You Won't Recognize the Capital Markets in 2015

By Greg MacSweeney, Wall Street & Technology

As technology advances, investors' needs shift and regulations allow for new business models, sell-side firms will compete directly with stock exchanges sometime during the upcoming decade, according to speakers at the Wall Street & Technology Executive Forum, "The Evolving 21st Century Brokerage: Business & Technology Innovations on the Horizon."

Peter Horowitz, managing director of BearingPoint financial services and global markets lead, said that the expansion of emerging markets, new technology and changing regulatory standards, amongst other trends, will help to drastically change the industry in the coming years. Horowitz was commenting on a BearingPoint report that was released at the event, titled "Shifting from Defense to Offense: A Model for the 21st Century Capital Markets Firm."

To kick off the event, Sean Park, managing director and head of digital markets at Dresdner Kleinwort Wasserstein, provided a video presentation that outlined a possible timeline of how financial services could change between now and 2015, as technology and regulations make it possible for new players to enter the capital markets.

"We have seen the list of the top 10 investment banks and brokerages change every 10 years, with new players breaking in and others fading away through consolidation and competition," said BearingPoint's Horowitz. "We can expect to see an even more dynamic shift over the next ten years as exchanges, which are searching for profits and growth more aggressively than ever before, muscle their way onto the playing field. As a result, sell-side firms must begin preparing immediately to use technology to both capitalize on alternative revenue opportunities and identify new ones." Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio