From AI hype to practical adoption: Transformations in capital markets during 2024

No reflection on the state of capital markets in 2024 would be complete without referencing the transformative influence of data automation and artificial intelligence (AI). The unbridled enthusiasm of recent years, where AI was seen as a universal solution to nearly all problems, gave way to a more focused and pragmatic approach. Firms instead began channeling AI toward specific challenges where it could deliver tangible outcomes.

The shift toward a more measured adoption of AI was first evidenced in a 2023 survey which revealed that while 64% of businesses were eager to adopt generative AI (GenAI), 62% cited skill shortages as a major hurdle. In 2024, more firms began making progress, applying AI to persistent issues such as managing unstructured data, a problem that has long impeded financial services.

Looking to 2025, firms appear better positioned to align expectations with reality. Pragmatic approaches will help create pathways for AI initiatives that deliver measurable results, while tempering idealistic hopes that often result in disappointment.

AI empowers operations teams

Once confined to data scientists and IT professionals, AI has become increasingly accessible across organizational roles. Operational teams now use AI to streamline processes, with surveys indicating that over half (56%) of firms successfully leveraged the technology for efficiency gains in 2024.

The rise of GenAI, supported by advanced large language models (LLMs), further enabled non-technical users to address complex challenges. Teams are now learning how to integrate AI into their daily workflows, enhancing productivity and solving problems without depending on specialist expertise.

Adapting to regulatory evolution

Significant regulatory swings during 2024, such as T+1 settlement cycles, the EU AI Act, and revised tax reporting rules, required organizations to adopt more flexible approaches. Many firms initially reacted to these changes as they emerged or relied on speculative preparations, exposing strategic shortfalls. However, leaders quickly recognized the operational imperative to empower teams with solutions that provide control over core processes and the ability to respond swiftly to regulatory change.

For example, next-generation tax tools proved essential in managing regulatory demands, enabling teams to better handle new tax requirements and reduce resource strain.

The persistent complexity of unstructured data

Despite advances in AI capabilities, managing unstructured data continues to challenge organizations. Although unstructured data accounts for 80-90% of financial information, only around 18% of firms can utilize it effectively. Addressing this issue requires significant work yet offers considerable opportunity.

Additionally, the adoption of scalable, user-friendly tools and robust governance frameworks has become essential. These tools ensure data can be efficiently extracted, validated, and transformed to unlock its full potential. The direction is clear; organizations that invest in such capabilities are better equipped to derive actionable insights and drive smarter decision-making.

Returning to hyperscalers and embracing new innovations

2024 saw firms gravitate back toward hyperscalers like Microsoft Azure, AWS, and Google Cloud given their ability to provide reliable and scalable services that integrate seamlessly with enterprise systems.

At the same time, emerging technologies such as vector databases and retrieval-augmented generation (RAG) gained prominence. Powered by LLMs, RAG transforms traditional knowledge bases, providing precise answers from specific datasets, provide analysis and reporting, and improve automation systems. These tools have shown undeniable potential for financial services, particularly in document verification and compliance.

Scaling excellence through operational focus

Organizations increased their investment in Centers of Excellence throughout 2024, emphasizing their expansion across multiple departments. Here, the adoption of process discovery and mining tools played a significant role, helping businesses pinpoint inefficiencies and quantify automation benefits.

Combining these tools with comprehensive automation platforms allowed firms to develop seamless, end-to-end workflows, improving operational efficiency and helping identify areas for continuous improvement and innovation.

Looking ahead

Developments throughout 2024 highlight the importance of a focused and strategic approach to technology. Firms that expanded access to AI, empowered operations teams, and integrated adaptable tools are well-positioned to excel in the coming years.

As 2025 approaches, firms must remain committed to driving innovation and sustainable growth through the intelligent application of AI and data automation. Harnessed effectively, these technologies have the potential to transform operations and create efficiency opportunities that lead to long-term success.