Capital markets technology transformation begins with these 3 simple steps


Technology transformation within capital markets firms is a proven strategy for helping financial services professionals better address their LP and client expectations. In a recent webinar that DealCloud co-hosted with LionPoint, we shared insights from our global client base and how they managed technology transformation. In order to learn more about the technology transformation process, we first look to better understand the key trends in the market today that are driving financial firms to undergo these changes.

Trends affecting technology transformation at capital markets firms

The first trend is a growing reliance on relationships. Relationships have always been a differentiator when it comes to having the edge over your competition. But thinking that you have a solid relationship versus leveraging data to provide evidence of the depth of your relationship is the key differentiator. We’re seeing that the more successful firms are not leaving anything to chance and are becoming tech-enabled in order to bring the entire firms capabilities to the clients. Most recently, there’s been a broad, industry-wide acknowledgement that key relationships are extremely complex and there’s too many touch points to be managed in Excel or the heads of just a few individuals. Therefore, the need for a “clear view” on the firm’s relationships is driving technology transformation plans.

Mounting competition and dry powder on the sidelines is also pushing the industry to look more closely at technology solutions. It’s a trend that has persisted for a while, but what it translates into is more competition to get the right deals that meet the firm and each limited partner’s strategic parameters.

Lastly, with increasing fragmentation of the market (including spin-off firms opening each day) and countless hurdles cropping up each day (COVID-19, increased emphasis on diversity and inclusion, etc), it’s never been harder to ensure that the deal itself closes. So, the deal management component of the business has never been tougher. With management teams getting more savvy and LPs asking for details with increasing frequency, your firm’s only choice is to leverage technology that was purpose-built for you because Excel and generic tools just cannot get the job done.

Now that we’ve established the trends forcing the shift towards firm-wide technology transformation, let’s talk through the three-step process that enables technology transformation at financial services firms.

Establish a foundation

When you look at the roadmap and all the things going on at your organization, several initiatives will inevitably rise to the top. It’s also going to become apparent that there are building blocks that exist everyone will be attached to. CRM is right at the heart of this first step because it touches every single one of these mission critical functions. It’s important that the capital markets technologies selected as part of step one have an open architecture that allows for integration and automation down the road. It’s also critical that there’s an overarching data management strategy in place and that processes are developed around how the systems are used that your firm can really make that next.

Optimize the architecture

When the right foundation is in place, there can be a clear path to connecting technologies together. Professionals in the capital markets industry often speak about this as “letting the systems speak to one another” or “connecting the dots of the technology ecosystem.” No matter if your firm’s goal is to put automated processes in place that allow the organization to reduce operational risks, or if the connected nature of your technology allows you to efficiently scale, it’s important to consider the long-term architecture needs. When firms get to this phase, they seek to leverage reporting and data analytics across technology platforms. Once a solid foundation is put in place, a well-thought-out data management strategy and easily-understood processes will always win.

capital markets technology transformation
What technology transformation at your capital markets firms could result in: a connected ecosystem of platforms and data.

Address functional gaps

Of course, it’s to be expected that even the most sophisticated and well-intentioned technology architecture plan will have some gaps. Even if it’s a strong technology framework for your team today, it’s likely that as the firms grows and evolves, those needs and demands on the technology platforms in place will change, too. That’s why it’s important to always have an open mind as to how the technology can grow alongside your firm. It’s also important that prior to choosing a foundational technology, your team must assess the platform’s ability to grow and change over time. Platforms like DealCloud are purpose-built to meet the needs of ever-changing capital markets firms, and that allows teams to constantly evolve and improve their systems and processes.


10 years ago, having truly foundational technology platform for your capital markets firm was a bit aspirational. It used to be hard to picture one firm having all of their analytics, reports, models, etc. all in one centralized place. But today, these goals are being realized, and there is an established method for how to get there.

To read more about our technology blueprints for the private equity, investment banking, real estate, and credit industries, click here. To get access to your firm’s free consultation, or to learn more about the technology transformation projects we’ve completed for our existing client base, click here.




Kari Lukovics

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