In capital markets, companies face a critical decision: where to invest internally and how to partner externally to build the most effective solutions for their customers. Reflecting on 2024, we anticipated major shifts for 2025, focusing heavily on cloud adoption and as-a-service technologies, especially with changing economic conditions, political landscapes, and technology’s growing role in financial services.
Cloud and as-a-service models became essential, helping companies innovate faster with managed services and improved feature deployment. These technologies now allow capital markets to adapt to client needs efficiently, enabling quicker integration and execution. Over the past year, we’ve seen cloud technologies drive forward the ability to respond to economic changes and sector-specific client demands in the financial landscape.
2023 saw various impacts on clients across sectors, each experiencing interest rate changes and market volatility uniquely. For some clients, increased rates and volatility proved beneficial, enhancing their business activities. For others, these conditions created operational challenges, impacting strategic decisions. This diverse response is something we’ve monitored closely to help tailor our tech solutions to the nuanced needs of our buy-side and sell-side clients.
One event we couldn’t foresee was the bank failures of 2023, notably Signature Bank and Silicon Valley Bank. As we look ahead, regulatory tightening around capital and liquidity requirements is expected, especially for banks holding over $100 billion in assets. Europe, with advanced regulatory frameworks, may pave the way, prompting other jurisdictions to adopt similar measures to enhance stability.
Traditionally, buy-side and sell-side firms had distinct roles. However, the lines are increasingly blurring. Buy-side firms now self-clear and engage in securities lending, while sell-side firms are expanding into investment management and research. This convergence represents an opportunity for us to create integrated tech solutions that cater to this evolving client landscape.
AI and ML were on our radar last year, but 2023 saw unprecedented advances in generative AI, especially with the rapid rise of platforms like ChatGPT, which gained 100 million users in two months. This trend underscores AI’s power to drive productivity gains, such as with GitHub’s Copilot for code prediction, which accelerates development cycles and opens opportunities for innovative problem-solving.
Managed services continue to grow as organizations seek scalable, efficient technology solutions. Digitalization and analytics tools have evolved, making data analysis easier and more accessible. Yet, data enrichment—merging various data sources for comprehensive insights—remains a challenge. The complexities of IP, contracts, and data integration have slowed market adoption. However, areas like regulatory technology (RegTech) and ESG data aggregation may drive breakthroughs in data utilization.
Generative AI technology is reshaping operational models, enabling companies to adopt pre-trained models rather than develop them from scratch. This trend democratizes AI, allowing businesses to use data more creatively in areas like document processing, content creation, and productivity enhancements. With providers like Microsoft and Amazon offering model marketplaces, businesses have unprecedented access to advanced AI without the need for extensive in-house expertise.
Enterprise Data Sharing is expected to be a significant trend, emphasizing secure data accessibility over traditional transfer methods. This shift will improve operational efficiency across the financial sector, especially as data becomes centralized in managed services. RegTech adoption will also see a surge as regulatory pressures and enforcement intensify, compelling financial institutions to leverage technology to stay compliant.
As the regulatory landscape evolves, so must our strategies. Regulatory bodies are increasingly attentive to the risks and opportunities presented by AI, especially with generative AI raising concerns about data security, privacy, and social impacts. Europe’s proposed AI regulation and the U.S. executive order on AI signify a global movement toward responsible AI usage. For our clients, compliance remains paramount, making RegTech investments critical in minimizing risk and optimizing regulatory processes.
As we look forward to 2025, data will underpin nearly every aspect of capital markets—from AI-driven innovations to cloud-based solutions that offer unprecedented client insights. The goal is clear: use data to inform smarter, faster decisions while maintaining the security and integrity clients expect. The confluence of data, AI, and cloud technologies presents exciting possibilities for efficiency gains and customer satisfaction.
