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A Strategic Imperative for 2025
in Capital Markets
Published: November 25, 2024
As we approach 2025, capital markets firms face an urgent need to modernise their Commercial Off-The-Shelf (COTS) applications. The financial landscape is undergoing significant transformation, driven by technological advancements, regulatory changes, and shifting client expectations. For firms operating in this competitive environment, application modernisation is not just beneficial; it is a strategic imperative.
Many capital markets firms have relied on COTS applications for critical functions, including trading, risk management, and compliance. As market dynamics change, firms find themselves constrained by these legacy systems, which can hinder agility, increase operational risks, and complicate compliance with evolving regulations.
With increasing regulatory scrutiny, capital markets firms must ensure that their systems can adapt to new compliance requirements swiftly. Modernised applications can facilitate better data management, reporting, and audit capabilities, ensuring firms remain compliant without excessive manual intervention.
Legacy COTS applications can lead to inefficiencies due to rigid architectures and lack of integration. By modernising these systems, firms can streamline processes, reduce operational costs, and improve data accuracy, ultimately enhancing decision-making.
Investors today demand enhanced digital experiences, including real-time access to data and intuitive interfaces. Modern applications enable firms to offer personalized services and quicker responses to client inquiries, improving overall satisfaction and loyalty.
The capital markets landscape is increasingly competitive. Firms that modernise their applications can leverage advanced analytics, machine learning, and automation to gain insights, manage risks, and execute trades more efficiently than their competitors.
To effectively modernise COTS applications, capital markets firms should consider the following strategies:
Conduct a comprehensive assessment of existing COTS applications to determine which systems need modernisation based on business priorities and risk factors.
Moving to cloud-based solutions can enhance scalability and flexibility, allowing firms to respond rapidly to market changes and client demands.
Embracing an API-first approach allows firms to integrate existing COTS applications with new technologies, fostering interoperability and enabling quicker innovation.
Implementing agile methodologies can accelerate the modernisation process, allowing teams to iterate and adapt quickly to evolving requirements.
For capital markets firms, application modernisation is a strategic imperative that cannot be ignored as we move toward 2025. By modernising their COTS applications, firms can improve operational efficiency, enhance customer experiences, and maintain regulatory compliance, all while positioning themselves for future growth in a rapidly changing environment. The path to modernisation may present challenges, but the benefits far outweigh the risks, paving the way for a more agile and competitive future.
At First Derivative, we specialise in guiding capital markets firms through the complexities of application modernisation. Our experienced team offers tailored strategies to assess existing COTS applications, ensuring alignment with your business goals. We leverage industry best practices to facilitate seamless transitions to modern platforms, enhancing flexibility and integration. With our support, firms can navigate regulatory challenges, optimise operational efficiency, and elevate customer experiences, positioning themselves for sustainable.
We are committed to delivering exceptional value to our clients. Contact us today to learn more about how our Systems Integration practice can help you achieve your business goals.
Aidan Carr
Practice Lead – Systems Integrations EMEA & APAC
First Derivative
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