Financial Technologies: New Infrastructure Opportunities in the Capital Markets

Technologies have long been a driver for improving the efficiency of capital markets for both investors and CMIPs companies that manage exchanges and other trading platforms, are key players, securities depositories, analyst companies and economic accounting companies.

Recently, fintechs have developed and are entered the market faster. While CMIPs recognise that fintech will have a significant influence on the industry, they remain unsure of which technologies to adopt and to what degree, and how best to engage and interact with fintech companies.

The role and importance of CMIPs in the markets has grown — along with their revenues—owing to changes in the regulatory environment. Moreover, it is expected that they will further grow and become more efficient. McKinsey has identified four fintech themes shaping the CM value chain.

Some of these themes increase productivity and lower costs, while others generate new sources of revenue. These include the use of advanced analytics and artificial intelligence, cloud data, automation and robotics; establishment of a separate branch of regulatory tech firms.

At the same time, CMIPs follow various routes to bringing fintech into their organisations. They more often enter into collaboration agreements, establish joint ventures or acquire minority or majority stakes in advanced financial companies.