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5 Tech Stack Trends to Watch for Capital Market Fintechs in 2023

A lot has happened since the pandemic interfered with our day-to-day at the start of 2020. The financial industry went into overdrive ramping up secure and user-friendly online service options with the help of trusted tech partners. 

Instead of settling back into normal consumer patterns, technology advancements and the demand for online/mobile financial solutions have created a new normal. The banking industry has made significant changes to their business processes to stay relevant, and now capital market service providers are searching for experienced fintechs to help them take the lead on connecting with today’s consumers. 

As the world of finance evolves, so does the technology that supports it. With increasing demand for data-driven and customer-centric services, capital market fintechs are now relying on tech stack trends to ensure their success in 2023. 

Challenges of 2023: Economic Uncertainty & Misinformation

Capital market service providers are facing two significant challenges in 2023: economic uncertainty and misinformation. Both issues can create hesitant investors within the financial industry. 

Looming Economic Crisis

With growing talks of recession, clients are more likely to make financial transactions to secure their investments. It is vital for capital markets SaaS to have sophisticated systems and processes that can help streamline business—from onboarding new consumers, to managing funds and relationships, to dealing transactions. Without the ability to provide these services to their clients, capital markets vendors will not stay competitive.

The Rise of Misinformation

Misinformation is also a key issue capital market providers will need to address in 2023, specifically cryptocurrency. Even with plenty of red flags associated with cryptocurrency (it’s unregulated), many investors choose to take the risk with this volatile option. 

Capital market providers MUST remain reliable and dependable investment partners for their clients. As the year progresses, many private investors may become more skeptical of private equity and venture capital firms who make investments in cryptocurrency. 

How Capital Markets Can Overcome Challenges in 2023

Overcoming economic uncertainty and the rise of misinformation in the markets is no easy task. How are capital market fintechs succeeding? Some providers choose to outsource capital market CRM integrations with a reliable fintech development partner. Others are looking at the top tech stack trends for capital market fintechs to see how they can best use their resources. 

The five trends all capital market providers need to pay attention to are:

  • Maximize your use of CRM
  • Lean into artificial intelligence
  • Build out critical integrations
  • Take advantage of open finance
  • Embrace the cloud

Whether you’re looking for a fintech partner to capitalize on these trends or can manage tech stack optimizations internally, these five trends are vital to capital market fintech success in 2023. 

Maximize Your Use of CRM

Most capital market vendors rely on customer relationship management (CRM) software to manage their client relationships and deal flow. However, many providers do not use CRM to its full potential, resulting in lost opportunities and inefficient workflows.

Besides understanding how CRMs play a critical role in the capital market industry, providers need to understand all the available technology that will put them in front of their competition. For example, using tools to collect consumer data that automatically feeds into the company’s CRM system. This provides vendors with the most up-to-date information on their clients and interested investors. 

Lean Into Artificial Intelligence

As artificial intelligence (AI) begins to enter the mainstream, more and more fintech companies are looking to capitalize on its potential. Capital markets can take advantage of AI in a variety of ways, including:

  • Predictive analytics: By analyzing large data sets, AI can identify patterns that humans are not able to see. This can give traders a significant edge in the market, allowing them to develop and execute trading strategies built with the help of AI. It can also identify and manage risk, helping firms avoid potential losses and protect their bottom line. 
  • Personalized recommendations/financial advice: AI is also used to help manage portfolios. By analyzing data and making recommendations, AI can help investors make better decisions about where to allocate their assets.
  • Fraud detection: AI is also used to detect fraud in the capital markets. By analyzing data, AI can help identify suspicious activity that humans are not able to see. This can help firms avoid costly losses due to fraud.
  • Client engagement and personalization: AI can score how often employees are reaching out to contacts/clients. This helps with internal coaching and training on fostering relationships with consumers. 

Build Out Critical Integrations

Capital market SaaS companies want their CRM to be the single source of truth, allowing them to log in to their CRM dashboard and have access to all customer information in one location. For this to happen, they need integrations to abstract information from all locations and manage different processes. 

This means capital market vendors may need integrations to different fund management platforms or data providers. In order for it to work seamlessly for the consumer, all apps and data sources need to work and “play nice” with others. 

For example, PitchBook and SPS are two capital market platforms that integrate with CRMs, like DealCloud and Salesforce.

Without a smooth integration, capital market providers will not keep up with the competition, which is critical to keep individuals invested in their products and services. 

Take Advantage of Open Finance

Open finance is the growing trend of financial services built on open platforms. This trend is driven by the rise of new technologies, change in investment habits and the increasing demand for transparency and openness in the financial sector.

Capital market fintechs need to know that:

  • Open finance could pose both opportunities and/or threats to traditional capital markets. This is not something capital market providers can avoid, rather they just need to be aware of how this will impact them. 
  • Consumers want to invest on mobile devices. Using open finance platforms, like Acorns, creates more options for clients to have a hands-on approach to their investments.
  • Open finance allows quicker and easier transfer of funds. Capital market applications that work well with banks (i.e., invest in critical integrations with banking platforms) will reap the benefits when it comes to transferring funds. 
  • Investing in integrations with fintech companies will give you a competitive edge. Capital market technology providers who choose to invest in integrations will find more opportunities than threats regarding open finance platforms. 

The trend of open finance will likely grow in popularity as more financial institutions adopt open platforms and technologies. This will provide opportunities for fintech companies to develop innovative solutions that address the needs of the ever-changing capital markets.

Embrace the Cloud

The cloud is no longer a new or emerging technology—it’s here to stay, and it’s time for capital market providers to embrace it. Cloud storage plays a critical role in making sure your capital market fintech has access to data, which can drive better decision-making and deliver enhanced insights.

The cloud offers a number of advantages that make it ideal for the financial industry and capital market vendors, including scalability, flexibility, and security.

  • Scalability is one of the biggest advantages of the cloud. With on-demand resources and pay-as-you-go pricing models, you can easily scale up or down as needed, without having to make a large upfront investment. This is perfect for fintech startups that are constantly iterating and evolving their product offerings.
  • Flexibility is another key advantage of the cloud. With a variety of deployment models (public, private, hybrid), you can choose the option that best fits your needs. And if your needs change over time, you can easily switch deployment models without incurring any major disruptions.
  • Finally, security is a top priority for any financial services company handling sensitive customer data. Thankfully, the leading cloud providers offer world-class security features and compliance with industry regulations. When combined with best practices like encryption and user authentication, your capital market can feel reassured that the data is safe and secure in the cloud.

Facing industry challenges isn’t something capital market providers should shy away from—whether they implement their own technology plans or they outsource capital market CRM integrations. For providers who want to stay competitive in the financial industry, following these five tech stack trends for capital market SaaS companies is key to exceeding your goals. Let Core10 help take the hard work off your plate and design the solutions that will help your capital market clients increase the number of transactions with ease.

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