Innovation in Capital Markets Technology – A Research Report by MEDICI

As subsets of financial markets, capital markets are integral parts in producing monetary output in economies globally, through which debt or equity-backed securities are bought and sold. Capital Markets are specifically differentiated as the midterm and long term markets in which money is provided for longer than a year. Naturally, in accordance with their vitality and magnitude of holdings, players such as retail investors, mutual funds, commercial banks, and governments have significant roles in the ecosystem.

In the years ahead, capital markets and investment banking are expected to see the increase of attention and development employing innovative technologies. Technology serves as a key driver of value migration in the capital markets industry. While speed, informational advantage, efficient customer flow, and effective use of proprietary capital have always been essential aspects of a profitable market-making business, the way these elements are implemented is changing dramatically.

To demonstrate the current state of capital markets, and explore the whole spectrum of applications and main game changers, the LTP Team introduces the report on the Innovation in Capital Markets Technology, which covers the latest trends in capital markets technologies and profiles of emerging FinTech companies leading these trends.

Some of the key takeaways from the Innovation in Capital Markets Technology report:

Source: Innovation in Capital Markets Technology, MEDICI

1. Global investment banking revenues are falling by nearly 4% annually, accompanied by even bigger dips in fixed income, currencies, and commodities.

2. The average ROE for the world’s leading investment banks have slipped to nearly half as much as the typical 10%-12% cost of equity for an investment bank.

3. The future of capital markets looks brighter with companies aggressively innovating to effectively integrate technology in the market and a 12% increase in revenue distribution for Capital Markets expected by 2020.

4. A powerful ecosystem of companies is contributing to the growth and evolution of capital markets through Robotic Process Automation (RPA), Big Data Analytics, Artificial Intelligence, Distributed Ledger Technology, and the Internet of Things (IoT):

  • Kensho: Already partnered with Goldman Sachs, Kensho uses its intelligent computer systems to automatically process complex financial questions in real time.
  • Dataminr: Dataminr uses Big Data Analytics on public data sources, allowing them to produce actionable signals for clients across Finance and Security sectors.
  • AlphaSense: Uses Artificial Intelligence technology to power a search engine for professional investors and firms.
  • Clearmatics: Using their Decentralized Clearing Network (DCN) technology, Clearmatics provides a single platform for post-trade process automation.

Moreover, the report covers technologies offered by such leading innovators across sectors as:

Detailed profiles of the above-mentioned companies and other firms assessed in the report can be found in MEDICI, FinTech’s Global Knowledge Network, as well as in the report.

In full, the report contains the following elements:

  1. Introduction to Capital Markets
  2. Current state of Capital Markets
  3. Emerging FinTechs across Capital Markets Technologies – Robotic Process Automation (RPA)
  4. Emerging FinTechs across Capital Markets Technologies – Analytics
  5. Emerging FinTechs across Capital Markets Technologies – Digitization
  6. Emerging FinTechs across Capital Markets Technologies – Artificial Intelligence
  7. Emerging FinTechs across Capital Markets Technologies – Internet of Things
  8. Emerging FinTechs across Capital Markets Technologies – Blockchain & Smart Contracts