making it critical to store and analyze this data in real-time. A mixture of private and public cloud solves the storage issue at an inexpensive cost as well as challenges in real-time access to this information ocean. Without leveraging technology for analyzing large volumes of data, such an assessment can never be performed. The software can also be used to analyze thousands of social media posts revolving around companies' perceptions, news, and updates, and to make predictions critical to operations and transactions of the capital market firms. These insights can transform the way how institutional and retail investor trade in the market is conducted.


Blockchain has become more critical for capital markets companies. Blockchain can generate smart contracts that support transaction encryption and help in creating distributed documents. Application of This technology ensures transparent use of information in real-time and also makes adequate settlement and processing of transactions. This technology can be used to issue and transfer securities, eliminating the need for settlement and depository functions intermediaries. DLT is considered to be a logical and practical solution for seamless and safe data transmission across the ecosystem of capital markets. Adding effectiveness, blockchain sophisticates post-trade procedures and possibly shortens the payment cycle too.

Migration to the Cloud

Cloud is the main transformation lever as capital market companies balance their IT spending to obtain a competitive edge through regulatory compliance, heritage modernization, and customer experience. It speeds up digital transformation with disruptive designs to satisfy ever-changing regulatory demands, allows quicker financial decision-making, and delivers excellent customer experience. Cloud offers the omnipresent accessibility of a wide range of ever-evolving IT services, delivered safely in consumer-based designs up to a hyper-scale.  

Data Protection 

The General Data Protection Regulation (GDPR) is also a crucial factor that many capital market companies need to consider. To comply with the laws, capital markets companies will need to invest in data protection and management technology. At the core of GDPR is the need to comprehend the entire data structure and information workflow within an organization that offers software for post-trade securities and derivatives processing.

AI  for Smarter Decision-Making

In capital markets, AI is set to take off, mainly because it increases profitability. As per Goldman Sachs, machine learning and artificial intelligence will allow an annual "cost savings and fresh income possibilities" of $34 billion to $43 billion within the financial industry by 2025. When evaluating a private equity manager, most investors look at a variety of variables, such as the investment track record of the manager and team experience. However, for each variable, such assessments are often carried out in isolation, with endless choices being made based on professional judgment. To guarantee the highest results, some investors are beginning to use AI to evaluate private equity products, drawing on a spectrum of qualitative and quantitative factors to estimate the chances of attaining higher risk-adjusted yields. A handful of private equity investors are using AI to select safety, mostly in the venture capital sector. Companies also use processing of natural language and chatbots to transform how they communicate with clients.  

While CIOs proceed to evaluate how the value of the IT infrastructure across the sector can be optimized and further enhanced, high-tech aids help in refurbishing the capital markets industry. With a cooperative strategy, the step towards embracing and employing transformative technology will further improve their capacity to harness innovation to its full potential while driving ongoing improvements across organizations and industry.

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