Technology is being used in every industrial sector and investment banking is not an exception. The whole system is being transformed with technology intervention.
The Investment banking sector is advancing faster than ever before by adopting technology in every business aspect. Robotic automation, artificial intelligence, cybersecurity, digital currencies, machine learning, and other technological innovations are changing and benefiting the industry a lot.
Automation is elevating the jobs into more managerial roles encouraging investment banking professionals to explore technical-, financial-, and interpersonal skills. Upskilling with investment banking certification is the need of the hour for professionals to gain the required competency. Leaving aside the work front, let’s investigate what the future holds for the investment banking industry from a technology perspective.
The future of the investment industry in the techno-era
Investment banking, the division of financial institutions generates capital for other firms. It negotiates merger and acquisitions, involves in market making, provides financial advice for stock issuance, trade on commodities, equities, bonds, and, etc. As per the norms, the industry was hunting potential candidates from banks or business schools.
This scenario is changing now. It is critical to update the IT operating model and meet the changing customer needs. It requires changes across the whole IT stack.
They are headhunting from outside their industry. Investment banks focus to hire software programmers, artificial intelligence (AI) experts, data scientists, cybersecurity professionals, and other techno-professionals.
Some of the significant technology areas in the investment banking industry areas briefed below.
Technology advances help the industry to access humongous data, understand what users want, use data analytics to unlock the information and provide exactly what customer wants. The ability to act in real-time to drive revenue and profitability is the need of the hour. As a result, the IT operating model is becoming a customer- and context-centered. The companies are changing their way of customer interaction to offer seamless experience by striking the right balance between humans and machines.
Advancement in robotics and AI
Robotics and AI can be used to address the key pressure points, optimize costs, and mitigate risks. The investment banking industry is targeting social and emotional intelligence, logical reasoning, identification of patterns and self-supervised learning, physical sensors, mobility, and more. Investment banks use AI to automate market data collection, predictive analytics, and trade processing.
Defining architecture to connect anywhere anytime
As the industry deals with a new class of users, it is essential to modify the systems architecture to balance control and accessibility. Investment banking professionals are using cloud-based software-as-a-service (SaaS) applications for business processes like customer relationship management, human resources, and financial accounting. They are also turning to SaaS for point solutions, security analytics, and Know Your Customer (KYC) verification. Moreover, linking customers, partners, and employees through mobile apps and wearables is also at its peak.
Cybersecurity is the theme for investment banking as investors look for security systems. To attract more investors, they are implementing protective technologies like the firewall to keep away unauthorized users, monitor traffic and audit systems, design antivirus programs, protect data through encryption, digital signatures, etc. Moreover, we find the implementation of voice metrics to improve security during telephone transactions, social log-ins, identification of anomalies, content-based identification, etc.
Technology plays a major role in all areas of investment banking including people, investors, human resources, security, research, and trading. Therefore, IT opportunities in investment banking are increasing. It will expose the participant to a wide range of leading-edge technologies in the business sector.
To summarize, technology is becoming a cornerstone of the modern investment banking sector. It facilitates data to traders, automate trading systems, and provide consolidated views of data. Being a highly dynamic environment, investment banking is sensitive toward delivery and turnaround times for data and information processes.