Fintech solutions for capital markets
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Capital markets help drive the modern economy by connecting buyers and sellers of debt across geographies. The mechanisms driving this part of the financial world have changed significantly since its genesis. Fintechs and other tech players have helped drive this transformation, leading to major changes across three key variables:
Complying with dynamic regulations
Capital markets are subject to an extensive ecosystem of regulators, especially the Securities and Exchange Commission (SEC). The regulator’s rulings can significantly affect how traders conduct their business and the kinds of due diligence they have to carry out.
Though still a fairly niche financial instrument, the question of cryptocurrency and its status as a security is a key concern affecting how capital is handled in some burgeoning sectors. Having regulatory realities and checklists integrated within cap market platform flows helps market participants stay apprised of shifting developments and remain compliant.
Expanding partnerships
Fintech solutions for capital markets can also democratize the kinds of services that smaller brokerages and firms have access to. Platforms can operate as a marketplace for other professionals, such as lawyers, accountants, and even fractional executives.
These platforms can reduce barriers to entry by letting traders focus primarily on their core work, and outsource relatively ancillary tasks to those better equipped to handle those functions.
Revolutionizing fundraising efforts
Finally, fintechs may be helping to move capital markets away from public markets and into private ones. Platforms like Percent are helping power the private credit market, and automating a manually driven $7T market.
Other players are looking at crypto and other novel financial instruments as transparent alternatives to buy and sell capital. Over time, we may expect capital markets to evolve once more—not just digitizing, but using new forms of money and market-making to help power economies.
