Fintech: Rewriting the Global Capital Markets

Fintech: Rewriting the Global Capital Markets

Capital Markets CIO Outlook | Friday, July 12, 2019

To generate value, players in the capital markets are moving beyond process replication and reformulating the industry's core design and architecture.

FREMONT, CA: Today, capital market innovation is no longer an alternative for investment banks to survive and flourish in the future, but an absolute imperative. They need to modify the game to support their company in the long term. This will not be achieved by continuing with current operating models, company models, and working methods. So the capital markets of today are on the verge of change. Fintech innovations, like never before, disrupt and re-imagine their functioning. This applies to primary and secondary markets, including equity and bond markets.

Fintech-driven innovation influences essential parts of the value chain of capital markets right from capital procurement to data analytics services. Data and analytics investments contribute to the development of new methods to mine and interpret information to its full potential. While developments in fintech disrupt the retail side, there are still strong entry barriers to capital markets. This opens up opportunities for cooperation between capital market players and emerging fintech innovators to develop an ecosystem that reduces structural expenses, facilitates compliance with legislative modifications, and enhances consumer services.

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The technology landscape is affected by rapid changes in changing client requirements and inner pressures to optimize expenses. Disruption through technological innovation appears imminent in the face of rising difficulties. For example, the perception of technology is evolving in strategic cost reduction. The increasing demand for third-party alternatives, especially about data management and customer focus, leads to fewer, bigger suppliers offering a wider variety of services. Distributed ledgers promise to revolutionize capital markets' key procedures, resulting in more lavish data sets, universal information sources, and distributed documents.

Combined with better client data analytics and regulatory compliance, achieving transactional effectiveness and pace are significant difficulties for today's capital market players. Latest fintech developments are assisting in back-end technology, customer-facing solutions, and middle-end automation,

As fintech players develop not only by adding effectiveness but also by generating value, they will expand capital markets. Capital market players need to adapt their models to work with fintech players to create higher value for the economic ecosystem as a whole.

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