Capital markets firms risk disappointment by prioritizing execution over innovation

As part of the reference check process for our HFS Top 10 Capital Markets Services 2022 – Leaders and Formidable Challengers studies, we asked a mix of business and operations leaders from capital markets firms about the single most important factor when selecting their service provider.

Overall, firms strongly emphasized the importance of delivery-centric execution criteria over innovation expertise:

• Firms identified the quality of service delivery as the most important selection criteria.
• Industry knowledge and technical skills ranked a close second, as did an existing relationship.
• Given the often-lengthy processes required to onboard partners at financial services firms, finding a capabilities match with an existing partner can help fast-track initiatives.
• The bottom of the importance stack includes advisory capabilities and digital skills.

The Bottom Line: Enterprises that prioritize execution over innovation when picking a service provider may be disappointed downstream.

Capital markets enterprises indicate that the most important element when selecting a service provider is the quality of service delivery. However, this emphasis on quality of execution and the low rankings of advisory and digital capabilities as priorities reminds us that enterprises that choose based on execution criteria are often disappointed later by a lack of innovation excellence. Enterprises need to be much more intentional about their innovation needs. Service providers need to ensure innovation is a standard element of their offerings.

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