London: A new report conducted by Xceptor in partnership with Crisil Coalition Greenwich has unveiled how firms across the capital markets landscape are rethinking their operational strategies in response to growing complexity, rising trade volumes, and evolving regulatory demands. Xceptor Chief Executive Officer, Michiel Verhoeven emphasised the growing pressure on firms to modernise, especially with new regulatory shifts like T+1 and the European Union’s Faster Initiative.
According to BERNAMA News Agency, the Crisil Coalition Greenwich report confirms the industry’s prioritization of automation and artificial intelligence (AI) to ensure data accuracy. The report revealed that while nearly 90 per cent of respondents believe digital transformation will enhance operational efficiency, fewer than one-third (28 per cent) report broad support from their organisations, with one in 10 indicating a lack of organisational support.
The report highlighted significant obstacles to digital transformation, including legacy systems (57 per cent), cost concerns (56 per cent), and manual data entry (39 per cent). Improving data capture and transformation is a primary focus, with over half of the firms planning to invest in workflow automation within the next year, while a similar percentage have already done so in the past 12 months.
Titled ‘Operational efficiency is driving digital transformation in capital markets’, the report also revealed that firms use up to five different platforms for asset class coverage, with 95 per cent of respondents acknowledging that no single platform can cover them all. This results in disjointed workflows and data silos, particularly affecting middle- and back-office operations such as regulatory reporting, client onboarding, and trade reconciliation. These inefficiencies contribute to operational risk and cost, prompting many firms to allocate up to five per cent of annual capital for exception handling.
AI adoption is met with caution in the industry. While 60 per cent of respondents see AI as important to their transformation strategy, nearly a quarter do not consider it important. Furthermore, 43 per cent plan to adopt AI within two years, whereas 23 per cent have no plans to incorporate AI at all.
The study, which surveyed over 70 C-suite and senior leaders from capital markets firms across North America, the United Kingdom, Europe, and Asia Pacific, provides insight into firms’ responses to evolving data requirements and highlights significant opportunities for transformation.