Emerging markets could grow at twice the rate of advanced economies, finds research by PWC, with the UK, France and Italy likely to be overtaken by Mexico, Turkey and Vietnam; while African and Asian markets are both forecast to outperform Europe and the US by 2050. 

Goldman Sachs’ research suggests emerging markets’ share of the global equity market will rise significantly in the years to come and is expected to overtake the US’ market share by 2050. Currently comprising around 27% of the overall market, their proportion of global market capital is forecast to grow to 35% in 2030; 47% in 2050; and reach 55% in 2075, with India leading the march driven by rapid growth in GDP per capita. China and Indonesia are also experiencing rapid economic growth, with China forecast to generate 20% of the world’s GDP by 2050. 

As PWC observe, more than 85% of the global population is located within emerging markets. Almost 90% of under 30s call these markets home. These demographic factors present challenges and opportunities for the financial sector: digital natives have expectations around transacting and interacting; around self-service, automation and digital tools.

Now is the right time for the financial industry to rethink its digital services and applications - how to deliver them at scale, and how best to engage with new markets within which it will trade, collaborate, connect and grow.  

Many financial organisations are already making strategic changes to benefit from being part of the hyperconnected global economy. They face the challenge of investing in capabilities and tools which, they hope, will futureproof their business – but at the same time they’re facing the unknown, trying to prepare for the rapid pace of digital and technological change and predict the platforms and applications that will deliver the best customer experience in months and years to come. 

When we talk to our financial customers about this challenge, we advise them to secure the digital foundation which will act as their springboard for growth. This foundation underpins their entire business – it’s the difference between a progressive, thriving organisation and one that’s reached a standstill, and it’s built on three tenets – connect, protect and diversify. 

1. Connect

Digital infrastructure is the integrated IT network which forms the foundation for tech delivery. At it’s best, it’s an interconnected superpower linking economies, societies, developed and emerging markets together, seamlessly. A conduit for the rapid, secure transfer of business-critical data, the financial organisation’s futureproof digital network is a complex grid connecting servers, applications, desktops and devices. These connections allow people, technology, environments and systems to work together – to communicate, collaborate and share data, ideas, processes and intelligence. Now, there’s a range of different software-driven, network-as-a-service connectivity options so businesses can build their future networking needs, customised to their organisation. 

The cloud is a critical part of an organisation’s digital infrastructure, and connecting to a cloud environment in a fast, secure, agile way is one of the best ways to futureproof your business. It’s flexible and scalable, so it integrates perfectly with organisations’ strategies to explore opportunities presented by emerging markets. 

Like all great technologies, cloud’s capabilities are advancing, and so are the benefits it brings to your financial organisation. For example, while businesses may not be aware exactly how applications will perform in a cloud environment, progressive financial organisations are eliminating risk with ready-made solutions from vendors which allow them to ‘lift and shift’ different workloads and applications in the cloud, quickly and easily. Similarly, capital markets rely on access to unprocessed multicast market data, but transmitting this to the cloud is complex.  Now, tech collaborations are delivering raw multicast market data directly to cloud environments, in its original format.  

2. Protect

Managing, storing and transferring vast amounts of sensitive personal and financial data is a burden that weighs heavily on the financial industry, particularly as cybercrimes become increasingly complex and sophisticated and regulatory penalties rise. For financial firms seeking opportunities presented by emerging markets, security is front and centre of their technology stack. 

At the same time, the acceleration of AI use cases across the industry is causing IT leaders to rethink security strategies. Our latest IT Priorities research found respondents from the financial services industry cited improving security (selected by 41%) and adding AI or machine learning capabilities (chosen by 36%) as their two highest priorities, while another report found 62% of financial services organisations are already using AI, including generative AI and machine learning. 

As the IMF’s Global Financial Stability Report 2024 cites, the risk of ‘extreme losses’ as a result of cyber incidents is rising. The direct monetary impact of these losses has been quantified at $2.5 billion, quadrupling since 2017, with further indirect losses (reputational damage and loss of confidence in an organisation, for example) escalating this figure ever higher. As organisations connect with different markets to drive new opportunities, they must make sure the same robust security measures protect their data from harm. 

Technologies like Secure Access Service Edge, or SASE, combine software-driven network services with advanced security features and security functions, while zero trust security requires stringent identification for anyone trying to access a corporate network. One study found the majority of financial organisations they interviewed – 61% - were using zero trust in 2023.  Larger companies were more likely to have implement zero trust solutions, with three out of four companies with 5,000 to 9,999 employees having zero trust in place. 

Security in the cloud is often cited as a key driver for financial organisations’ cloud migration. It’s  widely deemed more secure than on-premises hardware; it incorporates a set of policies, best practices and controls, and it’s generally encrypted. And, security investment is made by cloud providers themselves, creating a cost-effective, secure environment for financial organisations exploring emerging markets. 

3. Diversify 

Diversification refers to the spreading of risk and increase of options. It’s the same in digital infrastructure. Diversifying network connectivity provides additional back-up routes. 

Financial organisations managing expansion into emerging markets will benefit from exploring diversification with their network providers. It’s a topic we talk about with our customers, particularly when the conversation turns to subsea. Subsea cables carry 99% of the world’s internet traffic, and financial organisations rely on their speed and low latency. Many select subsea routes as the shortest point-to-point connectivity options, and add resilience with vendors’ security a back-up route to protect against vulnerabilities. We talk about three kinds of diversity:

• Providing diversity on a single route: for example, the transatlantic subsea route, which offers one or more alternative cables under the Atlantic, providing resilience along the same route in the case of cables perhaps damaged by fishing anchors or seismic activity 

• Diversity in terms of geographic routing: this is where we’d look at rerouting network traffic through a different subsea cable which takes an entirely different route but lands at the same landing station

• Diversity around cable landing stations: a transatlantic subsea cable would traditionally land in one cable landing station. Diversity provides multiple routes to another landing station, in case access to the first is disrupted