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​What Does the Future of Investment Banking Look Like?

Posted on September 2023

Future of Investment Banking

The investment banking and securities dealing market has always been a dynamic, so it's important to plan for the future and understand the trends and developments that will shape the industry in the years to come.

Research shows that the average investment banking and securities dealing business in the US now employs more workers than it did five years ago, implying steady growth throughout that period. However, organizations can now expect employment in the industry to grow at a faster pace than the average occupation due to the current demand for investment bankers’ expertise.

As investment banks respond to economic shifts and banking trends supported by technology, transformation drives this sector and will shape the future of investment banking. Here are some of the latest trends that are set to revolutionize the investment banking world:

Digitalization

As the impacts of the pandemic fade, bankers and investors are expected to continue future-proofing their businesses by transforming their digital strategy to adapt and reflect modern-day life and operational risks.

In response to the pandemic, digital platforms have already been enhanced to ensure that operations can continue without interruption in any scenario. Banks are continuing to modernize by providing clients with efficient delivery of deeper insights and analysis thanks to new technology.

With rapid advancements taking place in artificial intelligence, machine learning, and automation, investment banks are now looking to find new ways to leverage these technologies to streamline their operations and improve efficiency even further.

Change in the workplace

A recent study shows that an increasing number of investment banks are embracing a hybrid work model as young banking professionals re-examine their work-life balance. In 2022, Wall Street banks announced that they were allowing 10% of their workforce in the US to work from home remotely in response to the change in generational preferences.

As studies show that emerging talent prioritizes flexible working over attractive pay, investment banks that decline to offer any form of flexible working will likely see staff departures accelerate and find it more difficult to attract the best industry professionals.

In the future, investment banks will need to expand their search for exceptional investment talent to compete with other banking sectors. To retain banking talent, organizations should think of ways to provide staff with an improved work-life balance and flexible working options.

Also explore the compensation trends in the investment banking industry.

Customer expectations

Current gaps between customer expectations and investment banking’s current capabilities will close as more advanced technology is implemented, benefiting customer satisfaction and retention.

ATMs and online banking channels have already replaced the need for human operations with 100% automated accuracy. As digital banking adoption continues to grow in the investment world, investment banks can interact with clients virtually for a superior customer experience.

Digital technologies better engage with clients as investment bankers can address the market needs of today, predict their client trading activity, and model client behavior.

The future of investment banking

Faced with economic challenges, new consumer expectations, and emerging technology, the future of investment banking looks different from today. However, while businesses continue to face these unique challenges, the demand for risk and investment expertise will continue to drive the investment banking and securities dealing industry.

Whether you are a professional looking for your next corporate or investment banking role, or a hiring manager looking for the industry's best talent, get in touch with Selby Jennings today.