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The Investment Banking Evolution Story – Digitally Disrupted

Jun 25, 2019| Article

Behind closed doors, the wealth makers of the world are always on the lookout for the next unicorn, the next 1000x investment exit, and a constant stream of successful deals. Yes, Investment Bankers have had their way in shaping financial markets, OTC derivative markets, and pretty much most of the world economies. But the SMAC impact (Social, Mobile, Analytics, Cloud) coupled with Data Science, have ushered in the new era of getting up to speed or getting left behind. The marriage of Investment banking functions with fin-tech is the proverbial match made in heaven, but not all banks have leveraged this phenomenon, except the leaders. A Harvard research points out that 10 US banks have acquired over 81 fin-tech start-ups over the past 6 years in their early foray into digital disruption. The highly lucrative IPO deals of companies going public, that were the mainstay of revenue for these banks, have actually reversed. There are now 3,671 in numbers compared to 7,322 listed entities just two decades ago. Large companies are relying on staying private for profitability and sustained growth.


So, what’s the future landscape looking like? Fintech acquisitions seem the number one priority for banks bracing themselves for digital disruption, sourcing innovation and diversification directly from external sources than organic development – a process that is fast, reliable and proven. The markets have spoken, and the need of the hour is for aspiring investment bankers to completely immerse their efforts in acquiring technical skills and fully integrating in technologies like AI and data science, both on the buy side and sell side of their investment banking transactions.

Even as multi desk dealers and intelligent electronic platforms continue to cannibalize the archaic art of personal deal making, the progressive investment bankers, the ones who will lead the industry into the future, are already up to speed. It’s imperative that aspiring entrants into this industry don’t get left behind because of lack of clarity of the role that digital disruption will play in the immediate future.