FREMONT, CA: After 5 years of turbulent changes, capital markets are struggling to find a firm ground. 2013 was expected to complete the post-crisis re-regulation and reshaping of capital markets and although regularity clarity increased, developments have not been as fast as expected. However, capital market firms are hopeful as far as 2014 is concerned given that last year's increased regulatory clarity and macroeconomic improvements may pave the way for capital market firms to pause and take stock in 2014.
In this moment of self-assessment and competitive repositioning, there are some priorities that capital market businesses should consider. The most important is addressing the need for better integration and interconnection in functions like risk management, compliance, finance, and technology. Technology is a crucial foundation for most capital market businesses. As such, ensuring that technology is a true enabler rather than a detractor is of utmost importance. Despite this focus, there have been continuous technological failures in a wide range of institutions over the past few years.
Capital market firms’ technology challenges run from vendor management to cyber security, but particularly persistent are a fragmented technology infrastructure and poor technology risk governance. Fragmentation is a major operational challenge whether in the form of poorly connected systems or lack of integrated governance and control structure, and it needs immediate attention.
Along with fragmentation, many expect to see additional attention paid to two areas in technology in 2014 such as building an integrated view of customers, products, and the transaction lifecycle and, leveraging technology for competitive advantage.
It is just a matter of time when one will be able to witness how firms can meet the demands of the marketplace and regulators by undergoing these changes. After years of uncertainty, capital market firms are ready to try a new route by embracing technological enhancement in 2014.