Analysis of Current Challenges in Financial Markets

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Research Proposal on Financial
Markets Problems

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Table of Contents
Topic.............................................................................................................................................. 3
Background....................................................................................................................................3
Motivation and justification...........................................................................................................4
Research Aim................................................................................................................................ 4
Literature Review.......................................................................................................................... 5
Research design and method:.........................................................................................................9
The expectation on findings.........................................................................................................10
References................................................................................................................................... 11

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Topic
Common Problems Facing Financial Markets Today and How They Can Be Addressed
Background
Over the past decade, the financial market has been gone through you several changes. The
challenges are not only based on money but also the strict regulations, demanding consumers,
disruptive Business models, new technologies, and several other factors are there that have
affected the financial market a lot. For the financial market as it is a huge challenge to respond to
the financial problems of the 21st century when there is still dealing with the problems of the
20th century.
Now the question is, what are the problems that are faced by the financial markets today and how
these problems can be addressed. Here are some of the problems that the financial Marketing
department is facing. Gaining the trust of the customer, being in the competition in the market,
adapting the changes either related to social or financial, gaining the brand loyalty, challenging
the challenges, being transparent all the time, making investments in the data analytical tools,
distributing the services with perfection and several others.
These are some of the most basic problems that have been faced by the financial markets on a
daily basis. As per the statistics, it was proved that in a financial market or in the financial
industry anything can happen. But the best part about the financial market is that it easily
manages the risks and opportunities by taking the proper steps. The financial market also gets
affected a lot after the decision of business owners to deal with the clients and customers directly
by using The E-Commerce services. E-Commerce services have enhanced the usage of digital
media in terms of payments and Finance.
Due to Rapid changes in the regulations, the financial market suffers a lot. Among the entire
risks, one of the major risk areas for the financial market is the cybersecurity risk (Patel et al.
2019). As it is stated that the companies and organizations are heading towards the digital world,
so the risk of cybersecurity is also being high.

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Motivation and justification
It is for controlling the risk and the problems that the financial markets are facing today.
Financial markets are the base of the industry. We can also say that finance is something without
which no industry can work properly, or no organization can set it up in a right a proper
direction. Hence it is very important to manage all the resources and risks in such a manner that
the financial market and The Financial Institutions get the best out of it and do not face the
problems as it is facing today.
Well, there are several measures that can be taken to get rid of this problem. As per my research,
I have gathered that the top factors that create problems for the financial markets include the
security compliance, mergers and acquisitions, BSA/AML and OFAC Compliance, cybersecurity
financial technology, third-party risk management, corporate governance, compliance cultures,
capital planning, data security, data privacy, compliances with the consumer loans and several
other factors are there that are affecting the financial market a lot. In order to get rid of these
problems, it is important to take proper actions by the financial markets.
The financial market not only places an important role for the industries to grow up but also it
affects the economy of the nation. Although, it is correct that there are several factors that need
to be considered still it is not correct to avoid the financial conditions (Sun and Xu 2018). As per
my opinion, in order to reduce the risk from the financial market, it is important to be
transparent. Transparency is something that plays an important role when it comes to saving the
financial market from the conflicts and problems.
Research Aim
According to the perspective of the financial market individual, the problems faced by the
financial market are not only because of some online factors but also there are some internal
environmental factors that affect the business and financial market a lot (Lee et al. 2019 ). Hence
it is very important to disclose the information in such a manner that it can be understood easily,
and one can take proper action to control it. For the more, it is also important to consider that
either a person or the company is having that potential to control the financial issue that is
arrived or not. The question that arises is:

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Is the financial market having the Cup is related to identify the problem and work on it
accordingly?
Some other questions that must be we searched in support of the researching question:
• What are the factors that affect financial markets?
• What are the steps that need to be taken to get rid of the problems faced by the financial
markets?
• How to address common financial market problems?
Title of the research:
Current Problems that are faced by financial markets and steps to address and rectify them
Literature Review
About:
Within an economy, there are financial markets available that are best in providing the
appropriate resources. These are the best because they are very well organized so that they do
promises to the individuals that they will be treated honestly and with full loyalty. Financial
markets are also able in providing businesses and government entities that are applicable to
capital (Cao 2019). Moreover, these financial markets also provide a source of work for the
thousands of people that are working with n a financial industry. Despite the fact that Financial
Market is having its own importance, there are several problems that industry is facing and that
are required to be worked upon.
There are so many types of problems that are faced by financial markets some of them are
discussed below:
1. The problem of security confirmation: -
Nowadays every public institution is preparing for their Annual meeting and is finalizing their
SEC filings as this is the most crucial time of the year so there are so many things that have to
look for. In the year 2017, there are so many requirements that have been brought for publicly
traded institutions whereas the problems that were in control with publicly traded institutions are

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again been highlighted. Apart from the fact that these are not matters for them to be focused but
somewhere security matters are important as much as other matters are.
2. The problem related to Union and acquisitions: - In 2017 all the things that contributed
towards the increased rate in financial institution market results in some of the things that
contribute towards higher values that improve the multiples and that include more capital also
(Ou 2018). The burden of perfect regulation, competitions throughout and succession plans that
are not that much clear and also the expectations of higher multiples let the potential sellers be in
run and active throughout the year.
3. The confirmation to BSA/AML and OFAC: - There are so many things that contribute
towards the confirmation of the business secretary act, anti-money laundering and Economic
Sanction rules for Financial Institutions. There are so many new technologies and markets were
introduced that let BSA/AML compliance challenges extraordinarily in continuous from across
industries. As in 2016, there were so many new rules issued which were along with each and
every detail which regards to the confirmatory details of BSA/AML economic sanction rules.
4. The problem related to cybersecurity: - cybersecurity is one of the most dangerous problems
that any financial institution can face. As there were so many norms that were given by central
and state regulators that let the Financial Institutions work up properly within cybersecurity risk
management policy and programs that are introduced which let the people over there to work
efficiently and without any risk (Xing et al. 2018). Moreover, the risk related to cybersecurity
was taken very seriously because it can harm any of the information presents there whether the
personal one or the professional one.
5. Fintech or financial technology: - There are so many activities and organizations with
respect to Financial Services. As we are all aware of the Automated teller machines (ATMs) of
1960 to today's online lending platforms with so many updated facilities. Financial Technology
always continues to portray them with so many great opportunities and challenges that always
shock us(McAdam 2019). Financial technologies also established a good relationship with some
of the traditional Financial Institutions, Federal and state regulators that is also an innovative
feature of these services.
Types of Financial Market:

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There are so many types of financial market. Some of them are discussed below: -
1. Stock market: -
The stock markets are those markets that sales the shares of the owner of the local companies.
The share that has been received comes with a price and the investor is supposed to make money
from the particular stock (Fan et al. 2018). Basically, it is an easy purchase of goods but the
thing that has to be considered is the choice of a correct stock that will earn profit to the investor.
2. Bond market: -
Bond market markets are market that brings the opportunity for companies as well as to the
government because it is a kind of investment that they can make (Gupta et al. 2019 ). In Bond
markets, the investor can buy goods from Companies and the amount that has to be paid of the
goods will be returned by the company in the agreed period of time with interest imposed.
3. Commodities market: -
These are the markets where both the traders and investors can meet and sale and purchase all
the commodities including natural resources such as corn, oil, meat, gold, silver, etc. For this, a
particular place has been turned into a market because the price is so unpredictable that no one
can know how much a particular commodity cost.
4. Derivatives market: -
In these markets contract, baked goods and derivatives are sold. In this, the value of the product
is fixed upon the market value of the product being sold.
Linking current result with existing literature
Since the research helped a lot in knowing the working, importance of Financial Market. Along
with it, there are several factors that came into light including the problems that the industry is
facing (Fischer 2018). With the help of this research, it can be stated that the methodologies are
required to be followed properly with transparency.
Gap: -

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There are top 04 challenges that the Financial Market faces and needs to work upon seriously:
• Successful Social Media Presence
• Evolving customer engagement
• Time to tackle trade finance
• The truth is out about challenges
A brief Statement about the challenges:
In order to get succeeded it is important to who work on all these factors. Social media platform
is a virtual world where everyone is present (Walther et al. 2018). At social media it is
important2 you take a look over all the factors that building trust and mistrust to the profiles. The
financial markets cannot ignore the power of the channels that are available at the social media
platforms. Sometimes it becomes interesting to see how a market can handle the social media
presence and use it in such a manner that it becomes a boon.
Customer engagement is one of the biggest challenges that every market face including the
financial market (Rounaghi and Zadeh 2016). When you talk about customer engagement, social
media is not only one element that is included but also there are several others like digestibility,
effectiveness, and cost. Nowadays, data mining has become so huge that every individual is
willing to get detailed information about everything. Furthermore, it has also become a problem
for several individuals to handle the engagement of customers properly and perfectly.
Trade finance is something that affects the financial market a lot. In every necessary business
change, trade finance plays an important role. There are several industries and companies
available in the market that give trade Finance much more value than other factors.
This time no one can ignore the challengers. It is important to consider all the challenges that are
coming across the ways of being successful. From the given research I found that there are
several factors that are required to be considered properly (Gourieroux and Jasiak 2018). If each
of the challenges got determined with every aspect, then it will become easier to solve it and
complete the entire task with efficiency and effectiveness. Furthermore

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Research design and method:
In order to complete the research, there are two methods that are used the first one is the primary
research that is the service and the secondary research that is the content analysis. In the primary
research that means in the surveys, the details get gathered by the individuals with the help of the
questionnaires.
Primary research (surveys):
The primary research is basically real-time research. In this research, the data is collected with
the help of the real people. In surveys, individuals get questioned about the ongoing conditions
and other factors that are ongoing. On the basis of the answers given by individuals, the reports
get prepared and finalized. This type of research is purely realistic and real-time based.
There are some common questions that the research markets must have asked themselves and
others and also give the answers. The questions are like:
• What are the major challenges?
• Why these challenges are occurring?
• What are the factors that can be taken into consideration to solve the problems?
• How to identify the problems that are occurring?
• What measures should be taken to reduce the challenges or to avoid them?
• Is there any need to accept the challenge?
• Is the financial market working properly according to the regulations and procedures?
• Are the customers happy and satisfied with the services and the working?
Secondary Research (Content Research)
In secondary research, the study gets completed on the basis of the theories and matter already
given in the books and other materials (Gupta 2017). This research is considered as the
secondary research because in this the content that is being used has already been recorded and
researched.
By using these two methods the research can get completed easily with accuracy.

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The expectation on findings
On the basis of findings done in this research, it can be stated that the financial markets are
required to collect all the adequate information regarding the areas and problems that are
affecting them. Every problem comes with a solution. Hence it is important to recognize the
problem and then work on it accordingly and that with a proper method. Every individual or
personal who is involved in the financial market must have expected a transparent answer to the
questions that get raised.
After completing the research, I have drawn this conclusion that it is important for the financial
markets to accept all the challenges and work on them accordingly. The theoretical information
given in the notes and the books are not only enough to get rid of the problems. It is important to
take some real time actions and work on every situation properly (Dutta 2019). If every situation
got handled properly then the desired result can be achieved with more ease. Additionally, the
Financial Markets will not be required to face such common problems regularly.

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References
Cao, J., Li, Z. and Li, J., 2019. Financial time series forecasting model based on CEEMDAN and
LSTM. Physica A: Statistical Mechanics and its Applications, 519, pp.127-139.
Dutta, A., 2019. Forecasting ethanol market volatility: new evidence from the corn implied
volatility index. Biofuels, Bioproducts and Biorefining, 13(1), pp.48-54.
Fan, J., Cohen, K., Shekhtman, L.M., Liu, S., Meng, J., Louzoun, Y. and Havlin, S., 2018. A
combined network and machine learning approaches for product market forecasting. arXiv
preprint arXiv:1811.10273. Fan, J., Cohen, K., Shekhtman, L.M., Liu, S., Meng, J., Louzoun, Y.
and Havlin, S., 2018. A combined network and machine learning approaches for product market
forecasting. arXiv preprint arXiv:1811.10273.
Fischer, T. and Krauss, C., 2018. Deep learning with long short-term memory networks for
financial market predictions. European Journal of Operational Research, 270(2), pp.654-669.
Gourieroux, C. and Jasiak, J., 2018. Financial econometrics: Problems, models, and methods.
Princeton University Press.
Gupta, D., Pratama, M., Ma, Z., Li, J. and Prasad, M., 2019. Financial time series forecasting
using twin support vector regression. PloS one, 14(3), p.e0211402.
Gupta, S.L., 2017. Financial Derivatives: Theory, concepts and problems. PHI Learning Pvt.
Ltd..
Lee, T.K., Cho, J.H., Kwon, D.S. and Sohn, S.Y., 2019. Global stock market investment
strategies based on financial network indicators using machine learning techniques. Expert
Systems with Applications, 117, pp.228-242.
McAdam, P. and Warne, A., 2019. Euro area real-time density forecasting with financial or labor
market frictions. International Journal of Forecasting, 35(2), pp.580-600.
Ou, J., 2018. A study of forecasting performance of alternative option pricing models on option
return and market volatility.

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Patel, D., Hiral, R. and Parikh, S., 2019. Big Data Analytics and Artificial Neural Network
Common Approach for Financial Market Prediction Utilizing Semantic Analysis. Satyen, Big
Data Analytics and Artificial Neural Network Common Approach for Financial Market
Prediction Utilizing Semantic Analysis (February 23, 2019).
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Stock Returns using ARMA model. Physica A: Statistical Mechanics and its Applications, 456,
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stationary time series analysis. In 2018 IEEE 3rd international conference on Big Data analysis
(ICBDA) (pp. 334-339). IEEE.
Walther, T. and Nguyen, D.K., 2018. Modeling and Forecasting Commodity Market Volatility
with Long-term Economic and Financial Variables (No. 1824). University of St. Gallen, School
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Xing, F.Z., Cambria, E. and Welsch, R.E., 2018. Natural language based financial forecasting: a
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