As I said in my previous post, investment banks continue to confront challenges in three key areas in 2017:

  • Simplification
  • Digitization
  • Innovation

In this post, I will take a closer look at the challenges related to digitization.

The trend toward an increasingly important role of digital technologies in creating new opportunities and challenges for investment banks continues in 2017, as investment banks look beyond their institutions to accelerate the creation of new capabilities.

While the industry’s interest in utilities and ecosystems as important levers for change has been noted in the past, there are signs that momentum is building:

  • The journey to the cloud is accelerating.
  • Consortia are setting standards and open source to make collaborative-based technologies a reality.
  • The push to digital platforms continues.

Building on the foundation of the last two years, many investment banks are increasing their investment, participation and collaboration in digital technologies, and looking for new ways to engage third parties.

This year, we identified three challenges related to digitization.

Challenge 5: Getting it Right with Digital Talent

To succeed in the future, investment banks might need to ramp up their efforts to attract and retain the best and brightest. That means introducing new ways of working, making jobs more appealing, and creating a workplace that encourages collaboration and values creativity.

Challenge 6: Liquid Standards: Improving the Client Experience

Business-to-consumer (B2C) experiences centered on intuitive self-service and seamless interactions are as well shaping client expectations in the business-to-business (B2B) realm. As investment banks transform their businesses and operations, they face the challenge of meeting changing client expectations without the “one-stop-shop” business model, bespoke products and other differentiators they have relied on in the past.

Challenge 7: Accelerating the Journey to Cloud

Sixty percent of capital market institutions say cloud-based entrants will challenge traditional business models. How to compete then when saddled with costly in-house IT estates? Moving to cloud-based models could help improve cost ratios. Investment banks need to respond quickly or their cloud native competitors could become the new industry leaders.

In my next post, I will take a closer look at the challenges related to digitization.

For further information, get the complete view of the Top 10 Challenges for Investment Banks 2017.