Top Business and IT Trends in the Securities & Investments Industry: Insights and Implications

by Arin Ray, February 23, 2015
Industry Trends
Global

Abstract

As weak volumes, heavy competition, and constantly evolving regulations continue to impact firms in the Securities & Investments industry, Celent urges them to review and alter their business and technology strategies with a long-term vision in mind, moving beyond short-term measures to address immediate needs.

In the report Top Business and IT Trends in the Securities & Investments Industry: Insights and Implications, Celent highlights the emerging trends in the industry and discusses how market participants can respond and stay competitive in a rapidly evolving environment. Making business decisions without adequately thinking through the technology and operational aspects of business is no longer an option. Technology and service providers are developing new models like shared service, white label and utility solutions, which should drive the next phase of transformation in the industry.

Amidst declining revenue from trading operations, the wealth management business is gaining importance. Digitization and channel integration will be key for the industry because customers and prospects are increasingly using multiple channels to get information and conduct transactions.

Risk management practices at firms in the securities and investments industry are still not sufficient to offset structural shifts resulting from regulatory fragmentation and OTC reforms. At this juncture, most firms are pursuing piecemeal, usually one-off optimization activities, but should adopt a more strategic posture and make improvements throughout the trading and risk workflow at all stages of the process in an orchestrated manner.

“In the last two to three years firms have had to focus heavily on short-term issues, and they must now focus on medium-longer term planning with a vision for their role in the industry in 2020,” says Arin Ray, an analyst with Celent’s Securities & Investments practice and author of the report. “This will include their key value proposition as to the 'what' they will offer to the market, as well as ‘how’ they will offer them. A proper choice of technology and operational model can go a long way in containing cost and increasing efficiency.”

This report adds to Celent’s coverage of IT trends and implications in financial services in general, with an emphasis on the Securities & Investments segment. Celent identifies sector specific trends across the industry value chain including capital market (buy side, sell side, and capital market infrastructure providers), retail wealth management, and finance and risk functions. For each of these sectors Celent identifies the key drivers of change, discusses their implications for industry participants, and offers possible IT solutions to respond to the changes.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

Trends and Implications for Capital Markets

4

 

Sell Side

4

 

Buy Side

10

 

Capital Market Infrastructure Providers

14

Trends and Implications for Wealth Management

20

Trends and Implications for Finance and Risk

24

Growing Importance of Data

29

Conclusion

32

Leveraging Celent’s Expertise

33

 

Support for Financial Institutions

33

 

Support for Vendors

33

Related Celent Research

34

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