Capital markets firms are facing several trends in 2017: - Driving client experience is becoming critical to sustain business growth. - Pricing models for research are being unbundled to increase transparency. - Firms are adopting robotic process automation to reduce costs and gain a competitive advantage. - Cloud-based solutions and data analytics are becoming more strategically important functions. - Blockchain technology may change how data is managed, and regulations are pushing specialization among fintech startups.

1. Capital Markets Trends for 2017

2. 2Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Capital Markets Trends 2017
Capital
Markets
Trends
Driving client experience is
becoming a critical element
for firms to sustain and
grow their business
Pricing models for
research are being
unbundled to comply with
transparency requirements
Firms are adopting RPA,
not only to reduce cost but
also as a means of
competitive advantage
Cloud-based solutions
continue to gain more
usage in capital markets
FinTech startups are
increasingly specializing in
specific part of regulations
and collaborating with
incumbents
Investment banks are
focusing on simplification
and redefining their
business models
Collateral management is
witnessing increased focus
from market participants
Data management and
analytics is evolving into a
strategic function and
becoming a critical element
for firms
Blockchain technology is
expected to change the
way data is managed in
capital markets
Cybersecurity continues to
be a focus area for firms as
digitization is increasing
risk exposure

3. 3Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Stricter Regulatory
Supervision
Tighter Liquidity and Capital
Requirements
Investment banks are focusing on simplification
and redefining their business models
Encroaching Competition
Industry is shifting towards
advisory and underwriting
functions that provide
higher margins
Technology investments to
gather pace as investment
banks initiate agile
technology platforms
Source: Capgemini Financial Services Analysis, 2016

4. 4Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Increase in tech-literacy
Driving client experience is becoming a critical
and essential element for firms to sustain and
grow their business
Possible erosion of market share of
the incumbents
The future of products and
service is expected to shift to
a client-centric one from the
current product-centric
approach
Source: Capgemini Financial Services Analysis, 2016

5. 5Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Regulatory Compliance
towards Transparency
Mitigation of Credit /
Operational Risks
Collateral management is witnessing increased
focus from market participants and they are
coming up with integrated offerings
Resiliency against Market Stress
Solutions Focus
Centralization
Greater Automation
Collateral Optimization
Source: Capgemini Financial Services Analysis, 2016

6. 6Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Source: Capgemini Financial Services Analysis, 2016; “New regs weaken research trading link”, Bloomberg Trading Solutions, August 15, 2016 accessed October 2016 at https://www.bloomberg.com/trading-
solutions/blog/new-regs-weaken-research-trading-link/
Current regulations require fund managers to create
separate transparent research payment accounts
Investors are increasingly looking for
transparency in pricing of investment products
Pricing models for research are being unbundled
to comply with accurate and comprehensive
transparency requirements
€1.7
billion
a year
Transformation of research
function could cost research
providers a huge amount of
money in commissions in Europe

7. 7Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Data management and analytics is evolving into a
strategic function and becoming an increasingly
critical element for capital markets firms
Regulatory Pressures
Risk Management
Changing Business
Requirements
Cost Rationalization
Data Integration and Data
Quality
Source: Capgemini Financial Services Analysis, 2016

8. 8Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Cost Reduction
Higher Accuracy and Quality
Capital market firms are increasingly adopting
Robotic Process Automation, not only to reduce
cost but also as a means of competitive advantage
Reduced Human Error
Better Speed
Advanced Analytics
Regulatory Compliance
Source: Capgemini Financial Services Analysis, 2016

9. 9Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Ledger Consolidation
Faster Clearing and Settlement
Blockchain technology is expected to change the
way data is managed in capital markets
Lowering in Systemic Risk
Enables firms to work on common
datasets, in real-time, and with minimal
supporting operations, which will entail
a simplified, cost-efficient, transparent,
and robust system for all market
participants
Mid- and Back-Office Efficiency
Source: Capgemini Financial Services Analysis, 2016

10. 10Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Cost savings on IT
Infrastructure
Client demand for more cost
effective, agile, standardized,
and secure services
Cloud-based solutions continue to gain more
usage in capital markets
Helps turn IT related capital
expense into usage based
operational expense
Source: Capgemini Financial Services Analysis, 2016

11. 11Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Cybersecurity continues to be a focus area for
capital market firms as digitization of various parts
of the value chain is increasing risk exposure
$4.0
million
Average cost of
data breach
incident in 2016
Damage to
Brand and
Reputation
Legal Suits
and
Investigation
Decline in
Clients’ Trust
and
Confidence
Loss due to
Heavy
Penalties
Source: Capgemini Financial Services Analysis, 2016; “2016 Ponemon Institute Cost of a Data Breach Study”, larry Ponemon, Security Intelligence, June 15, 2016 accessed October 2016 at
https://securityintelligence.com/media/2016-cost-data-breach-study/

12. 12Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
FinTech startups are increasingly specializing in
specific part of regulations and collaborating with
incumbents
Risk data aggregation
Trading in financial markets
Modeling, scenario analysis, and forecasting
Source: Capgemini Financial Services Analysis, 2016

13. The information contained in this presentation is proprietary.
© 2015 Capgemini. All rights reserved.
www.capgemini.com
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