As financial markets continue to innovate and adapt amid volatility and uncertainties brought about by varying factors, chief financial officers are left with the task of ensuring they can support their organisations' needs.
In a recent report by S&P Global, it was revealed that private capital and digitalisation play a major role to ensure and enable a dynamic and scalable debt capital market.
According to the Look Forward: Future of Capital Markets research, the future's complex fundraising needs are already reshaping financial markets, as they build on a foundation that is more customised and digital yet also possibly more fragmented. Financial innovation combined with new technology can thereby revolutionise the connective tissue of markets, bringing in the potential to offer customised capital at scale.
S&P says private credit and tokenisation could provide enough connectivity between financial market participants to allow private credit to reach new levels in a world where debt capital goes digital. Meanwhile, agentic AI poses a potential to transform financial markets through more efficient decision-making and helping firms scale in complex spaces like private credit.Â
Further, it was found that private capital will play a pivotal role in funding the future of infrastructure, as it is an important source of funding for both the energy transition and infrastructure, and is needed to enable technological advancements in the capital markets.Â
Other highlights from the report that should be noted:
- Private credit is adapting its role in fund-based finance
- Asset-based finance is expanding the boundaries of private credit
- Tokenisation allows instant settlement times to highly liquid markets and can significantly shorten the typically longer settlement times of private markets
- The intersection of tokenisation and AI could revolutionise asset management and capital markets by increasing access to alternative investments, simplifying downstream processes, and automating asset and value transfer between multiple parties
- Agentic AI enables deep and wide analysis of information and can increase operational efficiency to improve productivity and save time for more value- added activities
