Capital markets and banking- 2015 trends

2014 saw four distinct trends… 2015 will see a host more.

Big data management and analytics topped the list of challenges faced by clients in 2014. We expect it to become more complex with the rising magnitude of data year on year. Organisations have realised this and are building and enhancing data management capabilities. The insights from data are helping balance the conflicting pressures around risk, regulatory, capital, and changing client requirements.

2.            The second trend is the increased exploration of alternative service delivery models by selling and buying side firms. The shift was observed in IT and is used as a strategic tool to build a sustainable foundation for future business potential. This is being done through restructuring IT outsourcing and using alternate and more successful service delivery models like cloud.

3.            Regulations challenges have been omnipresent. BASEL III was a key area of investment in 2014. The stringent requirements for ensuring capital adequacy resulted in increased pressure on firms.

4.            Organisations are embracing the development of an organisation-wide risk governance model. Other regulations aimed at ensuring transparency, investor confidence and systemic risk control ended up being growth drivers for the industry. 

Looking forward, we expect the following trends in 2015.

1.            Regulatory compliance will continue to attract top spend globally. Financial institutions will invest in specialised and prebuilt testing frameworks and accelerators to ensure their compliance systems are reliable and resilient. EMIR will draw big investments in UK and EUROPE and LEI would become a global initiative.

2.            Analytics for value-added risk management.

Analytics and Data governance will be a core focus area in treasury functions, and is expected to be a vital agent of change, for firms to realign their business models while managing risk efficiently.

3.            Digitisation of superannuation industry.

Struggles to reach out to the tech-savvy Gen X and Y customers, allows for substantial investment in the area of enhancing member interaction through digital channels, with a focus on enhancing customer engagement through gamification, social media and mobile apps.

4.            Renovation of trading technology and infrastructure.

Legacy systems are likely to face challenges arising out of the exponential increase in data volumes, changes in regulations and inability to support mobile first strategy. Organisations will shift from a traditional approach and transform their core systems.

5.            More investment in client facing functions.

Banks have realised that maintaining close customer relationships will be key to long-term success. With a focus on clients, spending on the front office and client-servicing functions may increase. Investment in technologies that enable relationship managers to have more face time with clients through digital channels, give them fuller visibility of and access to trading/investment/payment information as well as supporting tools (e.g. portfolio management, next best action etc.) is likely.

With rapid advancements and shifts witnessed within the financial industry in 2014, the upcoming year will witness a growth in business innovation.