AT A GLANCE Enormous opportunity arises when established capital markets (CM) players such as investment banks collaborate with young financial technology (fintech) compa- nies—but the potential is far from being realized. According to our analysis using Expand Research’s Fintech Control Tower, the entire CM ecosystem, including banks, must take action now to gain considerable benefits. Capital Markets Fintechs Are Relatively Underfunded Of the roughly $96 billion in venture capital funding that has been raised since the turn of this century, only about $4 billion (or approximately 4%) has gone specifical- ly to CM fintechs. This is partly due to the highly specialized nature of the sector, which makes it harder to penetrate—even for brilliant startups—than either the retail or the commercial banking sectors. The Promise of Fintechs Fintechs can help build capabilities that enhance client relationships, reduce costs, and facilitate regulatory compliance. But to really take off, they must also overcome barriers. These include the complexity of many banks’ and asset managers’ IT landscapes, the lack of management bandwidth to both innovate and comply with myriad new regulations, and the need for standards to build effective solutions. 2 Fintech in Capital Markets