Matthew Hodgson is CEO and Founder of Mosaic Smart Data.

What are your expectations for 2023?

2023 is going to be the year the rubber meets the road for AI in capital markets. Banks have always had an advantage when it comes to data, and by leveraging AI appropriately they can ensure they retain this advantage as capital markets continue to modernise and become more data-centric. Amidst the backdrop of volatility and economic uncertainty across the globe, the most precious resource for a bank is its transaction records – and within this is its guide to where opportunity resides. Extracting the value from these records is no longer a nice to have, it’s a core necessity for competitive advantage.

Those that take action now will benefit from being the first past the post – they will generate more business and start to generate more data, from which they can extract more insight and continue the cycle of prosperity. As we head into 2023, the race to become data-first and deploy AI effectively is well and truly underway.

What trends are getting underway that people may not know about but will be important?

The trend of hyper-personalisation continues to permeate the capital markets industry. In a world where we increasingly expect personalisation of digital services in our consumer lives – for example recommendations by Netflix on which movies we might enjoy – clients are also demanding greater personalisation in the enterprise space.

Whereas banks typically looked at their clients by segment and tailored the information they provided to them in this manner, they are now beginning to use data-driven AI tools to look at each client as their own segment, and hyper-personalising the insights and service they provide them. This is optimised with natural language generation technology, which delivers reports such as multi-asset morning briefings in a human tone of voice with easy-to-interpret analytics. The result for the bank is increased loyalty and greater share of mind amongst clients.

What are your clients’ pain points and how have they changed from 1 year ago?

Our clients pain points have only become more pronounced in 2022. It’s little secret that many banks are struggling to achieve profitability while dealing with increased regulatory burdens and cost pressures. The drive for information-driven productivity amongst financial services institutions has never been greater.

Despite the huge size of the fixed income market, worth about $100 trillion globally, the availability of good data for banks on the deals they are making with clients is often remarkably rudimentary. This has a direct and often detrimental impact on the level of service a bank is able to provide to its clients.

Banks need to be able to answer questions like, “who are my most profitable clients?” “which ones aren’t trading with me as much as I would like them to?” and “how can I win back their business? If you were running a supermarket, you would know exactly what the answers to those questions were. But many investment bank don’t have the data in the right shape to answer these fundamental business questions.

As we head into 2023, we know that data-driven banking is no longer the future or a ‘nice to have’ – it’s the present and it’s critical. Sales and trading teams are now required to be able to understand and mine vast quantities of internal and external data, giving them a comprehensive overview of their clients’ trading activity, enabling them to make informed decisions and appropriate recommendations. It is a simple fact but worth re-stating that clients value information. Even in flow markets, salespeople that provide insights and advice generate better business from it.