The Future of Finance Is Now

The Future of Finance Is Now

The future of finance has already begun. Financial market players must act now. That’s why we continuously feel the pulse of the market and invest accordingly in employees and technology.


What Does the Future Look Like for Finance?

Extraordinarily rare is the person who can truly predict what the future holds in store, but sometimes a look at the present is all it takes to recognize arising opportunities. The financial industry is at a critical juncture and must come to grips with radical change. Business models are changing practically by the week, and all actors without exception currently find themselves at a crossroads. They are on the lookout for ideas on how to continue generating growth.

Many of the new ways of thinking are rooted in new technologies, infrastructures and data. The challenge is to utilize their full potential to tap new customer segments. We at SIX are working closely with our clients to futuristically transform the financial markets of today.

Future of Finance Reports

Growth: Optimism Builds across Financial Markets

Growing levels of optimism among respondents are reflected in how companies view their respective positions for growth over the next three years. Globally, a considerable 64% of companies feel they are strongly positioned for significant growth – up meaningfully from 51% in 2022 (see graphic below).

Businesses headquartered in Switzerland, Singapore, and the US are most bullish on their prospects for growth, with 72%, 71% and 70% of respondents in these regions, respectively, stating they are strongly positioned. While companies headquartered in the EU and the UK are somewhat less optimistic, they are by no means pessimistic.

How Do You Assess Your Position for Growth?

Front Office Is Front of Mind as Data and Analytics Evolve

As data and analytics capabilities continue to grow increasingly sophisticated over the coming years, it appears financial institutions believe the front office stands to benefit the most from these advancements. Almost half of executives see emerging data and analytics capabilities providing the front office with the greatest benefits over the next five years.

This is further reflected by where companies anticipate allocating the most financial resources on data and analytics moving forward. Market and pricing data – used predominantly to inform front-office decisions – is where respondents feel they will see the largest increase in spending, opted for by 43% (see graphic below). Within the capital market industry, the wealth management and the asset servicing sector hold this view most strongly, with 49% and 44% expecting to increase their spending in this area, respectively.


Where Do You See the Biggest Increase of Spendings for Data and Analytics (Top 3)?

Pick up to three answers

Technology: The Age of AI

It will come as no shock that integrating artificial intelligence (AI) in its different forms or subsets is now the primary focus for financial market institutions, with almost half (48%) of respondents citing it as a top priority over the coming three years. Indeed, only 6% of respondents do not expect their company to meaningfully incorporate AI as a tool within this time frame.

For companies that are focusing on AI, faster and more accurate data analysis for better decision-making is seen as the area in which it will deliver the most client value, with well over half (55%) of respondents taking this view (see graphic below). The asset management, asset servicing, and investment banking sub-sectors feel this most strongly, chosen by 58%, 57%, and 56% of respondents in these fields, respectively. Increased cost savings and operational efficiency, however, is the least selected potential benefit of AI in terms of enhancing client value. This may suggest companies view AI more as a strategic tool for outperforming competitors through added value, rather than merely a cost reduction technology.

Where Do You Anticipate Delivering the Most Client Value through AI Adoption in Your Organization over the Next Three Years?

Pick up to three answers

Risk and Regulations: Changes on the Radar

There are several meaningful regulatory developments ongoing across global jurisdictions. Perhaps the most prominent discussion in financial regulation right now revolves around the implications of the shortening of the securities settlement cycle to T+1 for US securities. It appears the debate will only grow louder over the coming months, as executives remain ambiguous over its potential consequences. While 47% feel it could provide a positive opportunity to automate processes, increase efficiency, and reduce costs, many also believe it will create greater operational complexity for global institutions, with 45% citing this as a possible consequence.

Looking beyond T+1, companies are increasingly looking to delve into innovations like digital assets and distributed ledger technology to fuel future growth, which will unearth new risks and regulatory challenges also covered in the Cornerstones for Growth report from SIX.

Amid this changing regulatory backdrop, the overwhelming majority (95%) feel central counterparties will have an increasingly important role to play in reducing risks in markets over the decade to come, for both new and existing asset classes. This is consistent not only across geographies, but among all institution types (see graphic below).

Do Central Counterparties Have a Growing Role to Play in Reducing Risks in Financial Markets for New and Existing Asset Classes

Asset Management
Investment Banking
Asset Servicing
Wealth Management

The Evolving Role of Financial Market Infrastructure Providers

There is clear consensus across both geographies and institutions that financial market infrastructure providers (FMIs) will become increasingly systemically important in the future, agreed upon by 91% of respondents (see graphic below). One of the principal responsibilities of an FMI is, of course, to uphold financial market stability. This is of paramount importance amid periods of pronounced economic uncertainty and geopolitical unrest, such as that witnessed over the last couple of years.

Nevertheless, there are several other areas in which respondents feel FMIs can deliver meaningful value moving forward. When questioned where FMIs can offer the greatest value over the next three years, there was a fairly even split among respondents. Offering access to cloud-based infrastructure ranks highest, with a share of 26%. This is followed by several other mentions ranging from 23% to 24%, including data and analytics capabilities.

Do You Believe that Financial Market Infrastructure Providers (FMIs) Will Become More Important in the Future?

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Further Glimpses into the Future

DeFi, DApps, and the Like: How the Financial System Is Becoming Decentralized

Now that the word “blockchain” appears to have crept into everyday parlance, neologisms like “DeFi” and “DApps” are going around these days. Find out in this blog post what they mean and how they’re changing the world of finance.

Data Facilitates Markets

The importance of data goes beyond just being a source of income: Data links different businesses and even industries together. Read how data creates transparency, makes processes more efficient, and enables growth.

What Is This Metaverse Thing Anyways? And What Does It Mean for Banks?

At least since Facebook changed its name, the term has been on everyone’s lips: the metaverse. What’s it all about? What do NFTs have to do with it? And what does it all mean for banks?

Exchange-Traded Art: Can We All (Co-)Own a Picasso Now?

For a minimum of 100 euro you’re in luck: the Liechtenstein-based ARTEX enables you to co-own works of art and to trade shares in them. Read below why not even blockchain technology is needed for this and why reliable traditional clearing and settlement mechanisms are used instead.

Open Banking: Taking a Wait-and-See Approach Can Get Expensive

The initial obligation to open banking has now turned into a dynamic international competition. Sven Siat, Head Connectivity in the business unit Banking Services of SIX, explains why reluctance will not pay off also for the Swiss banks: Those who do not provide up-to-date programming interfaces in the future will not have a lasting business model in the long run.

Wealth Management in Change: 4 Competencies the Industry Needs to Build for the Future

Like other business areas within the Swiss financial center, wealth management is facing major challenges. What adjustments to the business model are necessary? Find out which competencies will be helpful in connection with data and technology.

The Future of Finance Is Now

The Future Has Already Begun at SIX

SIX guarantees stability for financial markets and keeps its promises to customers. At the same time, we constantly prove that we deliver innovation even during times of great change. The future of the financial industry is unfolding here and now before our very eyes.

The Future of Assets Is Digital

With the SDX digital exchange, SIX is building a fully integrated, trading, settlement, and custody infrastructure for digital assets in a regulated environment based on distributed ledger technology. This now also includes services in the area of decentralized finance, or DeFi for short. SDX Web3 services are directed at institutional clients and are concentrating initially on the largest applications in DeFi: cryptocurrencies, NFTs, and other asset tokens.

ESG Data: Already Indispensable in Investing Today

Investors are increasingly inquiring about how their investments or portfolios align with ecological, social, and ethical aims. However, reliable information on ESG (environmental, social, and governance) criteria is vital in the future not just for investment consulting, but is indispensable also for risk management and financial institution compliance. Sustainability criteria and transparency regulations for securities issuers and financial products are constantly becoming ever stricter. SIX supports its customers by providing them with consistent and comparable ESG data, including regulatory data as well as performance indicators and special ESG indices.

New Business Possibilities with Open Banking

Open banking brings banks and fintechs together, thus enabling the co-creation of new customer-centric solutions. In other words, with the consent of a bank customer, a bank can share data with a fintech or other third-party provider. This, in turn, lays the foundation for the creation of new services with added value. We are still in the early stages of a trend that will forever change the financial industry. bLink from SIX already ensures today that collaboration and the flow of data can proceed securely, efficiently, and in a standardized way.

The Latest Finance Technology for the Swiss and Spanish Financial Centers

SIX supports national and international startup companies from the world of finance that have ideas and solutions for new services, design more efficient processes, or aim to tap new customer groups. SIX FinTech Ventures is a 50 million Swiss francs corporate venture capital fund that invests in early-stage startups around the world. This enables us to support the Swiss and Spanish financial centers with cutting-edge technologies, innovative solutions, and revolutionary business models. For independent fintech startups that are also capable of growing on their own and which meet a true customer need, SIX is a partner on equal footing.

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