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The future of capital markets trading

September 24, 2020

1. Managing volatility and uncertainty

Ongoing volatility increases the risk of unexpected losses, cushioned to some degree by high trading volumes.

2. Facing commoditization

Decreasing brand differentiation via an echo chamber and increasing automation reduce margin opportunities.

3. Cutting costs

An ever-increasing regulatory burden, along with longstanding front- and back-office inefficiencies, is further increasing costs.

4. Responding to evolving client demands

Clients demand more data, services, regionalization and more from the firms they work with—thereby creating new layers of complexity.

5. Delivering innovation

The rapid pace of technology adoption is expected to further separate the leaders and laggards.

Challenge 1: Managing volatility and uncertainty: business as usual while working remotely

11 OUT OF 13

tracked banks booked a year-over-year increase in total trading revenues

8 OUT OF 13

recorded higher revenues in the second quarter than in the first quarter

Challenge 2: Facing commoditization: increasing complexity in light of lower revenues

Firms find themselves in an arms race, acquiring technology that might influence alpha and provide a point of differentiation.

Challenge 3: Cutting costs: effectively, efficiently and necessarily

Challenge 4: Responding to evolving client demands: introducing the Trading Squad

Trading Squads identify and prioritize the needs of high-value clients, then define the tools, products and services needed to manage the customer experience to build loyalty and accelerate growth.

Challenge 5: Delivering innovation: defining the client experience of the future

What to do next