COVID-19 automation learnings for capital markets firms
Large-scale automation change is being driven by the accelerating demands of post-pandemic working for capital market firms.
A new survey, Letting Go of Legacy Systems in 2021: The Accelerating Speed of Automation for Post-Pandemic Capital Market Firms, show that technology is fast becoming more embedded in the business of capital markets than ever before.
The impetus is largely due to the global COVID-19 health crisis (and remote working) accelerating digital and cloud transformation.
The report’s authors, WBR Insights, surveyed 100 Heads of Innovation and similar from capital markets firms across APAC, Europe and North America to explore the automation challenges they were facing in 2021 due to the impact of the pandemic, and the innovative solutions they were putting in place.
But it’s not just the pandemic that is driving the speed of transformation. It is also the need to keep pace with evolving customer expectations and economics driven by Moore’s Law.
As Moore’s Law predicted, since the 1970s, the power of computers has doubled every 18 months, yielding computers which are millions of times more powerful than their ancestors even a decade ago. This growth in processing power means capital market firms can more easily and simply dig deeper into their granular data to uncover patterns that can be used to stoke up their trading strategies, operational efficiencies and client experiences.
72% of the survey respondents said unstructured and alternative data sets were now “important” to their firm’s data management strategy.
They prioritised the outcomes in this way:
- Improving revenue generation and value delivery to clients
- Improving operational efficiency across the organisation
- Safeguarding cybersecurity across the wider organisation’s legacy systems
Cloud computing is set to be one of the key technologies that has the potential to shape the development of global capital markets firms in 2021.
Most firms are either planning to adopt new cloud services or to replace their legacy systems with a cloud platform to enable them to be more responsive to stake holder needs, access data and be compliant with regulatory mandates.
The COVID-19 pandemic is motivating firms to move forward their cloud journey and to make a clean break from their complex legacy technology setups.
36% of the survey respondents said that a flexible data cost model where they pay for storage and processing as required was the biggest expected benefit for their firm when looking at cloud adoption. Whilst, 29% of the survey respondents said the major appeal of cloud for them was enterprise-wide data consistency into a “single source of truth”.
New technologies are now built using cloud architectures and approaches, while options available to legacy systems are continuing to narrow. Plus, cloud is not just about infrastructure, but also value-added services.
Regardless of the chosen approach, the benefits of cloud mount up quickly. They include accelerated implementation, reduced time to market for new products or services, and usually a lower cost of applying and maintaining the technology.