Every year for the past eight years, Accenture has published the Top 10 Challenges for Investment Banks series. It’s our way of documenting and analyzing the key issues that are capturing the attention of investment banks at a given point in time. Looking back at the challenges we have covered in the past, 2016 marks an exciting shift in the series.
When we launched the Top 10 Challenges series in 2008, the industry was entering into the global financial crisis. Investment banking executives were focused on navigating a new and rapidly evolving regulatory environment, reducing costs and meeting increasingly onerous capital requirements—priorities that persisted for a number of years.
Our research for this year’s challenges, however, revealed a shift in perspective among industry leadership. Don’t get me wrong: regulatory compliance, cost reduction and capital adequacy remain top of mind for many investment banks—but they are approaching these challenges in new and interesting ways. Whereas they were mostly treated as episodic issues requiring project-based responses in the past, they are now widely considered “disciplines” that need to be embedded in business, operations and technology functions.
Preparing for new competition
At the same time, the industry’s C‑suite is realizing that—beyond the four walls of their institutions—an entirely new ecosystem is emerging around them.
Increasingly efficient data processing and storage technologies, combined with the rise of cloud-based software and services, have made innovation more accessible and significantly reduced the barriers to entry for investment banking services. Financial technology (FinTech) investment has tripled in the last five years—from $1 billion to $3 billion—and we are seeing new ideas coming up that change how trading, capital raising and wealth management can be delivered.
Embracing new technology
One of the strongest themes in this year’s series is that of digital technology—FinTech innovation in particular. Half of the challenges selected address some aspect of this wide-reaching topic, which covers everything from blockchain technology and distributed ledgers, to digital disruption and cyber security.
Digital technology has the potential to change the industry in many ways, forcing investment banks to reconsider not only how they operate internally, but also how they attract and retain top talent in a millennial workforce, interact with clients and compete with new market players. As more market players adopt digital solutions and more transactions are digitized, the lines between digital strategy and business strategy begin to blur.
Looking ahead to 2016
That’s where our Top 10 Challenges series comes into play. These reports dive into hot topics in digital technology and other key issues to provide industry executives with a snapshot of current issues and perspectives.
To learn more, visit: www.accenture.com/10challenges