In my previous post “Top 10 Challenges for Investment Banks (part 1)” I discussed the first three challenges Investment Banks currently face responding to regulations and restrictions by among others (local) governments. Now I will discuss the four challenges Investment Banks face when they are building and maintaining a solid client base—and regaining client trust—which is necessary to drive profitability, gain analytical insights and improve efficiencies.
4. Addressing the Rise in Buy-Side Power
The crisis has shifted the balance of power from the sell-side to a more demanding buy-side. Faced with this ‘new normal’, investment banks need to reconfigure operations to deliver at scale and with greater efficiency. Traditional sell-side organisations are increasingly vulnerable to competition from established agency-only brokers and second-tier firms, and their regulatory influence has eroded considerably.