Bank of 2030: The Future of Investment Banking

What is Investment Banking?

To continue where we left off, Investment Banking is one of the many services that the Banks provide. There are also firms that deal only in Investment Banking. The types of clients which fall under the umbrella of Investment Banking are huge. Banks service many types of clients in Investment Banking which may range from large MNCs (Multi-National Corporations) to your everyday common people. Now, of course, the services provided to the different clientele will be different. For example, the spending power of a large corporation is vastly greater than the spending power of a common man. That is why the services offered to both of these clients will be totally different. 

Investment Banking in itself is a very large division that consists of many services. These different services are offered to different clients on the basis of a variety of factors. The Spending Power of the clientele is just one of many factors which determine the services that the Financial Institution is going to offer to its client. Some of the services that are offered by the Financial Institutions to their clients are Mergers & Acquisitions, Sales & Trading, Asset Management, and so on. Now we will look at “Investment Banking Now” and then we will look at “Investment Banking in 2030.”

Investment Banking in today’s scenario- 

In this topic, we are going to learn about the state of Investment Banking now. That means that we are going to be seeing which trends shape Investment Banking now. Then, after this, we will see Investment Banking in 2030. Some trends which influence Investment Banking now are high-frequency trading, virtual IPOs, Digital Technologies, and a shift in hiring trends. Now we will see these trends in detail.

High-Frequency Trading is something that is used by large financial institutions. This is because the concept behind high-frequency trading is more applicable and more advantageous to Financial Institutions which are very big. High-Frequency Trading gives more returns on investments. Virtual IPOs have boomed all thanks to the Pandemic. Virtual IPOs have many advantages over Standard IPOs. The reduced costs significantly and it’s all virtual so it saves even more costs.

Nowadays, Investment Banks have started hiring professionals from various disciplines as opposed to earlier. The hiring trends have changed joined not only in Investment Banking Industries but in most Industries. 

Investment Banking in 2030

Due to a number of reasons, Investment Banking will look very different in 2030 than what it is right now in 2022. First, in this topic, we will look at some factors which will influence Investment Banking in 2030.

1. Change in Customer Needs and Expectations: – It is inevitable that the needs and expectations will not be the same in 2030 as they are now. This is because a lot of things change in a few years and these things influence the needs and expectations of the customers. Another reason for the change in the Customer Needs and Expectations is a change in the customer mindset, what the customer thinks now and what he expects from his investments now will be very different from what he will think in 2030.
2. Technology: – We already know that Technology changes every few years. There is a shift in Technology Paradigms every few years. For example, in recent years Technologies like Artificial Intelligence and Machine Learning have come into the foray and they are indeed making a lot of waves. So I would expect that in a few years some new technologies will arise that may help a customer make better and much more informed decisions in regard to their investments. 
3. Rise in Population: – With every passing day, due to the rising population, more and more people are entering that age in which they are ready to make independent financial decisions. Since the topic of Investments is quite hot right now, even the young people including teenagers are very aware of the Investment opportunities and services at their disposal. So they will be much more informed in making decisions in 2030 than they are now.
4. Change in Spending Power: – The spending power of people has increased much more than what it was in the past. So going by the trend, the spending power of the consumers will definitely increase in 2030. That is why there will be more people investing in 2030 than they are now.

I personally think that Crypto is the next big thing in the world of Investments. I definitely agree that the risks associated with Crypto are more than compared to traditional Investments. It is predicted that in the future, Investment Banking will face more competition from different players who are just waiting to pounce on their opportunity and they definitely are waiting for the right time to take over the market. That is why; it is recommended that Investment Banking should change with the changing trends in order to stay in the competition.

Conclusion

In this topic, we saw a brief definition of the term Investment Banking. Further, in the article, we did a deeper dive and we understood what Investment Banking really is. Then we looked at what Investment Banking is now then we saw how Investment Banking will look in 2030. We have even discussed the factors that will influence investment banking in 2030.