The majority of global investment banks and advisory firms foresee an increase in their firms’ tech spending in 2024, according to a new report by Acuity Knowledge Partners.
Its latest study The Dealmakers Insight 2024, has revealed that 68% of the respondents have technology roadmaps targeting productivity and efficiency.
Technological advancements and innovations have altered the way investment banking firms operate, Anish Ailawadi, Managing Director, Global Head of Investment Banking Acuity Knowledge Partners, said.
“To address and keep pace with evolving market dynamics, investment banks and advisory firms are formulating digital transformation strategies,” he said.
According to Ailawadi, the top three strategic considerations of investment banking firms in 2024 in order of priority are as follows: Expanding/augmenting product and service categories; Entering new geographies; and Investing in deal-origination technology.
Digital tools and platforms are being increasingly leveraged by investment banking and advisory firms to evaluate global markets, revisit and review their portfolios, enter new economies and capture cross-border deal opportunities, he said.
The survey results also brings forth the focus on technology adoption and related spending to implement productivity-enhancement and/or automation tools.
Based on the survey results, Acuity believes that the following will be priorities in a firm’s technology journey: Streamlining the deal-origination process and improving deal-flow management; Advanced deal sourcing and identifying relevant clients; Efficient client reach-out and relationship management (CRM); Re-engineering/redesigning the workflow-management and reporting process; and Automating the client-facing process, including client onboarding and document processing.
Furthermore, more than half of the respondents acknowledge that leveraging offshoring services will be pivotal with 54% of the respondents stating that they plan to explore third-party/offshoring support, standalone or in partnership, for technology development.
Ailawadi said that offshoring offers unparalleled benefits and is reshaping the global investment banking and advisory industry.
The survey captured increased interest of the top leaders of the investment banking industry in offshoring.
“While traditional advantages continue to generate proven value propositions, value added advantages are increasingly catching attention,” said Ailawadi.
“Over and above the cost arbitrage advantage, offshoring offers savings in terms of lower supervision time, ready access to a skilled talent pool and operational flexibility,” he added.
Approximately 60% of the respondents acknowledge that offshoring has freed up their investment banking teams’ time otherwise spent on various high- volume tasks.
“Offshoring services can be leveraged across the deal lifecycle, with varying complexities,” Ailawadi said
“There has been a systematic shift – from just availing traditional advantages of offshoring to an evolved combination of traditional and value-added advantages,” he added.
