Capital market companies are once again facing enormous challenges that they must overcome in order to be successful.
AdEx Partners supports its customers with its entire service portfolio as well as deep and specific capital market know-how in order to not only be prepared for these challenges, but also to gain a competitive edge from them.
The service portfolio includes: Transformation Management, Business Model and Portfolio Transformation, Business Capabilities, Organization, ERP, Architecture & Technology and Data Value Management.
Market volatility and instability of participants
Responding to the permanently changing environmental influences
Rising interest rates and the re-emergence of equity
The right answers to interest rate policy and its effects
Market consolidation, scaling and cost pressures - emergence of specialists
Remaining competitive in a changing market
Pace of technological progress
Staying one step ahead in technological progress
Provision of services to an increasingly conscious and regulated market
Provide the right services
- Respond to Geopolitical Risks – be able to rapidly adjust markets and clients being served
- Manage inherent Capital Market Risks – Once again - need to further improve risk management in case of market participant default
- Know your customer – be able to meet all requirements regarding KYC
- Leverage your data – increase capacity for prediction of market developments, ability to flexibly adjust to internal and external reporting requirements
- Reduce exposure – limit own exposure to volatile market participants and asset classes
![[Translate to English:] Rising interest rates and the re-emergence of equity](/fileadmin/user_upload/Rising_interest_rates_and_the_re-emergence_of_equity.jpg "[Translate to English:] Rising interest rates and the re-emergence of equity")
- Capital markets participants have experienced strong growth in trading volumes over the past few years - Capacity and scalability of organization, processes and IT need to be able to handle volatile volumes at efficient cost
- Demand for low-cost investment vehicles, such as passively managed ETFs (often in combination with saving plans) has surged over the past years. This often came at the expense of higher-margin actively managed products. Cost efficiency through the entire value creation chain of asset management therefore is crucial
- Rise in interest rates will also mean higher attractiveness of fixed income products and traditional savings accounts, which results in lower demand for other asset classes. Sell side market participants and their organization will need to be able to flexibly react to these changed demands
- On the other hand, due to high interest rates, corporates will increasingly seek financing through equity - Sell side market participants and their organization will need to be able to flexibly react to these changed demands
- Overall, a long-term higher interest rate level will enable banks to generate higher revenues - This will give more room to maneuver and to also address structural issues in core IT and architecture, which have often been neglected during the past phase of low interest rates and revenues
- Number of market participants is shrinking, size of market participants increases - Ability to efficiently execute M&A activities, and carry out merger/post-merger-integration can be a requirement for organizations
- Operating at high volumes is paramount for profitability; large international providers are entering European Market - Scalability of processes and IT are a prerequisite
- Operational excellence is key to succeed in increasingly competitive markets - Organization, processes and IT need to be streamlined accordingly and workforce enabled
- Fintechs, and Global players drive innovation - Capital Markets organizations must be able meet the pace of technology leaders to stay competitive. Market transparency and increased client mobility means leveraging cutting edge technology is a must
- Traditional European players covering a broad range of services compete with specialists in all their business areas - Focus on core strengths and strategic business fields complemented with providing clients access to complementing products and services becomes the norm
![[Translate to English:] Market consolidation, scaling and cost pressures - emergence of specialists](/fileadmin/user_upload/Market_consolidation__scaling_and_cost_pressures.jpg "[Translate to English:] Market consolidation, scaling and cost pressures - emergence of specialists")
![[Translate to English:] Pace of technological progress](/fileadmin/user_upload/Pace_of_technological_progress.jpg "[Translate to English:] Pace of technological progress")
- Speed, agility and scalability of IT - Cloud and hyperscaler platforms are the central for state-of-the-art OIT architecture in financial services industry
- IT Resilience - After years of limited investment in IT on one hand and increasing demands on the other, IT resilience has become a focal point in the public perception of the entire banking industry
- Efficient and flexible IT Organization to support growth and keep enable innovation - An effective IT Operating Model (ITOM) is crucial, to fulfill the increasing requirements of capital markets organizations
- New asset classes, such as crypto currencies or NFTs and new processes, such as digital security issuance, require agile, secure and high performing IT architecture
- AI has become mainstream since the emergence of language model chat bots into the public space. It will fundamentally change the way investment decision are being taken, by both retail and institutional investors and how trading is being executed. Capital market players will need to prepare. A first and crucial step lies in the optimization and integration of data management throughout the organization
- Existing and upcoming EU regulation, such as Taxonomy Regulation, Corporate Sustainability Reporting Directive (CSRD), EU Green Bonds Regulation (EUGBR), Corporate Sustainability Due Diligence Directive (CSDDD) - Require strong and focused analytical and implementation capabilities for staff, processes and IT of Capital Markets organizations
- Institutional buy-side as well as retail investors are increasingly demanding ESG compliant products - Reflecting all requirement is a challenge for the entire value creation process, especially data management
- Sustainability and compliance ESG-criteria are increasingly a must-have factor for clients (both retail and wholesale) when choosing capital markets providers - The whole organization needs to be set up accordingly
- Positive environmental and social impact as an opportunity to drive growth and higher public-market valuations
![[Translate to English:] Provision of services to an increasingly conscious and regulated market](/fileadmin/user_upload/Provision_of_services_in_capital_markets.jpg "[Translate to English:] Provision of services to an increasingly conscious and regulated market")
