The future of capital markets lies in digitalization. Financial service firms need to digitize and modernize to bring their technological infrastructure into the 21st century. It’s crazy to see how many firms still rely on Excel spreadsheets and handwritten notes when they can be taking advantage of the technological advances that lead to increases in efficiency and productivity. BNY Mellon recently published a report exploring how firms should be future proofing by using more advanced technology. Here are the two biggest takeaways:
The first big takeaway is the importance of artificial intelligence. Artificial intelligence is the next wave in all things technological and it can be an important tool for capital markets. Per the BNY Mellon report, “portfolio managers and quantitative specialists are increasingly using tools such as cognitive computing, machine learning and social media to obtain informational advantages, while robotic process automation is being applied in the asset servicing space to enhance client experience.” Dealmakers can work smarter and more efficiently by automating certain processes. For example, they can set up alerts, receive suggestions on deals or communication updates, and pull reports populated with data.
In this way, firms can leverage artificial intelligence to make workflow more effective and efficient every single day. It is so important for firms to recognize the value of AI and see how right now they are barely scratching the surface of what they can do with automation. If firms can make it possible for dealmakers to focus on client interaction rather than collecting and organizing data, the client is better served. Thus, being open and ready for what artificial intelligence and automations will have to offer is a key component for the future of your firm.
The second significant takeaway are application programming interfaces (APIs). APIs are data flows that create connections to communicate data between systems.
APIs are being created to organize and provide data in a way that suits the client. This data, along with analytics tools, helps buy-side leaders improve investment performance, increase asset flows, and enhance the client experience. The goal is to generate value for end-clients and the organization, according to the BNY Mellon report.
APIs can be set up in different ways, allowing data to be customized and shared between systems. This is important for firms to integrate HR platforms, portfolio monitoring platforms, and financial institutions for easy and efficient data sharing.
It’s important to have an open platform for your firm to use APIs and have efficient data flow. APIs are crucial for a good technological infrastructure and future-proofing your firm.
Digitalization is the future of the capital markets industry. Using AI and APIs to digitize is the smartest and most efficient way to future-proof your firm.