Top Ten Trends in Capital Markets 2017

Capital Markets Trends for 2017

2Copyright © Capgemini 2016. All Rights Reserved

Presentation Title | Date | Financial Services

Capital Markets Trends 2017

Capital Markets Trends

Driving client experience is becoming a critical element for firms to sustain and grow their business

Pricing models for research are being unbundled to comply with transparency requirements

Firms are adopting RPA, not only to reduce cost but also as a means of competitive advantage

Cloud-based solutions continue to gain more usage in capital markets

FinTech startups are increasingly specializing in specific part of regulations and collaborating with incumbents

Investment banks are focusing on simplification and redefining their business models

Collateral management is witnessing increased focus from market participants

Data management and analytics is evolving into a strategic function and becoming a critical element for firms

Blockchain technology is expected to change the way data is managed in capital markets

Cybersecurity continues to be a focus area for firms as digitization is increasing risk exposure



Stricter Regulatory Supervision

Tighter Liquidity and Capital Requirements

Investment banks are focusing on simplification and redefining their business models

Encroaching Competition

Industry is shifting towards advisory and underwriting

functions that provide higher margins

Technology investments to gather pace as investment

banks initiate agile technology platforms

Source: Capgemini Financial Services Analysis, 2016



Increase in tech-literacy

Driving client experience is becoming a critical and essential element for firms to sustain and

grow their business

Possible erosion of market share of the incumbents

The future of products and service is expected to shift to a client-centric one from the

current product-centric approach




Regulatory Compliance towards Transparency

Mitigation of Credit / Operational Risks

Collateral management is witnessing increased focus from market participants and they are

coming up with integrated offerings

Resiliency against Market Stress

Solutions Focus

Centralization

Greater Automation

Collateral Optimization




Source: Capgemini Financial Services Analysis, 2016; “New regs weaken research trading link”, Bloomberg Trading Solutions, August 15, 2016 accessed October 2016 at https://www.bloomberg.com/trading-solutions/blog/new-regs-weaken-research-trading-link/

Current regulations require fund managers to create separate transparent research payment accounts

Investors are increasingly looking for transparency in pricing of investment products

Pricing models for research are being unbundled to comply with accurate and comprehensive

transparency requirements

€1.7 billion a year

Transformation of research function could cost research providers a huge amount of money in commissions in Europe



Data management and analytics is evolving into a strategic function and becoming an increasingly

critical element for capital markets firms

Regulatory Pressures

Risk Management

Changing Business Requirements

Cost Rationalization

Data Integration and Data Quality




Cost Reduction

Higher Accuracy and Quality

Capital market firms are increasingly adopting Robotic Process Automation, not only to reduce

cost but also as a means of competitive advantage

Reduced Human Error

Better Speed

Advanced Analytics

Regulatory Compliance




Ledger Consolidation

Faster Clearing and Settlement

Blockchain technology is expected to change the way data is managed in capital markets

Lowering in Systemic Risk

Enables firms to work on common datasets, in real-time, and with minimal

supporting operations, which will entail a simplified, cost-efficient,

transparent, and robust system for all market participants

Mid- and Back-Office Efficiency




Cost savings on IT Infrastructure

Client demand for more cost effective, agile, standardized,

and secure services

Cloud-based solutions continue to gain more usage in capital markets

Helps turn IT related capital expense into usage based

operational expense




Cybersecurity continues to be a focus area for capital market firms as digitization of various parts

of the value chain is increasing risk exposure

$4.0 million

Average cost of data breach incident in 2016

Damage to Brand and Reputation

Legal Suits and

Investigation

Decline in Clients’ Trust

and Confidence

Loss due to Heavy

Penalties

Source: Capgemini Financial Services Analysis, 2016; “2016 Ponemon Institute Cost of a Data Breach Study”, larry Ponemon, Security Intelligence, June 15, 2016 accessed October 2016 at https://securityintelligence.com/media/2016-cost-data-breach-study/



FinTech startups are increasingly specializing in specific part of regulations and collaborating with

incumbents

Risk data aggregation

Trading in financial markets

Modeling, scenario analysis, and forecasting


The information contained in this presentation is proprietary.© 2015 Capgemini. All rights reserved.

www.capgemini.com

About Capgemini

Now with 180,000 people in over 40 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2015 global revenues of EUR 11.9 billion.Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.

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Economy & Finance

Top Ten Trends in Capital Markets 2017