The study suggests that the stock exchange consolidation happening today is a precursor to migration by exchanges into the traditional world of investment banking. As public companies, exchanges will increasingly look to the investment banking business to drive profit growth, says the report.

Peter Horowitz, managing director of Bearing Point financial services says the list of the top 10 investment banks and brokerages has changed every 10 years due to consolidation and heightened competition from commercial banks.

But during the next 10 years, exchanges will be added to the list of big investment banking and brokerage players.

"We can expect to see an even more dynamic shift over the next 10 years as exchanges, which are searching for profits and growth more aggressively than ever before, muscle their way onto the playing field," he says.

The merging of exchanges could also lead consolidation of clearing and back office functions, which would become utility businesses, says BearingPoint.

As a result of the threat, Horowitz says sell-side firms will begin using technology to both capitalise on alternative revenue opportunities and identify new ones.

Capital markets firms will need to use technology to formulate more detailed client profiles than ever before, says Bearingpoint, enabling companies to deliver highly-customised products and services to more effectively meet client needs.

Chris Formant, executive vice president, global financial services, BearingPoint, says: "The capital markets industry will combine customer data and technology to create 'designer' investment vehicles to serve individual client needs."

The study also predicts that middle and back office functions will be reconfigured into massive processing utilities, leaving capital markets firms focused on the front end, and as larger firms require more nimble IT support, service oriented architecture will become essential.