{"id":3040,"date":"2023-07-10T10:00:00","date_gmt":"2023-07-10T17:00:00","guid":{"rendered":""},"modified":"2026-04-09T08:57:11","modified_gmt":"2026-04-09T15:57:11","slug":"the-era-of-generative-ai-driving-transformation-in-capital-markets","status":"publish","type":"ms-industry","link":"https:\/\/cm-edgetun.pages.dev\/en-us\/microsoft-cloud\/blog\/capital-markets\/2023\/07\/10\/the-era-of-generative-ai-driving-transformation-in-capital-markets\/","title":{"rendered":"The era of generative AI: Driving transformation in capital markets"},"content":{"rendered":"\n

It\u2019s the dawn of a new era in capital markets. The excitement from our industry ecosystem is almost palpable, unlike any other response to new and emerging technologies that we have witnessed in the last couple of decades. And it\u2019s not as though capital markets firms are unfamiliar with AI. Traditional AI\u2014that is, what we\u2019re now calling AI-based solutions before the arrival of generative AI\u2014has seen sophisticated adoption across the industry value chain for several years. But the new era of generative AI is different, and the promise is huge, primarily due to the perceived potential of generation<\/em>, as the name suggests.<\/p>\n\n\n\n

In this blog\u2014the third in a series following Bill Borden\u2019s post on generative AI in banking<\/a> and Sasha Sanyal\u2019s perspective for insurance<\/a>\u2014I\u2019d like to share our perspectives on generative AI garnered from our work with capital markets clients in recent months as they seek answers to essential questions, such as: What are the benefits and key use cases? What are the current constraints? Are my firm and my data protected? How do I even get started?<\/p>\n\n\n\n

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Reimagine capital markets firms<\/h2>

Enabling capital markets firms with a modern cloud platform to drive agility and growth.<\/p>

Discover more<\/a><\/div><\/div>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t
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The promise of generative AI across the capital markets value chain<\/h2>\n\n\n\n

We are still in the early days, but the momentum across the board has been fascinating. A recent report by McKinsey illustrates that the technology could deliver value equal to an additional USD200 billion to USD340 billion annually if the use cases are fully implemented within the banking industry. There is also potential for double-digit percentage efficiency gains as it gets to deployment and scale for certain scenarios.1<\/sup><\/p>\n\n\n\n

Just in the last few weeks there have been several news articles covering innovative examples of firms prioritizing AI to support internal and client objectives, such as: JP Morgan for trading signals (Interesting Engineering<\/a>); Goldman Sachs for powering insights (Wall Street Journal<\/a>); Morgan Stanley for unlocking the knowledge base for wealth management (OpenAI.com<\/a>); and State Street for its potential to revolutionize the firm (Forbes<\/a>). A news report from Bloomberg (courtesy Wealth Management<\/a>) lists several other examples of Wall Street firms that are considering using AI to rewire the world of finance.<\/p>\n\n\n\n

A recent survey by KPMG highlighted that, across industries, more than three-quarters of executives (77 percent) see generative AI as by far the most impactful emerging technology they will use, and 71 percent plan to implement their first generative AI solution within two years. And more than three-quarters of financial services executives see opportunities to power fraud detection, risk management, and client experiences.2<\/sup><\/p>\n\n\n\n

The art of the possible for generative AI in capital markets<\/h2>\n\n\n\n

Consider, for example, a typical \u201cday-in-the-life\u201d for key roles in a global markets firm, depicted as follows:<\/p>\n\n\n\n

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