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Trends in Investment Banking
Technology is beginning to shape every single industry and investment banking is no exception. Between fintech and regulations, this sector is advancing perhaps faster than ever. Therefore, to stay competitive, professionals must stay on top of all the current trends in investment banking.
Here are the most significant trends in investment banking right now.
A Focus on the Customer
As with any industry, the customer is key. But in the past banks have not focused on creating a positive customer experience. Only 37% of US banks even have a customer service experience program. Their priority has instead been sales and products.
But, that is slowly changing. Banks are realizing that 1) putting people first results in better business, and 2) that they are more successful with happy, thriving customers. They’re using technology to better connect and communicate with people, embracing the innovation and ease of access.
And when investment banks use this technology to exceed customers’ expectations, they reap the rewards.
Though some may be excited about regulatory rollback, it is best to approach this trend with cautious optimism. Even as some regulations are scaled back, others are being put in place.
As technology evolves, artificial intelligence and automation are stepping into the fold with models, machine learning, and tools that help banks to detect fraud and other risks. But with this advancement has come even more regulation.
Many similar restrictions were placed on businesses after the financial crisis, but things have stabilized since then. Therefore, regulations are expected to ease up as time goes on. As this happens, taxes rates are moving in favor of banks, as are interest rates. These trends could motivate banks to invest more and become increasingly competitive.
However, compliance is still a hot topic around the world and some regulations will stay in place. Professionals should not expect massive shifts involving executive accountability or fair treatment of customers, for example.
Investing in Technology
While some in the industry are skeptical of technology, it is clearly beneficial to investment banking. With the rise of cryptocurrency and cybersecurity, there is a lot of innovation for the sector to adopt.
It’s estimated that banking will invest $219 billion on information technology this year, which is a $20 billion increase from 2017. Some of this will be spent on security measures against both human and AI fraud, digitization, and artificial intelligence that can better protect the customer.
The industry can use fintech to better assist customers, protect their data with cloud computing, and more. The fact that these innovations are finally being adopted far and wide makes tech one of the most significant trends in investment banking. Fintech is definitely a sector to watch for eager professionals in the market.
A Shift in the Workforce
Tech will also have an impact on the way people in investment banking work. Just as ATMs allowed people to move away from transactional tasks and into more analytical roles, automation will continue to elevate jobs into more managerial roles.
While some employees may be initially uneasy about this and similar trends in investment banking, it is imperative to remember that face-to-face customer service is very important in this field. AI and automation will not eliminate jobs, but simply alter the nature of day-to-day activities.
This means that professionals in investment banking will want to explore technical skills as well as financial and interpersonal ones. Upskilling could be a wise tactic for both managers and employees in the field.
If you’re looking to elevate your career in investment banking, explore our job listings. If you choose to apply, one of our expert consultants will be in touch with relevant opportunities. And if you’re looking for excellent professionals to join your team, reach out to one of our recruitment consultants for aid with your search.