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Top Trends in Capital Markets: 2020

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A host of regulatory changes were introduced globally in 2019 to push greater transparency in the capital markets industry. These new and beefed-up regulations are forcing capital markets to innovate and undertake initiatives to ensure cost-effective and efficient compliance. Capital market firms are moving to data-driven compliance to confirm standards in the use, distribution, and protection of valuable customer information. Customer engagement and satisfaction have been a burning issue for the industry for quite some time. Within today’s competitive landscape, the pressure to improve customer service is palpable. Therefore, capital market participants are adopting artificial intelligence (AI) to power intelligent solutions that can streamline and optimize operational processes. Firms are generating insights to help anticipate individual customer needs and to bolster satisfaction. In-depth customer insights — generated through the analysis of vast amounts of data — will enable product development that delivers robust and relevant value propositions.

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Top Trends in Capital Markets: 2020

  1. 1. Top Trends in Capital Markets: 2020 November 2019 Link: https://www.capgemini.com/top-trends-in- 2020/
  2. 2. 2© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Top Trends in Capital Markets for 2020 by Capgemini Artificial intelligence to enhance pricing decisions in bond securities trading Capital markets firms leverage blockchain technology to enhance data transparency Digital securities – a new generation of assets Robotic process automation simplifies client onboarding Intelligent solution Quantamental investing: New buy-side trend is gaining ground Common domain model aims to standardize derivatives trading and management Capital markets set to transition away from London Interbank Offered Rate Data driven compliance Machine learning will boost automation in capital markets Deep customer insights 01 02 03 04 05 06 07 08
  3. 3. 3© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Source: Capgemini Financial Services Analysis, 2019 1 Illiquidity can substantially impact yield spreads, which significantly widen during times of market volatility Market liquidity is low1 Unique legal and financial complexity Legacy methods Regulatory changes Lack of centralized data Capital market firms will leverage AI predictive analytics for better pricing and liquidity in the market 3© Capgemini 2019. All rights reserved | Trend 1: Artificial intelligence will enhance pricing decisions in bond securities trading Top Trends in Capital Markets for 2020 by Capgemini Deep Customer Insights Intelligent Solution Data- Driven Compliance
  4. 4. 4© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Open and permission-less network Secure and tamperproof Transparent and public data Source: Capgemini Financial Services Analysis, 2019 4© Capgemini 2019. All rights reserved | Deep Customer Insights Intelligent Solution Data- Driven Compliance Top Trends in Capital Markets for 2020 by Capgemini Trend 2: Capital markets firms leverage blockchain technology to enhance data transparency
  5. 5. 5© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Source: Capgemini Financial Services Analysis, 2019 Low ticket size Automation Can be coded for compliance Simplified governance 24/7 access Cost- effective and transparent 5© Capgemini 2019. All rights reserved | Deep Customer Insights Intelligent Solution Data- Driven Compliance Top Trends in Capital Markets for 2020 by Capgemini Trend 3: Digital securities – a new generation of assets
  6. 6. 6© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Regulatory compliance Customer support and service KYC process Request processing Source: Capgemini Financial Services Analysis, 2019 6© Capgemini 2019. All rights reserved | Capital market firms are leveraging RPA in client onboarding processes with an eye on improved customer satisfaction and increased revenue Deep Customer Insights Intelligent Solution Data- Driven Compliance Top Trends in Capital Market for 2020 by Capgemini Trend 4: Robotic process automation simplifies client onboarding
  7. 7. 7© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Human insight and wisdom Proactive reaction to market conditions Risk Management Consistent investment returns Source: Capgemini Financial Services Analysis, 2019 Deep Customer Insights Intelligent Solution Data- Driven Compliance Top Trends in Capital Markets for 2020 by Capgemini Trend 5: Quantamental investing: New buy-side trend is gaining ground
  8. 8. 8© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Boosts process effectiveness Meets regulatory compliance Encourages transparency Reduces operation cost Source: Capgemini Financial Services Analysis, 2019 8© Capgemini 2019. All rights reserved | The common domain model creates a universal blueprint for greater automation and efficiency in derivatives trade events and processes Top Trends in Capital Markets for 2020 by Capgemini Deep Customer Insights Intelligent Solution Data- Driven Compliance Trend 6: Common domain model aims to standardize derivatives trading and management
  9. 9. 9© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Renegotiations to reduce exposure based on impact analysis Impact assessment of exposure to LIBOR and review of existing contracts Identify the alternative benchmark rate along with changes required in technology infrastructure Source: Capgemini Financial Services Analysis, 2019; The World Bank, “World Bank Launches Market’s First SSA Secured Overnight Financing Rate (SOFR) Bond,” August 14, 2018, https://www.worldbank.org/en/news/press- release/2018/08/14/world-bank-launches-markets-first-ssa-secured-overnight-financing-ratesofr-bond US$ 1 billion The World Bank priced its first SOFR-linked bond in August 2018, raising US$1 billion from investors in the Americas and Europe 9© Capgemini 2019. All rights reserved | Top Trends in Capital Markets for 2020 by Capgemini Deep Customer Insights Intelligent Solution Data- Driven Compliance Capital Markets Trends 2020 | November 2019 Trend 7: Capital markets set to transition away from London Interbank Offered Rate
  10. 10. 10© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019 Source: Capgemini Financial Services Analysis, 2019 Easy access to cloud computing Advancement in enterprise infrastructure Faster processors and lower hardware costs Massive rise in digital data Machine learning (ML) is helping to identify patterns and analyze behaviors to support empirical data-driven decision making 10© Capgemini 2019. All rights reserved | Deep Customer Insights Intelligent Solution Data- Driven Compliance Top Trends in Capital Markets for 2020 by Capgemini Trend 8: Machine learning will advance automation in capital markets
  11. 11. A global leader in consulting, technology services and digital transformation, Capgemini is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year heritage and deep industry-specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. It is a multicultural company of over 200,000 team members in more than 40 countries. The Group reported 2018 global revenues of EUR 13.2 billion. About Capgemini Learn more about us at www.capgemini.com This message contains information that may be privileged or confidential and is the property of the Capgemini Group. Copyright© 2019 Capgemini. All rights reserved. People matter, results count.

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