The global financial crisis has brought the viability of the investment banking business model under scrutiny, resulting in banks struggling to redefine their roles. Therefore, evolution and innovation have become the need of the hour in the banking sector. This means that the investment banking companies that once comprised of private partnerships and focused only on specific markets and financial products have to reinvent themselves now. Technology disruption, talent wars, new business models and structures, and emerging fintech startups are creating a perfect storm in investment banking.
Let’s take a look at the top 4 trends that are shaping the future of investment banks:
Earlier, the portfolio offered by investment banks were similar to a big fat menu card of restaurants. Companies in the banking sector were focused on cross-selling and up-selling financial products and services to the clients irrespective of the client’s actual needs. There is a gradual shift in this mindset in the investment banking sector towards a more personal and specialized approach. With increased competition and several emerging smaller fintech companies, large investment banks can no longer survive by becoming the jack of all trades. Today, many investment banks are keen on focusing their efforts and resources in areas where they can make an impact. Specialization has become the key to understanding the client’s needs in the banking sector.
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Digitization has already paved the way for itself in the banking sector. Big data, AI, interactive platforms, the blockchain, and mobile technologies are changing the way of business in investment banking. Technology will help investment banks and customers to eliminate unwanted processes and intermediaries making things easier for both parties.
Mobility and Security
Mobility refers to the easy access to information anywhere, anytime, and from any device. However, as far as the financial industry is concerned, they deal with confidential user information, so the security of information is a significant concern. Additionally, there are several stringent regulations and legal policies that require investment banking companies to keep data security at the top of their checklist.
Investment banking is becoming more inclined to the thought that “Employee satisfaction is the key to customer delight.” Especially after the emergence of platforms like Glassdoor and social media, where the negative work experiences can be made public, the players in investment banking have realized that their reputation is at stake here.