How is Digitalization Impacting Investment Banking?

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Everyone is aware of how the entire banking sector is advancing. In order to keep up with the industry, rapid adaptation of digitalisation is one of the main priorities of the banks. Digital transformation in all forms is the current global movement faced by all the banks. There are some of the major strategic priorities like Customer experience, Data intelligence, Operational efficiency and Financial insights and almost all the banks are treating transition with utmost importance. A bank has different divisions like Investment Banking, Retail Banking, Commercial Banking, Global Banking, etc and you will come across digital transformation in every division of the banks. 

One of the most profitable fields in the financial industry is investment banking and to understand what is investment banking all about, here are some broad pointers to keep in mind before you go through the rest of the article. Investment banks advise governments and organisations on how to raise money, how to merge or take over companies, and how to reshape the business most effectively. An investment banking division will have five key areas: - Equity Capital Markets (ECM), Debt Capital Markets (DCM), Leveraged Finance, Restructuring, Mergers & Acquisitions. While M&A focuses on business advisories related to mergers and takeovers, ECM and DCM focus on advising organisations and governments on raising capital. Leveraged finance is fairly like DCM but there is an involvement of larger risks. Restructuring is where bankers analyse the structure of a business. For example, debt/equity ratios. Once the scrutiny is over the company is restructured in the most effective way to run the business successfully. 

An investment bank is responsible for taking care of underwriting stocks, managing M&A, and also being the financial advisor of the organisations, governments or other financial institutions. For them, their scope of growth and making a profit depends on the contacts that an investment bank has firmly established over the time period. Start looking at the list of leading investment banks; how they have evolved over the years and what they are today, you will have a sketch of what is investment banking all about. 

Now since the coronavirus pandemic, the need to adopt digital transformation has doubled and to put up with today’s competitive market, the banks are left with no choice but to accept changes brought into the system. Upon completion of digitalisation in the investment banking division, the services become seamless with the help of emerging technology and the services are shifted to online platforms with lots and lots of data stored and driven from the backend. With the advancement in technology, investors and investment bankers are now prone to the usage of Artificial Intelligence, the Internet of Things, Blockchain and other technologies as a part of their everyday job. There is a reason why investment banking industry is known to pay a handsome salary and it is all the nerve-wracking hard work and extra hours of dedication that counts for it. 

As mentioned earlier, this banking division is one of the profitable fields and hence, the career in investment banking is also positive and growth-oriented. The range of an investment banker’s salary starts anywhere from Rs.2.46 lakhs per annum and goes up to 70 lakhs per annum. To understand why investment banking and how you can establish a reputable career in this field, you can start by doing a professional course in a program called CIBOP (Certified Investment Banking Operations Professional). This course offers you an above-the-line experience you would require to sustain and succeed in this industry, that is if you pick a career in investment banking.  

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