During the past 18 months, many capital markets firms have shifted to hybrid or fully remote work environments; consequentially, firms’ dealmaking processes have shifted as well. Rather than storing critical data and vital deal information inside disparate hard drives of individual employees, leading private equity and investment banking firms are now turning to cloud computing software — backed by mature cloud-based architectures — as a single source of truth. Although many firms recognize the ease and scalability of cloud computing for business, the capital markets industry as a whole has yet to fully embrace this trend.
Once considered the vanguard of adopting new and advanced software, firms in the private capital markets industry are now falling behind their counterparts in the public markets — many of which have already installed AI, predictive analytics, and cloud-based technology. According to Accenture, capital markets firms remain hesitant to adopt these solutions due to security concerns, application sprawl, misalignment of business and IT, and the assumed complexity of a mass workload migration.
Although worries about security breaches and regulatory fines are certainly concerning, Forbes found that — with careful planning — enhanced security can actually drive innovation within the cloud rather than inhibit it. Furthermore, changing workflows necessitated by the COVID-19 pandemic have proven that cloud-based technology can provide firms with the agility and accessibility they need to succeed, sparking a renewed haste to implement cloud computing software at firms globally. Those capital markets firms that have already chosen to implement cloud-based architecture have discovered many benefits.
With cloud-based architecture, firms can improve transparency, accessibility, security, and communication and collaboration between their professionals and dealmakers. Custom-building a single source of truth for your capital markets firm using cloud computing for business is no longer an option: It’s a necessity.
Supporting the Complex Deal Ecosystem
The private capital markets deal ecosystem is vast and complex, and will only continue to grow more complicated as the industry further fragments. According to IBISWorld, the venture capital and principal trading industry in the U.S. has grown by an average of 10.9% per year between 2016 and 2021, making it harder for firms to keep track of new market entrants, participants, and deal sources.
Dealmakers need to easily manage relationships, follow risk management standards, access insightful reporting and analytics, and properly store and maintain data. Implementing cloud computing software allows dealmakers to do all these tasks in one shared, secure space.
Enhanced security is one of the most advantageous benefits of creating a single source of truth. When multiple individuals within your firm handle confidential and sensitive dealmaking data, you need to feel confident that this information is appropriately protected. DealCloud — the industry-minded solution created for the complex deal ecosystem and built on cloud-based architecture — recognizes the vital need to properly manage this data.
DealCloud’s user permissions feature allows only administrators — who are trained and trusted within the firm — to limit or permit access to certain data. Managers can use this feature to control who within their firm can edit, create, view, or export certain data, and at what frequency. When moving transactions through the pipeline, firm leaders can find comfort knowing that only qualified individuals can alter critical data. Similarly, DealCloud’s permissions and user groups features make it possible to permit or restrict access to certain data based on deal team and other assignments that align with conflict clearances, disclosures, and NDAs.
DealCloud users can also create custom-built pipeline dashboards, workflows, and automated reports, eliminating time-wasting work for capital markets firm professionals. Users can connect PitchBook, Preqin, SourceScrub, and other third-party data providers, helping firms further connect their technology to build a single source of truth within accessible cloud computing software.
On-Demand Resource Optimization
Another key benefit of implementing cloud-based software is that capital markets firms can offer organized and optimized resources to their individuals. Firms need to feel confident that their teams can access necessary resources from wherever they’re working, especially during this time of hybrid and remote work.
Nurturing relationships through the dealmaking process, for example, is paramount for capital markets firms to properly foster deals and identify new opportunities. However, managing relationship data can be complicated and messy without proper relationship-building tools.
DealCloud offers solutions built specifically with relationship management tasks in mind. Users can access features such as a Microsoft Outlook add-in, which lets communications — including files, emails, and meetings — automatically sync from a user’s inbox to the platform. The Relationship Intelligence tool allows this information to be further analyzed and produces key insights such as a relationship health score, providing firms with better transparency into the status of their most vital relationships.
Although proprietary data is crucial, capital markets firms also require access to third-party data to successfully build a dedicated single source of truth. DealCloud has partnered with many third-party data providers — including Dun & Bradstreet, an industry-leading provider of company data — to provide platform integrations that help firms quickly find and analyze potential investments.
For capital markets firms to remain competitive, they need to take full advantage of the benefits of dedicated cloud computing software customized for the needs of the industry. By having data and resources readily available, firms can successfully achieve greater collaboration, communication, visibility, and transparency.
Driving Client Success by Aligning with Firm Strategy
When firms implement cloud computing software to build a customized single source of truth, they’re empowered to deeply align their individuals’ contributions to their firm’s overall goals and strategies. On the other hand, firms without cohesive analytics and reporting processes ultimately risk mismanaging and misunderstanding the information presented to them.
DealCloud lets users build templated reports, allowing professionals to share updates on pipeline initiatives in a uniform manner. The software can send automated reports to appropriate stakeholders at specific times (e.g., before a weekly business development meeting), or users can access them when they need an urgent update.
Administrators can also build firmwide calendars within DealCloud, allowing the entire organization to stay on the same page with important information such as travel schedules, conferences and events, meetings, and business developments. Teams can use these calendars during weekly meetings to keep updated on and aligned with the firm’s overall progress and strategy.
By making your pipeline development strategy more focused and accessible, you also help streamline the workflow of your individual contributors. When data and relationships live within cloud computing software — with every contact, status report, sourcing initiative, and pipeline progression safely stored in one place — dealmaking becomes easier for capital markets firms.
Interested in trying cloud computing software for your firm? Schedule a DealCloud demo today.