Fintechs: Powering Capital Markets with Intriguing Opportunities
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Fintechs: Powering Capital Markets with Intriguing Opportunities

By Capital Markets CIO Outlook | Wednesday, July 31, 2019

Fintechs are disrupting traditional practices and adding to capital market value chains with its technology-driven approach.  

FREMONT, CA: The fintech revolution has disrupted many aspects of the capital markets. The innovation-driven fintech industry is making inroads and helping the finance industry re-imagine operations. Increasing sources of capital like crowdsourcing, exchanges, and social investments are enabling fintech companies to have many new opportunities. The traditional capital market and its approach are under gradual change due to the increasing clout of fintechs.

Previously fintech companies were considered as competition for the capital markets. The situation now is a lot different as one can see a lot of collaborations happening. By bringing automation and data analytics into the mainstream, fintechs have successfully created a space for innovation and customer satisfaction. Robotic process automation is providing firms a respite from repetitive tasks. With machines gaining the capability to do the tasks, the tasks become faster, and firms can improve productivity and reduce costs. 

The customer journey has become key to most businesses. Artificial intelligence and others like machine learning and natural language processing are making customer relationships better. Employing chatbots that can have natural conversations, companies are being able to provide unmatched services. A great deal of personalization is an added advantage. The capabilities of data analytics allow companies to use customer data to gain deep insights into their expectations. 

Apart from making customer journey satisfactory, fintechs are using data analytics to enhance decision-making and to understand capital market trends better. Hence, these organizations have been able to influence the value chain. All processes, including those of pre-trade, post-trade, and trade execution, have undergone significant changes. Distributed ledger technology is revolutionizing the core of capital markets by creating distributed records and transparent processes. With the introduction of blockchain, markets have also opened up, enabling the trade of equity shares of startups.

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While transformations are increasing, fintechs have also been able to meet regulatory compliance requirement due to strategic partnerships with capital market players. By creating an ecosystem with significantly lower costs and improved services, fintechs have been able to outpace many big companies. The future will see fintechs mingling in and reshaping capital markets with its fresh approach and technological perspectives.

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