The 3 Pressing Challenges Facing the Capital Markets Industry in 2025

Capital markets firms are dealing with a number of complex challenges. Volatility and record-breaking data volumes are redefining the competitive landscape—but that’s only part of the story. While volatile markets can generate opportunity, they also expose growing vulnerabilities in legacy infrastructure.

In 2025, the real pressure points for capital markets firms are increasing regulatory complexity, limited data center capacity, and fragmented technology stacks. These forces are creating operational friction and reducing firms’ ability to scale effectively across asset classes and geographies.

While many institutions respond with incremental upgrades, hoping to minimize risk, this piecemeal approach is no longer sufficient. The pace and scale of disruption demands something more: strategic investment in technology that can scale with tomorrow’s demands.  Solving these challenges requires a more strategic mindset: one focused on long-term scalability, resilience, and performance.

This article outlines three of the most urgent challenges facing capital markets firms in 2025 and the infrastructure strategies needed to overcome them.

1. Regulatory Change Is Driving Up Operational Costs 

Previously-mentioned challenges such as market data volumes, data center space, and operational costs put continuous pressure on firms looking to remain profitable, as noted in our article from our time at FISD Toronto in 2024. One cause of these cost pressures in the financial services industry is increased regulatory requirements, which leads to rising operational costs. 

An article by Elixirr attributes this cost increase to the growing complexity of regulations, requiring financial institutions to up their spending on specialized technology and associated processes. The article goes on to say that compliance costs have skyrocketed, “with some firms reporting an increase of over 60% in spending since the [2008] financial crisis.”

For example, Sidley reports that the SEC (Stock Exchange Commission) has recently ruled to amend the minimum pricing increments (known as “tick sizes”) “for the quoting and trading of national market system (NMS) stocks.” Reducing the minimum tick size by utilizing more granular price increments will cause nearly three-quarters of stocks to be quoted in half-penny (i.e., $0.005) increments as opposed to the $0.01 minimum tick most prevalent today.

What does this mean for firms? According to Sidley, the change will “likely necessitate systems changes for a large number of market participants…to allow for the submission, ranking, and display of orders at more granular pricing increments.” In other words, more regulation is causing an increase in volumes by offering more granular pricing, and more volume equals higher costs.

2. Market Data Access and Data Center Space

A recent survey by JP Morgan found that, across all product categories and regions, real-time data and analytics is the most valued feature for traders, with market data access and costs near the top of the list of market structure concerns for 2025. In order to gain the insights necessary to remain competitive, financial institutions need reliable access to real-time data and market analytics (including space to accommodate servers.)

Investing in more rack space initially sounds like the easy solution to this problem, but data center space is costly, limited, and slow to deploy. Firms’ existing infrastructure can’t handle the amount of data that’s already being pushed every day—especially for certain asset classes like options, where the number of contracts has doubled since last year. This influx not only increases the risk of outages, but more data requires more resources to process at the same rate. Without that processing power, the market could move, meaning firms no longer have a true real-time view of the market and their ability to execute their strategy accurately will be affected.

Attempts to minimize data center footprint mean individual firms are managing an ever-higher volume of data with progressively less physical space to operate and expand. Many are resolving this issue by partnering with a vendor that can alleviate the burden of maintaining their data center footprint. Financial technology providers like Exegy are able to offer mutualized solutions or higher capacity FPGA-based appliances that allow firms to reduce their data center footprint while increasing their capacity.

3. Scalable and Efficient Tech Stacks

Streamlining your tech stack is about reducing the number of application programming interfaces (APIs) you need to write to, as well as the number of technologies your firm must maintain. Having a fragmented internal technology stack means you need separate teams to manage each one, all with varying levels of access due to lack of centralization. Teams are then under pressure to jockey for who gets the budget for tech upgrades, leading to internal tension and inefficiencies like duplicative work.

Every exchange operates using its own proprietary exchange protocol, which can be equated to a unique language. A specific API is needed to “translate”  each exchange protocol and make the data usable across a firm’s many applications, because not every exchange provides the same data or details about that data. As a result, each time a firm wants to trade on a new exchange, they need to invest time and resources into standardizing that exchange’s unique protocol to their internal data model/API. Exegy’s proprietary API solves this problem by normalizing (or “translating”) all exchange protocols into a single, cohesive “language” to consolidate processing and fill in data gaps. This means the client only has to write to Exegy’s API once in order to access all the unique exchange protocols, eliminating the need to establish access themselves.  Our broad market coverage increases the likelihood of support for a client’s desired market. 

Barriers to addressing the dilemma of streamlining your tech stack include:

• The complexity of integrating new technology with legacy platforms
• The high costs associated with overhauling IT infrastructure
• Quantify ROI of upgrades vs. status quo to justify financial and reputational risk

Streamlining a tech stack would require an initial lift in resources and effort, but has the potential to reduce data center footprint, increase data capacity, benefit more teams across an organization, reduce vendors, and achieve other cost-saving measures. When approached and executed strategically, upgrading your tech stack improves operational efficiency, leading to better customer service and enhanced data security and compliance as a result. Confronting this challenge relies on the combination of purpose-built, high-capacity technology and access to a broad spectrum of data—a capability uniquely offered by Exegy.

Adapting to the Financial Services Industry’s Evolving Challenges

Although the above challenges are by no means the only ones facing institutions in the financial services industry, they represent three of the most prominent concerns facing firms. Regulation costs, data access limits, and tech stack inefficiencies can only be overcome through an organizational commitment to innovation, collaboration, and strategic investment in technology. 

Effectively future-proofing your market data infrastructure in the face of these challenges relies on:

• Robust, high capacity appliances to reduce required data center space.
• Trusted managed services to offload engineering efforts related to updates, exchange-driven changes (EDCs), and upgrades, which allow engineers to focus on more specialized tasks directly related to their trading strategies.
• The ability to easily scale data access and management processes in order to break into new markets and asset classes.

Staying competitive in 2025 and beyond depends on how well your firm can adapt to infrastructure and regulatory challenges. By partnering with a trusted provider like Exegy, you free up your team to focus on what matters most—alpha generation, not system maintenance.

Ready to go deeper? Explore our Guide to Market Data Basics for US Equities or contact us to see how Exegy can support your trading infrastructure.