Investment Banking Technology: Five Key Trends in 2023


Written by Finalis

Last edited on Jul 13, 2023

3 min read

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The adoption of investment banking technology holds paramount significance for the positioning of dealmakers, who are progressively seeking out pioneering solutions to bolster their abilities and maintain a competitive edge. 

We have already covered the fundamental concepts of investment banking technology in our previous article, and for this one, we are delving into the trends of investment banking technology for this year.

Don't stay behind the wave

Investment banking technology encompasses a wide range of tools and platforms, including trading systems, risk management tools, artificial intelligence and data analytics software. 

As the demand for investment banking technology continues to grow, we can expect to see even more exciting developments in this field in the coming years. Modern dealmakers are increasingly turning to fully integrated tech stacks to automate administrative tasks, rapidly scale workflows, reduce costs and create proprietary advantages from data. 

Private company intelligence platforms/data services are a critical component of tech stacks, enabling firms to identify potential investment targets quickly and easily. By leveraging these investment banking technology tools and services coupled with customer relationship management software, sales and marketing automation, and business intelligence reporting, firms are able to operate more efficiently and effectively.

Be on the lookout for opportunities

Five significant trends uncovered by SourceScrub are poised to reshape the landscape of investment banking technology in 2023. We've condensed these trends to provide you with a concise and insightful overview. So, without further ado, let's dive in! 

Agile processes, data-driven conference strategies, ESG-focused investments, automation, and AI are expected to transform the investment banking technology and the whole banking industry in the coming years.

Five key trends in investment banking technology

1- Agile processes: with IPO volumes and proceeds experiencing significant declines in 2022 (-84%), coupled with losses in stocks and bonds, investment bankers must adapt to current market dynamics. By embracing investment banking technology and agile methodologies, dealmakers can enhance their responsiveness and adaptability, and can continuously evaluate and improve their overall performance in real-time.

2- Data-driven conference strategies: a recent survey from Sourscrub found that the two most popular methods firms use to identify, research, and connect with companies are networking (88%) and conference lists (84%). In 2023, in-person events and conferences are back in full swing but these are no longer synonymous with effective, transaction-ready opportunities. Savvy firms see value in combining in-person conferences with the latest data and associated investment banking technology to pinpoint ideal targets and establish rapport with them prior to attending. Data-driven conference strategies can optimize the productivity of in-person events, enabling banks to focus their efforts on the most relevant companies and create a long-term deal pipeline.

3- Automation: with limited resources and a need for maximum efficiency, investment banks are using investment banking technology to boost automation. By integrating automation tools within their tech stack, dealmakers can automate time-consuming tasks, allowing their teams to focus on higher-value activities and increase productivity.

4- Artificial Intelligence: AI is revolutionizing the investment banking technology industry and will continue to do so in 2023. AI-powered technologies offer endless possibilities, ranging from chatbots to blockchain applications. Investment banks that fully embrace these advancements can unlock new opportunities, improve forecasting, and gain a competitive edge in the market.

It's crucial to emphasize that while AI holds tremendous potential, only a mere 15% of financial services companies, including investment banks, extensively utilize AI-powered technology. However, nearly 90% of these companies have plans to ramp up their investments in AI by 2025. Therefore, it's imperative to start evaluating how your business can incorporate AI as an integral part of your investment banking technology. Don't miss out on this opportunity to stay ahead in the game.

At Finalis, we are already seeing the impact of this trend, as evidenced by substantial growth in deals involving AI components within the Tech, SaaS, and Healthcare sectors. The aggregate deal volume has surpassed $260M.

5- ESG focused investments: these initiatives are also gaining significant traction across various industries, presenting a unique opportunity for investment banks to align their strategies with these values. Many banks have established dedicated divisions or strategic investments in this area, capitalizing on the growing demand for ESG-focused investments. And what's more, according to Bain, ESG actions also are key justifications for higher deal valuations. In our recent blog post, Responsible Investing in a Changing World, we specifically highlight an example involving a Finalis partner.

Investment banking technology alone may not be enough. Don't lose sight of this question: "How is my firm doing good?". The answer you give will be your positive differentiator (or not). In this world, it's not just about making money any more; it's about doing good to, and for, others.

Do any of these appeal to you? Explore our Connect platform to find solutions.

How can Finalis help?

Investment banks must adapt to the evolving landscape and capitalize on investment banking technology advancements to position themselves for success in 2023. By staying ahead of the curve and keeping a close eye on these five key trends, dealmakers can unlock new opportunities for growth and success. 

This not only saves time but also gives firms a competitive edge in the crowded investment banking field. As the industry continues to grow and evolve, it's essential that dealmakers invest in this transformative technology and join the investment banking technology transformation.

If you're concerned about staying ahead amidst the rapid changes in the dealmaking industry, reach out to us and be part of a tech-enabled space. Boost your operations and don't miss the wave!

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