Retail investor engagement continues to be an area of focus for financial services organizations.
Financial services industry outlook key takeaways
Fundraising pressures are driving part of the consolidation boom.
Extended trading hours will bring more opportunities to act immediately, which could create volatility.
Financial services trend #1: Capital markets industry outlook - Summer 2025
In 2025, retail investor engagement through innovative products continues to be an area of focus for financial services organizations. In particular, event contracts—once prohibited instruments in the United States—are gaining popularity in the U.S. after being permissible for years in the United Kingdom, where they are regulated as financial derivatives.
Event contracts are binary contracts enabling investors to speculate on the outcome of specific occurrences such as political elections, sporting events or changes in key economic indicators like year-over-year inflation rates. These contracts typically have short-term, defined expiration dates and allow investors to speculate on, for example, whether their favorite sports team will win their next game.
Financial services trend #2: 24-hour trading implications for capital markets
The New York Stock Exchange (NYSE) is planning to extend trading hours on its Arca exchange to 22 hours a day. This shift aims to provide investors with more on-demand access to the stock market, potentially increasing volatility and changing trading dynamics. The move is expected to be approved despite regulatory delays, and other market players, including clearinghouses, are likely to follow suit. Organizations are advised to prepare for this shift by ensuring adequate workforce, upgrading systems, and deploying AI tools to support traders.
Financial services trend #3: Market forces drive asset manager transactions
In 2025, the industry saw record levels of merger and acquisition activity, particularly in banking, insurance, and wealth and asset management sectors. Asset managers are increasingly consolidating to innovate and expand services, driven by investor demand for diverse product offerings and larger capital allocations. However, fundraising has slowed, prompting managers to attract capital from high net worth individuals. The consolidation trend poses challenges, including higher fees and reduced choices for investors, and complexities in merging firms. Despite these challenges, the trend is expected to continue, with firms needing to adapt to remain competitive.
Global enterprise strategy
questions to get right
in future-shaping projects
Subscribe to Financial Services Insights
Sign up now for a monthly update on the marketplace trends important to financial institutions, capital markets, asset management and other financial services.
