Transformation in capital markets demands evolutionary approach, find Celent and Finastra

14 November 2017

New research from Celent (commissioned by Finastra) which examines the future transformation of capital markets, identifies six key drivers of change over the next five years to 2022:

•             Digitalization of the trade and client lifecycle

•             The Fintech revolution

•             The need to integrate with an evolving ecosystem

•             The trend for banks to focus on core capabilities and outsourcing of non-core functions

•             Advances in big data, machine learning and data analytics

•             The rise of open APIs and micro-services in helping banks deliver increased agility

Josephine de Chazournes, Senior Analyst at Celent, will share the key findings of the report at the Finastra Universe conference taking place in London today. Commenting on the research, she explains, “Banks operating in the capital markets arena must continue to transform and evolve their business models. The risk of not doing anything is to be run over by competitors, including new Fintech players. As banks embark on second or third generation transformation initiatives, Celent foresees that long and complex projects will give way to a leaner and more adaptive approach. We see major improvements coming from innovative thinking and agile execution as firms seek to seamlessly integrate new assets and modernize their legacy architecture through open APIs and micro-services.”

The report, The Great Transformation in Capital Markets – Revolution to Evolution’, examines the changes that have already taken place in capital markets since the 2008 crisis, the wave of big transformation projects undertaken since 2011-12 designed to optimize operations and reduce costs, and expected trends in the transformation journey over the next five years. It incorporates the findings of detailed discussions conducted with 17 tier one and two global capital markets institutions, predominantly in the US and Europe but also across Asia and Latin America.

Simon Paris, Deputy CEO at Finastra, says, “Celent’s research underlines some key truths for the industry. While technology has always been important for capital markets firms, it has often been implemented in a fragmented manner, based on the immediate business needs or preferences of the front office, a specific business line or geography. This complexity has been compounded over time by M&A, different sourcing or outsourcing models and in-house development. The result is a highly fragmented architecture that has led to process inefficiencies, high costs and difficulty in adapting to change. Now is an ideal time for banks to review progress and evaluate next steps. Adopting an evolutionary path to transformation will allow banks to benefit from technology developments in cloud, big data and AI technologies, to connect them with Fintechs and integrate new assets with their legacy through open APIs and micro-services. Finastra is uniquely placed to support them on the journey.”

Built on more than 30 years of experience in treasury and capital markets, Finastra offers advanced, agile solutions with unrivalled breadth and depth of coverage. Finastra’s solutions deliver micro-services that integrate with existing systems to extend business capabilities, and achieve cost reductions while capturing immediate benefits at every stage of a transformation project.

Download the full report here.