Bloomberg’s survey of market participants showed that geopolitical tensions are a top concern for 34% of respondents, followed by supply chain vulnerabilities (19%) and risks related to artificial intelligence (AI) and cybersecurity (19%).
Key points:
- Firms struggle to assess traditional risks like market liquidity, with mixed views on its current state: 43% see no change, 18% see worsening conditions, and 23% see improvement.
- Nearly 32% of respondents are using AI in the front office for automation and faster insights, signaling a growing competitive divide as early adopters gain advantages in efficiency and trading.
- Streamlining trading workflows is a priority, with 36% emphasizing better execution through real-time bond pricing.
The survey underscores the financial sector’s increasing reliance and need for AI, real-time data, and advanced risk management solutions to remain competitive in volatile global markets.
Jo Burnham, Risk and Margining subject matter expert at OpenGamma, said in emailed commentary: “The survey suggests that investors know that they need to expect the unexpected, by arming themselves with smarter risk management insights. Three years ago, would many people have predicted that Donald Trump would be returning to the Presidency in early 2025, with long-term wars raging in both Europe and the Middle East? This is why liquidity risk management practices are now so important. I see this being a big theme for market participants next year – ensuring that they are operationally resilient. Being able to navigate margin requirements and optimize the ways that they are met is so important in a volatile geopolitical environment, which inevitably permeates through to financial markets.”
Bjorn Sibbern, global head of Exchanges at SIX Swiss Exchange, said in emailed commentary: “On the secondary markets front, liquidity fragmentation remains a pressing issue. By the end of next year, exchanges will need to have made significant strides in venue innovation, not only to retain institutional flow but also to foster greater retail participation. Short and sharp bouts of market volatility, as we saw this year with the global equity sell-off in August, could also shape the trading landscape.”