The Capital Markets Bank of the future will be technology enabled. Innovation in Capital Markets is an imperative to help firms survive in the short term, to streamline where needed, and to thrive looking further forward. Existing operating models and continued use of legacy technologies will not help firms sustain their businesses in the long term.
Together with the Association for Financial Markets in Europe (AFME) we carried out research and interviewed with representative banks of AFME’s Technology and Operations Committee, and supplemented this with input from our PwC SMEs. As a result of this research, the report sets out our shared understanding of the emerging technology trends and priority areas for investment, the emerging barriers to change, and a vision for the ‘Investment Bank of the Future’.
The report, Technology and Innovation in Europe’s Capital Markets highlights the need for the industry to embrace innovative technologies quickly to remain competitive, as technology remains one of the biggest opportunities to address industry challenges and drive future growth. The report also highlights four technologies with the potential to drive this transformation and create Investment Banks which are automated, data-led, open and agile.
Data and Analytics
Data and analytics is seen as a key enabler to the future adoption of innovation and technology change in the Capital Markets sector. While there has been an increased focus on data over the last ten years, primarily as a result of increased regulation, there are varying levels of adoption in the Capital Markets sector.
Cloud Computing
Cloud computing is seen as a key priority which underpins the ability to implement new technologies and to quickly process large amounts of data. However there is a divergence between those that are investing heavily in cloud adoption and those who are doing very little in this space.
Artificial Intelligence (AI)
Artificial Intelligence (AI) is expected to develop rapidly across multiple banks functions. As data and information density grows beyond what can be consumed and understood by human centered processes, the need for machine learning and ‘AI’ technologies grows.
Distributed Ledger Technology (DLT)
DLT is disrupting the financial services industry at speed as organisations explore multiple business applications, from digital currencies and assets, to settlement, trade finance, digital identity and smart contracting. However large scale or industry-wide use is still seen as a long-term (5 year+) and ambitious objective.
Robotic Process Automation (RPA)
Robotics Process Automation (RPA) or Intelligent Automation (IA) was identified as an additional technology that, although is currently used mostly for tactical remediation and remains cost-effective, it is expected to receive significant investment and be used for more strategic process efficiency improvement initiatives in the future.
