Technology Trends Previsory: Capital Markets FMI/Post-trade 2024 Edition
Harnessing Technology for Growth
Abstract
As global macroeconomic conditions pose challenges across capital markets, financial market infrastructures (FMIs) are refocusing on return on investment (ROI) when deciding on tech strategy. Placing the right bets to innovate and transform is more important than ever. This requires understanding business cases, workflows, market structure, and regulatory change to leverage technology successfully.
The capital markets industry continues to be affected by numerous disruptive forces, including higher interest rates, continued regulatory change, and geopolitical tensions.
Markets—For FMIs, impacts can be felt in downward trends in new listings/IPOs and in trading executions, a decrease (or “normalization” as some are calling it) in trading volumes and revenues post-pandemic.
Geopolitical— 2024 will see a continuation of a range of uncertainties influencing global markets, including tensions around global elections, wars, global unrest, and climate-change driven natural disasters.
Taken collectively, we expect these factors will continue to weigh heavily on markets in 2024, and participants will continue focusing on regulatory change, systemic risk, and cybersecurity. Efficiency and cost containment are in focus, but our research has found that this is not translating to a reduction in tech spending. Whether spending to save, by modernizing or automating, or by looking to build competitive advantage through new products and services, the rapid changes in and convergence of multiple technologies means tech spend in CM continues to rise.
With organic business growth proving challenging, FMIs are looking for new sources of revenue growth, whether through identifying new client areas or new products to offer. In most cases, technology will be an enabler or catalyst for this growth.
In this report Celent examines how these themes are affecting, and going to affect, sell side businesses in 2024 and beyond. The themes have been identified by the Capital Markets team based on our ongoing research and forward-looking discussions with industry executives. In this report Celent examines how these themes are affecting, and going to affect, FMI businesses in 2024 and beyond. The themes have been identified by the Capital Markets team based on our ongoing research and forward-looking discussions with industry executives. We also highlight the key technologies relevant to each theme.