2018资本市场金融科技发展报告（英文版）_16页_933kb

Fintech in Capital Markets 2018: Boosting Productivity Through Technology Innovation

Core Content

This white paper explores the role of fintech in capital markets, focusing on how technology innovation is driving productivity and transformation across the industry. It outlines the current state of fintech investment, the impact of technology on different segments of the value chain, and the strategic approaches investment banks are adopting to integrate fintech solutions.

Key Takeaways

• Fintech Investment Trends:

  • Equity funding in capital markets fintech fell by over 50% in 2017 compared to the previous two years.
  • Investment banks increased their participation in fintech, with smaller banks nearly tripling their investments.
  • Tier 1 banks invested less in fintech compared to Tier 2 and Tier 3 banks, which had a more balanced approach.
  • Investment banks accounted for 49% of equity funding in 2017, the highest on record.

• Fintech Segmentation:

  • Capital market fintechs are categorized into five segments: Primary markets, Pre-trade, Execution, Post-trade, and Support.
  • Pre-trade and Execution fintechs have been the most invested in since 2000, with 39% and 35% of total investment respectively.
  • Support fintechs are the most advanced, with 60% of funding at Series B or later.

• Technology Impact:

  • Artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA) are key technologies driving productivity in capital markets.
  • Fintechs are increasingly using AI and ML to enhance Pre-trade and Execution activities, such as generating trading signals and improving client flow.
  • RPA is primarily used in Post-trade and Support segments for automation of repetitive tasks like payments processing and data reconciliation.
  • Distributed ledger technology (DLT) is finding applications in Post-trade, with initiatives like blockchain-based settlement systems and record-keeping platforms.

• Investment Bank Tech Spending:

  • Investment bank IT spending (CTB) has been flat, with a four-year CAGR of around 1%, despite a 5% increase in 2017.
  • Only 20% of CTB spend is directed toward true innovation, with the majority focused on legacy system upgrades.
  • CTB spend in FICC (Fixed Income, Currencies, and Commodities) can yield productivity gains three times higher than in Equities.

• Strategic Implications:

  • Investment banks need to adopt tech-inspired paradigms such as Agile to accelerate digital transformation.
  • The choice of fintech engagement models (M&A, VC, partnerships, etc.) varies by institution and depends on their scale, product offerings, and client mix.
  • Fintechs backed by industry leaders or large anchor clients are more likely to succeed, especially in areas like M&A and valuation.

Fintech Value Chain Impact

• Primary Markets:

  • Fintech platforms are improving the efficiency of securities issuance.
  • They help connect dealers, issuers, and investors in private placements and other markets.

• Pre-trade:

  • Fintechs are responding to MiFID II requirements by offering value-added research solutions.
  • They are using natural language generation and advanced analytics to improve research delivery and reduce costs.

• Execution:

  • Fintechs are aiding in proving best execution, especially in asset classes with many trading venues.
  • Solutions like Mosaic Smart Data are demonstrating productivity gains through predictive analytics.

• Post-trade:

  • DLT is becoming a significant tool, with initiatives like the Australian Securities Exchange's blockchain-based settlement system.
  • Fintechs are re-engineering transaction recording and clearing processes, and developing new platforms for fund record keeping.

• Support:

  • Cloud migration is gaining traction, with systems providers offering cloud-based solutions.
  • Tailored analytics, graph technology, and APIs are being used to track trade lifecycle processes and mitigate operational risks.

Strategic Recommendations

• Choose Your Battles Wisely:

  • Banks should focus on fintech investments that align with their business goals and strategic priorities.
  • Investment banks tend to favor venture capital structures, while exchanges and information service providers prefer M&A and strategic partnerships.

• Tailoring Approaches:

  • Tier 2 and Tier 3 banks may benefit from enhancing their tech capabilities through partnerships or acquisitions rather than in-house development.
  • Tier 1 banks should focus on broader digital agendas, including leading in AI and DLT innovation.

• Digital Transformation:

  • Banks must restructure their organizations to support new tech paradigms like Agile.
  • A strong CIO mandate is essential to drive innovation and ensure that technology becomes a key enabler of business growth.

Conclusion

The integration of fintech into capital markets is reshaping the industry, with technology serving as a critical driver of productivity and innovation. While investment banks have made progress in fintech investment, they still lag behind in CTB spend compared to non-bank liquidity providers. Strategic alignment, technological adoption, and organizational transformation are key to leveraging fintech's full potential in the capital markets.