Monday, January 6, 2020 Stamford, CT USA — The financial world’s center of gravity continued moving toward technology in 2019—and the acceleration of that shift will be at the center of global markets in the new year. In fact, the impact of new technology on financial firms and investors underlies the Top 10 Trends in Market Structure for 2020 from Greenwich Associates. 

Three important technology-related trends will have the biggest impact in the year ahead:

The Data Scientists Take Over: Data scientist is the new name for someone expert in programming, quantitative analysis data and (of course) data. In 2020, these individuals will take up more seats and accumulate more clout on trading desks. 

“One could argue that most if not all of the market’s evolution over the past decade has come because of access to data and the ability to put it to work,” says Kevin McPartland, Head of Research in Greenwich Associates Market Structure and Technology group. “So it should come as no surprise that experts in that field are taking over.”

RegTech Boom Drives Tech Spending: Spending on “RegTech,” or compliance-related technology tools and platforms, will peak in 2020 as financial institutions turn to automation as a way to meet new regulations without breaking the bank. Monitoring trading and related activities has been a growing priority for market participants during the last decade, with spending on specialized solutions surpassing $1 billion. Yet as the financial industry enters the 2020s, many firms still have not maximized full efficacy and cost efficiency in their surveillance infrastructures.  

“Financial firms can no longer ignore the need for proactive RegTech investments,” says Dan Connell, Managing Director, Greenwich Associates Market Structure and Technology. “The coming year will be a race against further budget reductions and see toughening competition among vendors—but the market will be better for it.”

Despite Predictions, Financial Advisors Fend Off Robo Advisors: Automation and technology have changed the face of wealth management, but wealth management will continue to have a face. Greenwich Associates data continues to show that investors of all wealth levels trust people more than they trust technology and would rather put the fate of their investment account into the hands of someone they can actually talk to. Somewhat paradoxically, however, advisors who provide not only sound advice but also the latest “wealthtech” are trusted even more.

“Even when the ultimate decision is made by the humans involved, technology provides an unparalleled level of transparency into a portfolio—what's been bought, sold, how often, and for how much,” says Kevin McPartland. “This creates even more trust in financial advisors and removes any lingering concerns that their actions are anything but in the investor’s best interest.”