As societies continue to emerge from the COVID-19 pandemic and face new challenges, we are undergoing a fundamental transformation of global capital markets. Amid the universal acceleration in digital innovation, industry leaders must think critically about changes to the underlying structure that will support the future of capital markets.

With digital innovation as a core focus of the financial industry, this transformational moment for markets demands a reevaluation of the historic roles of market participants. We need to rethink a new compact between investors and intermediaries, incumbents and new companies, finding new ways to collaborate and partner, while still competing and disrupting.

We are finding there are more opportunities for established institutions to integrate capabilities with FinTechs to accelerate the innovation cycle. Emerging, high-growth FinTechs are building platforms that often provide complementary services to those offered by legacy players. As an example of the scale: 250 of the top private FinTech startups around the world raised a record $73.8 billion in aggregate funding over the past five years. Market incumbents should think creatively about building out their own advanced technological capabilities, while also embracing the innovation happening externally, to create common value for clients and the industry.

We are finding there are more opportunities for established institutions to integrate capabilities with FinTechs to accelerate the innovation cycle.

One of BNY Mellon’s ultimate aims is to serve as the central orchestrator of capital markets by embracing technology, curating and collaborating with the best innovators from across the ecosystem. To do this, we are going to use our technology, trust, and long-established relationships to deploy the following strategies:

• Embrace an open, data-centric operating model: Data has emerged as its own asset class, which BNY Mellon views as a connective tissue among the investors, industry providers, and other partners. Our data alliances and integrations have helped clients realize incredible operational leverage through a data-powered investment ecosystem.

• Build and scale new capabilities for the market: The world’s leading organizations are investing more capital and their best talent to capture the opportunities inherent to this transformative moment for markets. The very best institutions are learning to drive innovation at scale, beyond one single product or system, and operate with the mentality of a FinTech firm, in order to deliver a superior client experience.

• Take a fresh perspective on collaboration and partnership: Banks of the future will deeply integrate external technology, along with continuing to build world-class capabilities themselves. Through innovation and collaboration, incumbents can provide the security and discipline of a well-established institution, while operating with the business model and agile mindset of a startup. For this reason, major firms including ours have a dedicated digital partnership team. We are focused on identifying opportunities to invest in, collaborate and integrate with, and help grow, some of the world’s cutting-edge FinTechs.

As capital markets continue to evolve, the financial industry should lean into collaboration with the FinTech world and even with competitors. Collectively, when approached in the right way, we can orchestrate opportunity in financial markets, together.