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Latest Challenges in Capital Markets Trading

Capital Markets CIO Outlook | Wednesday, October 28, 2020

The lack of in-person communication affects client relationships, and technical glitches hinder the flow of work.

Fremont, CA: The initial months of the pandemic have been a complete roller coaster ride for industries across the world, including the financial industry. The world is still trying to combat the socio-economic crisis. Even before the outbreak, some capital market firms were already struggling to adjust to rapid changes in their trading businesses. The whole situation has taken a wrong turn with the onset of this pandemic and brought a new set of challenges for the capital market industry.

Let us have a look at the current challenges for capital markets trading:

Managing Remote Teams

Several pandemic-affected countries declared a country-wide lockdown at the beginning of the outbreak so as to curb the spread of the coronavirus. Many organizations have been forced to operate from remote locations. Most employees are working from home. Likewise, trading organizations find themselves managing high volumes with remote working teams. While this new work arrangement increases employee productivity, protecting sensitive information in a remote world is a new challenge. The lack of in-person communication affects client relationships, and technical glitches hinder the flow of work.

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Facing Lower Revenues

The capital markets firms find themselves scrambling for the latest technologies to improve their business processes. They are now joining hands with fintech companies to overcome prevalent challenges. It is needless to say that these firms are always dealing with an unnerving volume of data. The problem is that they are still struggling when it comes to using the data properly. Data capabilities are sometimes utilized as point solutions rather than as core elements for offering strategic direction to management. However, solving this requires an out-of-the-box approach.

Cutting Costs

Today’s global socio-economic crisis is nothing but the fateful result of the pandemic. It has compelled many organizations to review their financial strategies. Firms need to establish effective communications between remote and in-office employees. The trading floor itself should leverage the latest technologies as well as adopt a suitable physical design to provide a safe, positive experience for workers. Cutting costs is now essential for firms to sustain. However, it is not going to be as simple as it seems. For instance, as the real estate footprint cost may decrease, there is an increase in other real estate costs, such as cleaning partitions, cleaning, and spacing mandates to ensure employees’ safety.