Investors will likely continue looking to private markets for alternative investment opportunity.
Financial services industry outlook key takeaways
New rules require insurance companies to disclose the use of AI in decision-making processes.
Asset managers, exchanges and broker-dealers are targeting individual retail investors more.
Financial services trend #1: Strategic partnerships pave the way for capital markets innovation
Capital markets organizations are increasingly adopting strategic partnerships so they can fulfill customers’ growing demands for more niche investment products, instantaneous services and around-the-clock market access. Exchanges, clearinghouses and broker-dealers are entering into partnerships to support 24-hour trading, access to private company shares and digital asset exchange-traded funds (ETFs), among other services.
Strategic partnerships are expected to increase as capital markets organizations ramp up investment in artificial intelligence for improvements in both client service and operations. Outsourced technical resources, cloud infrastructure and computing power are essential to develop effective AI models.
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Strategic partnerships pave the way for capital markets innovation
Capital markets organizations are increasingly adopting strategic partnerships so they can fulfill customers’ growing demands for more niche investment products.
Financial services trend #2: Embracing artificial intelligence responsibly in the insurance industry
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Embracing artificial intelligence responsibly in the insurance industry
Embracing artificial intelligence responsibly is becoming increasingly important for insurers.
Prioritizing the responsible use of artificial intelligence allows the insurance industry to navigate complexities, mitigate risks and unlock potential for innovation and growth. AI's rapid transformation of the insurance landscape offers immense opportunities and significant risks, particularly in underwriting, claims processing and customer service.
Addressing biased and discriminatory practices is now a top priority for regulators and industry leaders. For many insurance companies using AI, developing a responsible AI framework will be crucial for maintaining fairness and transparency.
Financial services trend #3: The rise of retail-friendly investment products
The current macroeconomic environment, paired with changing investor preferences, is creating new opportunities for all stakeholders in the investment world. Asset managers, exchanges and broker-dealers are increasingly launching innovative products targeted not only at traditional institutional investors but also at individual retail investors.
For investors, these innovative products, such as retail private equity funds and exchange-traded funds (ETFs) focused on digital wallets, can help meet their changing expectations and growing demand for diversification. For fund managers, such products help penetrate untapped capital pools, expanding their addressable market.
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The rise of retail friendly investment products
Retail-friendly investment products are becoming more popular.
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