Digital Transformation in Investment Banking

Investment banking is a segment of banking that serves many actors like institutions, individuals or even governments to raise capital or mergers. It serves as a bridge between investors and organizations to mutually benefit from each other. The consultancy service it provides has been highly-valued for every party within their operation framework. Yet, the overall performance of investment banking is decreasing every day. This article by Financial Times claims that the revenue of investment banking suffers immensely as it saw its lowest point since 2008.

There are a few reasons why investment banking is experiencing this crisis. There’s been an evident stagnation within the branch due to high entry barriers. Yet, as years went by, increased competition and volatile revenues began to constitute a strong need to restructure the business plans. Apart from that, the rise of FinTechs along with the pandemic that entwined the whole world also pushes investment banking to cross its limits. The possibility of being outdated and losing relevance can only be prevented by digital transformation.

Digital Transformation and Its Components

According to Accenture’s report, both the present and the future of investment banking are subjected to the inevitable process of digital transformation. However, it is necessary to understand the components of digital transformation and their relation to investment banking to get a better understanding. 

Technology introduced various novelties like the democratization of the market and increased data transparency. The former represents the attainability of market and banking data whereas the latter is linked to the accuracy of the data. If utilized properly, data analytics generates insights for the users single-handedly. This eventually makes the bridge role of investment banking obsolete.

Big Data, AI, and Customer Experience

Although digital transformation increases competition and pushes the limits, they also enable banks to leverage their business further. In line with that, this article highlights that the number of advantages of collaborating with FinTechs increased exponentially in the last 5 years. Therefore, the optimization of financial services to digital technologies can actually be quite beneficiary if investment banks evaluate the opportunities. 

To constitute an example, this report by Deloitte states that customer experience is undoubtedly in the future of investment banking. In accordance with that, digital transformation is also deeply linked with customer satisfaction. So, it can be deduced that by implementing contemporary methods, being future-ready in every aspect can be achieved.

To begin with, big data analytics has been crucial for each and every segment of the banking industry. Many FinTechs center their operations and solutions on big data analysis to gain insights. Through evaluating both structured and unstructured data, modelling the outcome of investment decisions is immensely important. Moreover, customer experience can also be enhanced to gain an edge over others within the atmosphere of increased competition.

Artificial intelligence (AI) holds even further importance for both banking institutions and digitization. Since it can be encountered in every step of digital banking, banks get opportunities to improve their operational efficiency with AI continually. From reducing costs by automation to risk management, cloud computing to machine learning, AI is naturally the future and keystone of investment banking. 

This article by InvestmentBank claims that Corporate Finance departments are disburdened by AI and that they have acquired a noticeable efficiency. This solely emphasizes the contribution of AI to the banking industry and especially investment banking. This is no different for the customer experience since artificial intelligence is a part of the customer service journey end-to-end. Thus, investing in artificial intelligence is highly-rewarding for a financial institution. 

Omnichannel Investment and FinTech Solutions

The impact and significance of digital methods and their relation to the customer experience are evident. Deriving from there, adopting an omnichannel approach armed with various fintech solutions is certainly beneficial for investment banking. The need to understand the meaning of the term ‘omnichannel investment’ and the corresponding FinTech solutions arises.

An omnichannel investment is the unification of user experience from each platform with the services that the bank provides. This includes many aspects like websites, branches, mobile apps and more. It enables banks to obtain two fundamental prerequisites at the same time: standardization and digitization of their services. 

This Deloitte report explains that investment banking is shifting towards a new model: The connected flow and it is strictly data-centric and customer journey oriented. Therefore, the omnichannel investment’s value propositions are inevitably in harmony with connected flow. Keeping these in mind, another question arises. How can investment banking sustain and enrich the customer journey?

From that point on, the FinTech solutions gain undeniable importance. There are various ways for them to reflect their value over the investment banking and customer journey. Since the attainability of data and the utilization of it has increased, users directed their attention towards personal investment transactions. Taking advantage of that, banks are supporting their users via robo advisories that provide continuous financial guidance. Those advisors process personalized big data and hand out the most preferred investment option swiftly. 

As another example, chatbots also play a crucial role in investment banking. They may contain answers to users’ questions related to capital markets as well as customer-service focused ones. Thus, both customer experience and investment decisions are enhanced single-handedly. This also boosts efficiency and lowers costs with the help of AI, the cornerstone of digitalization. This FinExtra article states that investment banking acquires resilience and adaptability thanks to chat-oriented bots, and it shouldn’t be missing out on the trend.

One of the most recent trends among fintech companies is gamification. Since the democratization of the market and data is the norm, getting financial literacy as soon as possible is essential. Gamification eases out this process by offering users the simulation

of the investment world. Not only that, but it also navigates them through questions and animations for improving their expertise in a multi-channel approach. 

Collecting all of these together, it can be summarized that digital transformation can be utilized and converted into customer satisfaction. FinTechs play an important role to do so by introducing the necessary technology. 


Investment banking has been one of the most significant segments of the banking industry for a long time. Yet, due to various circumstances like high entry barriers, competition hasn’t been so intense. This has changed through digitalization that made date much more attainable now. Therefore, investment banking needed to adapt to the present, leaving behind the traditional methods of the past.

To be in line with digital transformation, its components must be fully understood. From big data to AI, there are numerous components of digital platform transformation. Yet, they all have some things in common: they reduce cost, increase efficiency and provide a better customer experience. These are the points that investment banking can also utilize to move its operations forward.

The methods that improve the customer experience and the importance of utilizing the data analytics must be acknowledged. Through developing an omnichannel approach and implementing valuable FinTech solutions like chatbots and virtual assistants or robo advisors, investment banking can make itself relevant again. Offering a co-joint, data-driven and a customer-centric journey should be on the top of its agenda. In order to do that, investment banking should stop  missing out on the fintech revolution and eagerly join the next one.