What Investment, UK: Cognizant’s Head of Banking And Financial Services, UK & Ireland Says Led by Automation, Investment Banks are Experiencing Digital Disruption

“While the core services around equity, debt, structured finance and M&A will endure, many of the ‘low touch’ activities carried out by investment banks are being commoditised by technology,” says Abhijit Deb. “Thanks to automation, the next 10-15 years may present a vastly different landscape, in which only the most highly customised, ‘high touch’ services are handled by humans.” Excerpts:

“People’s interactions with their banks have undergone an extraordinary transformation but technology has dramatically changed the age-old relationship. However, compared to typical high street interactions, the investment banking landscape has always been markedly different, sustained by services such as capital raising and M&A advisory.

Technology in our view has heralded the arrival of a ‘storefront’ model in investment banking, something usually associated with the retail banks. The defining factor of this is the level of personalisation provided, in this case, to institutional clients, high-net-worth individuals and even sovereign entities.

We are seeing specialist investment banks without a retail arm become sophisticated ‘virtual windows’, through which clients of all risk profiles and needs will be able to shop for services.

As this model gains traction, institutional clients will also be able to ‘test-drive’ trading portfolios and other products with simulated returns. This access to sophisticated software that banks provide their clients gives them an additional incentive to buy.

Moving away from a world of bland trading and towards more tailored offerings may result in a bigger shop window with more products than retail banks, but the impact will be similar as technology simplifies the buying experience for institutional clients. This is undoubtedly a seismic shift for the industry.

Whatever the speed of transition and style of delivery, they must remember that the primary goal is to provide customers with the most intuitive service possible.”

Click here to read more.