Year in Review 2022: The 6 Areas Shaping the Future of Capital Markets
By Matthew Cheung
We review 6 areas that have the potential to profoundly change the way financial institutions operate in the coming 12 to 24 months. Our market is constantly evolving, and the past few years have seen several key trends reshaping the way the markets operate. From the rise of chatbots and AI to the growing popularity of NFTs and web3, here are six areas to watch over the coming year.
Chatbots and AI
These technologies are helping to streamline processes, improve efficiency, and reduce costs for financial institutions. Hence, the use of chatbots and AI in capital markets is on the rise, with these technologies being used for a wide range of tasks. For example, chatbots can be used to handle client inquiries on prices and trades, while AI algorithms can be employed to analyse market data and identify trading opportunities. Chat and collaboration platform Symphony, recently acquired NLP and data analytics platform Amenity Analytics while OpenAI's ChatGPT gained 1 million users in less than a week - the fastest-growing use of a software application in history.
Here's a peek at how ChatGPT will revolutionise the industry showing that AI can describe an interest rate swap, write code and create unit tests:
The rise of non-fungible tokens (NFTs) and the growth of the web3 ecosystem are also shaping the future of capital markets. They're helping in a number of areas such as security and immutability, accessibility and interoperability, as well as decentralisation and control. Banks such as J.P. Morgan and SocGen have already made real trades using blockchain, while the CEO of the world's largest asset manager BlackRock, thinks the 'next generation for markets is tokenisation'. We've seen the growth in decentralized finance (DeFi) which is enabling new forms of peer-to-peer trading and lending that are bypassing traditional financial intermediaries. DeFi (Decentralised Finance) and DEXs (Decentralised Exchanges) may get more attention in 2023 as mismanaged centralised exchanges like FTX have blown up. Learn more about the use cases in financial markets for NFTs.
FIX APIs provide a standardised way to share financial data and are the backbone of many processes in the industry. However, not all financial market participants have the time, resources or domain expertise to connect via FIX. Alternative - and easier - ways to integrate data, or even connect FIX to unstructured data, are now available through platforms like ipushpull. Learn about the pros and cons of using FIX vs REST APIs.
Another trend that is impacting capital markets is the growing availability of real-time data. As clients and customers demand data in real-time, data producers such as data vendors, fintechs, venues, banks and brokers need to make their data accessible in any application or system clients want. Clients use real-time data and analytics to make faster, more informed trading decisions and stay ahead of the competition. Learn about the benefits of real-time data delivery to broker desks.
Management of pre-trade workflows
Pre-trade workflows are becoming increasingly sophisticated, with the use of AI and other technologies helping to automate many of the manual tasks involved. This is making the process of trading faster and more efficient, minimising errors and costs. Furthermore, reducing the need for manual intervention increases the accuracy and quality of trade execution. Read about how we're helping customers streamline workflows for sales and trading desks.
Finally, the regulatory landscape is also changing, with a growing focus on issues such as consumer protection and market integrity. This is leading to the development of new rules and guidelines that firms must comply with, and it is shaping the way capital markets operate. Learn how ipushpull can help manage spreadsheets and EUC risk.
Overall, these trends are having a profound impact on the world of capital markets, and they are likely to continue to evolve and shape the industry in 2023 and beyond. ipushpull is active in each of these areas, if these topics interest you and you want to understand how we can deliver on-demand or streaming data solutions for you, get in touch.