The Trends Impacting the Future of Investment Banking Published in New Report by Info-Tech Research Group

The need for transformation in the financial industry has never been higher as firms prepare for new products and services.

TORONTO, Jan. 16, 2023 /PRNewswire/ - The investment banking industry is experiencing a period of high disruption that is increasingly being driven by technological change. Traditional services provided by investment banks, including trading, capital raising, and initial public offerings, are evolving rapidly due to changing market forces,

competition, and emerging technologies. To help technology leaders keep pace with the needs of the business and understand the key trends driving these changes this year, global IT research and advisory firm Info-Tech Research Group has published a new industry report, The Future of Investment Banking.

According to the firm's studies, the pace of change throughout the investment banking industry is accelerating due to customer demands, cost pressures, competitive products and services, and the increasing pace of business. These changes place new demands on IT and require technology leaders to stay closely aligned with business partners and stakeholders to ensure they play an active role in developing new products and services. 

"Traditionally, the investment banking industry was built upon personal relationships and networks," says David Tomljenovic, Head of Financial Services Industry Research at Info-Tech Research Group. "However, a relationship-driven approach to many of the core functions in an investment bank has had the effect of blocking the adoption of new ways of doing business. Competitive forces, many of which are accelerated and enabled by technology, are reshaping many aspects of the investment banking industry."

Info-Tech's report indicates that IT is often not included in new product and service development, which can be large and complex undertakings. Without early-stage involvement, IT may struggle with system design, implementation, and support, leading to additional challenges with existing systems and infrastructure. Ineffective technology governance and project management can also cause IT to become overwhelmed with the number of projects that need to be completed, leading to poor business satisfaction.

The firm recommends that technology leaders and IT departments be highly aligned with business needs to ensure they are positioned to deliver new products and services that are coming to market. Mature core IT capabilities such as data governance, enterprise architecture, and forward-thinking infrastructure design and planning are also critical to success.

With changing customer preferences and technology innovations, Info-Tech's research explores the following trends that will impact the future of investment banking:

1. New Market Development Through Innovation – Investment banks must be actively developing new markets. Increasingly, new markets are being identified, built, and operated with advanced technologies. For investment banks to succeed in new markets, they must work cooperatively across many stakeholders and business units. In order to overcome the threats represented by changes in the market and to thrive by developing new opportunities, IT should be fully engaged and aligned with the business.
2. Merger & Acquisition Innovation – According to Info-Tech's research, technology is reshaping the way M&A is executed by investment banks. This means that digital adoption has become imperative to remain competitive in new business and economic environments. As the situation progresses, M&A innovation is going to come in many forms with broad-based implications for the technology teams that must support the innovation. CIOs and their teams will need to be active participants throughout the innovation process.
3. Real-Time Systems (RTS) – Real-time systems will increasingly become a necessity throughout financial services as internal and external customer expectations drive their continued need. The transition to RTS will likely present many new business and technology challenges, with potential impact across all parts of an investment bank. Working in cross-functional teams with an agile approach will enhance stakeholder satisfaction with the transformation and help educate stakeholders to enable future RTS transformations.

The future promises more emerging technologies to come, making it critical for investment banks to establish a structured approach to innovation management now that considers external trends as well as internal processes in order to succeed in new environments.

To learn more, download the complete The Future of Investment Banking report.

For more information about Info-Tech Research Group or to access the latest research, visit infotech.com and connect via LinkedIn and Twitter.

Info-Tech Research Group is one of the world's leading information technology research and advisory firms, proudly serving over 30,000 IT professionals. The company produces unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. For 25 years, Info-Tech has partnered closely with IT teams to provide them with everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

Media professionals can register for unrestricted access to research across IT, HR, and software and over 200 IT and Industry analysts through the ITRG Media Insiders Program. To gain access, contact [email protected].

SOURCE Info-Tech Research Group

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