Here are three ways in which capital market firms can become adaptable and responsive.
Develop capabilities to launch quickly
The ability to launch products swiftly, once a market trend, opportunity, or threat is identified allows firms to gain competitive advantage or retain parity, in turn attracting new clients and retaining existing ones. A swift response, however, will require firms to re-evaluate their product operating models, restructure the people-process-technology triad, and ensure robust data management to improve time-to-market for new products and services.
For example, wealth management firms must quickly launch products that can be personalized to individual clients’ preferences or sustainability values gaining an edge over firms offering standard sustainability products. Integrating ESG strategies, data, and dashboards and regulatory reporting mechanisms into the product operating model is thus a key step for a quick launch.
Infuse agility into processes
Catering to dynamic customer journeys, omni- and opti-channel engagement, hybrid engagement platforms, hyper-personalization, and digital self-service requires a high degree of business agility. The industry is already seeing such trends. Wealth management firms are looking at introducing a hybrid digital advisory platform to enable clients to gain access to advice in an efficient, understandable, convenient, affordable way while also meeting clients’ sustainability objectives. Retail firms are automating the entire onboarding process for better customer experience while some institutional banks are offering open APIs to provide a technical foundation to facilitate digital, cross-organizational business processes. Similarly, some firms are deploying digital assistants to provide self-service facilities to clients and on-demand insights to staff.
Accomplishing all this mandates a high degree of business agility, which in turn necessitates a robust business and operating model underpinned by a digital core, intelligent automation, cloud transformation, and machine-first principles. The industry needs to focus on new paradigms such as:
- Strengthening the digital core by adopting artificial intelligence, cloud, and cognitive technologies
- Embracing risk and complying with regulations in a rapidly changing ecosystem
- Fuelling innovation and infusing agility in business and IT
In this context, the increasing shift to a hybrid workforce model deserves a special callout given unexpected benefits like real estate cost savings and the ability to attract and retain new talent. To adapt to a hybrid workforce model, firms must build the requisite agility and infrastructure to support remote workers.
Manage evolving regulations
Becoming future-ready will entail rapidly adapting to evolving and new regulations, necessitating a robust risk and compliance management framework. To this end, firms must leverage technology to improve overall operational efficiency and at the same time reduce cost. With the increased focus on climate risk today, adopting the right technology platforms can help financial firms model physical and transition risks and factor them into business, operating, and investment models. Key technologies that firms will need to adopt are:
- Scalable enterprise platform
- Intelligent automation for know your customer (KYC) and anti-money laundering
- Next gen data architecture
- Report automation and data analytics
- Risk assessment tools and technology platforms offered by fintech players
- AI enabled risk assessment frameworks