Top 3 challenges and solutions in today’s investment banking industry

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Top 3 challenges and solutions in today's investment banking industry

Published On: June 30, 2021

Investment banking has always been one of the most complicated sectors of all time. To crack deals flawlessly and retain their clients, investment bankers need to shoulder several tedious tasks such as financial modeling, business valuation, transaction documentation, relationship management, risk mitigation, deal negotiation, sales pitches, and marketing.

Of the lot that they do along their path from exploring investors for acquisitions, enlightening their clients on the local and international market climate, providing ample investor data, to devising innovative finance models, they’ve got heaps of roadblocks to outdo and make way for their destination.

However, the consistently evolving disruptive technologies have been quenching the thirst for more advanced and strategic solutions across industries. As the challenges that clusters around investment banking are growing at a rapid rate, the traditional approaches aren’t proving competent anymore. This has pushed the investment banking industry for a dynamic makeover.

Let’s take a detailed look at the top three challenges and appropriate solutions to prevail over them.

1. Cybersecurity threats

Challenges

Any business that embraces technology is susceptible to cyber-attacks, the core of which is data theft. This further leads to a chain of consequences that includes loss of reputation, economy, and trust amongst clients. Especially, in the current scenario where the entire world is working remotely, a majority of information beginning from personal to official is exposed vastly to online applications/ portals.

Solution

Investment banking is all about managing boundless data that are gathered, analyzed, and stored in the process of effective decision-making. The biggest challenge in dealing with these threats is to figure out and apply the right solution.

The best of a few solutions would be to invest in:

  • Implementing new cybersecurity technologies that will kick out any phishing attacks right at the entry level.
  • Hiring highly skilled data and network security professionals who will efficiently guard your system round the clock.
  • Educating employees on best practices that will eliminate errors due to negligence and ignorance.

2. Cost saving and customer experience

Challenges

In addition to developing transformational strategies, it costs a lot to migrate from the bygone processes and practices to the digital territory and withstand the global regulatory and financial pressure. The changes and challenges involving unpredictable operational risks, rising demand of clients, and complex operating models are short-lived and hence are subject to change with the fast-changing digital landscape.

Solution

Investing directly in long-term solutions to tackle fluctuating changes will not be a budget-friendly move from a futuristic standpoint. Outsourcing is looked at as a single cost-effective solution to streamline your process, uplift your in-house productivity, and improve your business’s capability while still adapting to innovative technologies.

Understanding and evaluating user experience is possible when you establish a single platform between the business and the clients. This allows banks to build excellent customer relations and promote better transparency for customers in terms of pending transactions and pricing.

3.Highly skilled professionals

Challenges

To continue flourishing in an industry that is full of challenges requires unique leadership and a top-notch workforce. The older your employees, the older are their skills unless you have a skill development program that’s updated as part of your company policy.

Ever since its inception, investment banking has been one of the toughest businesses; and the toughest will indeed demand extended working hours and tight deadlines, which drives young finance professionals’ attraction towards an alternate career.

Solution

It is not advisable to let the skills of your employees grow older along with their years of experience. Efficient and robust talent development programs to train and reskill employees are vital to helping your business gain a competitive edge. Digitally equipped workspace, rewards & recognitions, incentives, and much more exciting offers can attract and motivate young talents to sustain and accomplish more in this field.

Companies that consider skill management as an extra burden amidst focusing on their core business can still outperform by hiring highly professional third-party specialists. This will minimize your stress and maximize your profit by delivering exceptional quality on time and within your budget. 

Key takeaway

Challenges continue to crumble business growth regardless of any industry. Nevertheless, technological innovations are constantly evolving to overcome these challenges and give your business the privilege of sophistication in all aspects. Investing in modern technologies might be an intelligent decision, but rarely economic.

DADJ offers world-class investment banking support through streamlined processes, envisioned market trends, and revenue-generating investment strategies, which change the way you play your game in the local and global market.

Our team of certified professionals is specialized in assisting you across any investment banking function with the finest flexibility, quality, reliability, and cost. Some of our services include:

  • Equity Capital Markets
  • Debt Capital Markets
  • Mergers and Acquisitions
  • Sales Support
  • Financial Modeling
  • Tax Reports

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