A host of regulatory changes were introduced globally in 2019 to push greater transparency in the capital markets industry. These new and beefed-up regulations are forcing capital markets to innovate and undertake initiatives to ensure cost-effective and efficient compliance. Capital market firms are moving to data-driven compliance to confirm standards in the use, distribution, and protection of valuable customer information. Customer engagement and satisfaction have been a burning issue for the industry for quite some time. Within today’s competitive landscape, the pressure to improve customer service is palpable. Therefore, capital market participants are adopting artificial intelligence (AI) to power intelligent solutions that can streamline and optimize operational processes. Firms are generating insights to help anticipate individual customer needs and to bolster satisfaction. In-depth customer insights — generated through the analysis of vast amounts of data — will enable product development that delivers robust and relevant value propositions.

1. Top Trends in Capital
Markets: 2020
November 2019
Link: https://www.capgemini.com/top-trends-in-
2020/

2. 2© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Top Trends in Capital Markets for 2020 by Capgemini
Artificial intelligence to enhance pricing decisions in bond securities trading
Capital markets firms leverage blockchain technology to enhance data transparency
Digital securities – a new generation of assets
Robotic process automation simplifies client onboarding
Intelligent
solution
Quantamental investing: New buy-side trend is gaining ground
Common domain model aims to standardize derivatives trading and management
Capital markets set to transition away from London Interbank Offered Rate
Data driven
compliance
Machine learning will boost automation in capital markets
Deep customer
insights
01
02
03
04
05
06
07
08

3. 3© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
1 Illiquidity can substantially impact yield spreads, which significantly widen during times of market volatility
Market liquidity is low1
Unique legal and financial complexity
Legacy methods
Regulatory changes
Lack of centralized data
Capital market firms will
leverage AI predictive
analytics for better pricing
and liquidity in the market
3© Capgemini 2019. All rights reserved |
Trend 1: Artificial intelligence will enhance pricing decisions in bond securities trading
Top Trends in Capital Markets for 2020 by Capgemini
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance

4. 4© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Open and permission-less network
Secure and tamperproof
Transparent and public data
Source: Capgemini Financial Services Analysis, 2019
4© Capgemini 2019. All rights reserved |
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance
Top Trends in Capital Markets for 2020 by Capgemini
Trend 2: Capital markets firms leverage blockchain technology to enhance data
transparency

5. 5© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
Low
ticket
size
Automation
Can be
coded for
compliance
Simplified
governance
24/7
access
Cost-
effective
and
transparent
5© Capgemini 2019. All rights reserved |
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance
Top Trends in Capital Markets for 2020 by Capgemini
Trend 3: Digital securities – a new generation of assets

6. 6© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Regulatory
compliance
Customer
support and
service
KYC process
Request
processing
Source: Capgemini Financial Services Analysis, 2019
6© Capgemini 2019. All rights reserved |
Capital market firms are leveraging RPA in client onboarding processes with an eye on
improved customer satisfaction and increased revenue
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance
Top Trends in Capital Market for 2020 by Capgemini
Trend 4: Robotic process automation simplifies client onboarding

7. 7© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Human insight and wisdom
Proactive reaction to
market conditions
Risk Management
Consistent investment
returns
Source: Capgemini Financial Services Analysis, 2019
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance
Top Trends in Capital Markets for 2020 by Capgemini
Trend 5: Quantamental investing: New buy-side trend is gaining ground

8. 8© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Boosts process effectiveness
Meets regulatory compliance
Encourages transparency
Reduces operation cost
Source: Capgemini Financial Services Analysis, 2019
8© Capgemini 2019. All rights reserved |
The common domain model creates a universal blueprint for greater automation and efficiency in
derivatives trade events and processes
Top Trends in Capital Markets for 2020 by Capgemini
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance
Trend 6: Common domain model aims to standardize derivatives trading and management

9. 9© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Renegotiations to reduce exposure
based on impact analysis
Impact assessment of exposure to
LIBOR and review of existing
contracts
Identify the alternative benchmark
rate along with changes required
in technology infrastructure
Source: Capgemini Financial Services Analysis, 2019; The World Bank, “World Bank Launches Market’s First SSA Secured Overnight Financing Rate (SOFR) Bond,” August 14, 2018, https://www.worldbank.org/en/news/press-
release/2018/08/14/world-bank-launches-markets-first-ssa-secured-overnight-financing-ratesofr-bond
US$ 1
billion
The World Bank priced its first SOFR-linked bond in August 2018, raising
US$1 billion from investors in the Americas and Europe
9© Capgemini 2019. All rights reserved |
Top Trends in Capital Markets for 2020 by Capgemini
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance
Capital Markets Trends 2020 | November 2019
Trend 7: Capital markets set to transition away from London Interbank
Offered Rate

10. 10© Capgemini 2019. All rights reserved |Capital Markets Trends 2020 | November 2019
Source: Capgemini Financial Services Analysis, 2019
Easy access to cloud computing
Advancement in enterprise infrastructure
Faster processors and lower hardware costs
Massive rise in digital data
Machine learning (ML) is helping to identify patterns and analyze
behaviors to support empirical data-driven decision making
10© Capgemini 2019. All rights reserved |
Deep
Customer
Insights
Intelligent
Solution
Data-
Driven
Compliance
Top Trends in Capital Markets for 2020 by Capgemini
Trend 8: Machine learning will advance automation in capital markets

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