As we enter the new decade, the investment banking market is poised to transition into a world of exciting high finance. The market for investment banking is forecasted to experience explosive growth between 2025 and 2035. Since these changes are taking place now, it’s very important to understand what these changes will mean for the industry as a whole, their future market size, their future salaries, their future demand and so on. As such, this blog will provide insight into all of these areas to open your eyes to the future of investment banking. Not to mention, this blog will explore trend growth and opportunities that investment banking has never encountered before this decade!
If you’re currently working in investment banking, want a job in investment banking, or have a strong interest in the field, this explainer of the next decade of investment banking will be a brilliant read. So buckle in and prepare for the ride that is the future of the financial investment banking market.
The Primary Factors Influencing the Growth Phase for the Investment Banking Sector
The nature of investment banking is about to change considerably in the coming decade. There is an anticipation of a rapid rise in demand and growth due to several factors. First, the increase in global economic activity is an undeniable driver. Many global economies are recovering from an ongoing downturn, and businesses are requiring one thing more than ever – proactive financial advice to capitalise on the resulting changes.
This will create more demand for investment banking advice, which in turn will drive future growth. Secondly, regarding technology advances, technology is going to affect the future of investment banking drastically. Technologies like blockchain, AI and machine learning are disrupting existing banking practices and improving transaction efficiency and security.
- Blockchain is improving transaction security and speed.
- AI and machine learning are improving decision-making and risk assessment.
In addition, regulators will continue to affect the future of investment banking. As governments around the world enact more stringent regulations on banking compliance, banks are increasingly required to look outside of their organisations to obtain guidance on complex compliance issues.
Also consider changing consumer expectations. Today’s consumers want personalised services, fast responses and transparency, and they will demand this of their banks. This will require banks to innovate and adapt to a changing marketplace.
What should be stated here, however, is that the future of the investment banking market is being driven by a combination of increasing global economic activity, technology advances, regulatory regimes, and changing consumer expectations, which will continue to fuel the growth of investment banking over the next decade.
Future Salary Forecasts in Investment Banking
It is time to consider the changing landscape of the 2020s as we give attention to the future of investment banking. Something that is of great interest to us all, of course, is how salaries in the future of investment banking might be changing by the year 2030.
If we look at financial news and financial markets for guidance, it is expected that investment banking salaries will increase significantly over the next decade. Several factors could influence this outcome, such as:
- Globalisation and Technological Advancements: The emergence of fintech and the globalisation of financial markets are giving rise to new opportunities and challenges in investment banking. With a surge in demand for new skills, salaries will likely increase to attract the best talent.
- Regulatory Changes: The financial sector is subject to numerous regulations, and regulatory changes can significantly impact the profitability of investment banks. Future regulatory changes may increase salaries for roles in compliance and risk management.
- Market Conditions: The current economic uncertainty may also impact the salary potential for investment banking. When there is inevitable market volatility, the skills of investment bankers become more critical, which may lead to increased salaries.
The investment banking industry has a bright future, with potential for significantly increased salary levels, but these projections are based on current trends and may change. Professionals in investment banking must constantly monitor the market and adjust their strategies accordingly. The table below provides a rough projection of how the salaries in IB might change by 2030:
| Job | Average Salary in 2020 (£) | Projected Average Salary in 2030 (£) |
|---|---|---|
| Analyst | 50,000 | 70,000 |
| Associate | 80,000 | 115,000 |
| Vice President | 140,000 | 200,000 |
Anticipated Bankers’ Demand Across The Globe
If the world economy is accelerating into a new age, then the banking landscape will undergo dramatic changes. By 2035, there will be a growing demand in certain geographical regions of the world for investment bankers; this is driven by rapid industrialisation, economic growth, and digital transformation.
First, we can expect the Asia-Pacific (APAC) region to dominate demand growth. Some key demand factors for the APAC region are:
- Fastly developing, most notably in China and India.
- The growing middle class and wealth will increase the volume of investments.
- The widespread acceptance of fintech solutions.
Second, North America will maintain its strong demand growth primarily due to market conditions in the USA.
Finally, we can see an increased demand for investment banking in the emerging economies of Africa that are growing, such as Nigeria and South Africa. There are three primary considerations:
- There is a surge in businesses seeking capital to expand their operations.
- Increase in mergers and acquisitions
- Development of a regulatory regime enabling financial growth.
In conclusion, the future of investment banking looks promising, with rising prospects of strong demand from the APAC region, continuous growth in North America, and the potential rise of a few African countries. Would-be bankers should consider opportunities in those areas in the next decade.
Understanding the Growth of the Investment Banking Industry by 2035
The investment banking industry is poised for explosive growth by 2035, primarily driven by rapid technological advancements and increasing demand for strategic services, including mergers and acquisitions, securities underwriting, and proprietary trading.
Key components contributing to the future of investment banking:
- Integration of Technology: Many traditional banking practices have been disrupted by emerging technology. The emergence of artificial intelligence and machine learning, along with developments in blockchain technology, highlights the rapidly evolving investment banking sector, making the field more customer-focused and economically efficient.
- Globalisation: International transactions and growing global investments are anticipated to fuel growth in the investment banking sector.
- Regulatory Shifts: The regulatory environment will also be a critical component of how the industry evolves.
Here is a forecast of the potential growth of the investment banking sector:
| Year | Estimated Industry Size (USD Billion) |
|---|---|
| 2025 | 120 |
| 2030 | 180 |
| 2035 | 250 |
The data in the above table demonstrates an astronomical growth in the industry, and it reinforces how much growth the investment banking future offers.
In conclusion, the investment banking industry is entering an intensive growth phase. Fuelled by emerging technology, the increase in global transactions, and regulatory shifts, by 2035, the investment banking landscape will look substantially different and offer new and rewarding opportunities for those who innovate and adjust.
Forecasted Demand in Investment Banking: Next Decade
The investment banking industry is poised for increased demand and considerable growth over the next decade. Between 2025 and 2035, we anticipate significant demand growth for the following reasons:
- Increased Global Economic Stability: As the global economy stabilises after a few recent downturns, we look forward to increased demand for investment banking services. Investment banks play an essential role in providing strategic financial advice, raising capital, and providing merger and acquisition (M&A) advice – all of which will be in demand.
- Technology Developments: Rapid technological developments in the finance sector have already changed the investment banking space. As investment banks leverage AI and blockchain technology in their banking systems, we anticipate a significant increase in demand.
- Upcoming Regulatory Change: The anticipated regulatory changes in the banking industry are also expected to create and/or reveal new opportunities within investment banking. The changes will likely enhance the ability of firms to develop and improve investment banking capabilities within a more favourable business environment. This systematic change will create new and incremental opportunities for growth.
Overall, we are excited about the future of the investment banking industry! Industry forecasts indicate a significant uptick in job opportunities across the industry, including positions such as financial analysts, traders, and compliance officers, by 2035.
In conclusion, the demand outlook for the investment banking industry is positive from 2025 to 2035. The industry is facing rapid growth as a result of global economic continuity, technological advancements and changes to regulations. This trend underscores the significance of investment banking as a chief influencer of the future of international finance.
Table. Projected Increase in Investment Banking Roles 2025-2035
| Job Role | Expected Growth % |
|---|---|
| Financial Analyst | 12% |
| Trader | 7% |
| Compliance Officer | 15% |
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Frequently Asked Questions
What are the expectations for the investment banking market from 2025 to 2035?
The investment banking market is projected to grow exponentially over the 2025 to 2035 time span. With fintech and digital banking shaping the evolution of investment banking, new opportunities are being created. Traditional investment banking services, such as mergers and acquisitions, underwriting, and asset management, will remain, yet the digital transformation will grow the investment banking sector in unique and new ways. Thus, the investment banking future promises to be both innovative and lucrative for individuals and firms.
Will this increase come with an increase in investment banking compensation?
Growth in the investment banking market is expected to provide some compensation benefits for roles in investment banking. As the competition for skilled talent increases, the demand for qualified investment professionals across the board will improve, which may increase compensation. However, it’s essential to keep in mind that economic conditions, sector developments, and changes in the global financial market will influence the offering of compensation.
What will cause demand for investment banking services in the future?
We believe demand for investment banking will continue to be linked to economic growth, the need for strategic financial insight and advice, and capital market activity. Technology will also be a large portion of demand for investment banking. With the growing enthusiasm of businesses and individuals for digital solutions, the demand for investment banking that leverages this technology for buy/sell or investment opportunities is expected to increase. Overall, it is likely that new technological advances will drive the future of investment banking.
How will the future role of investment banks evolve during 2025-2035?
The financial service sector is changing, and the role of investment banks will change accordingly during the stated time span. With the increasing integration of digital technologies into financial services, it’s anticipated that investment bankers will assume a multifaceted role, requiring them to develop and acquire new skills. To embrace these changes, investment bankers will at a minimum need to understand and engage with fintech approaches, data analytics, AI, and other relevant technologies. Overall, investment banks are expected to possess the combined skills of a banker and be able to navigate the new landscape. Investment banking future
What skills in demand will be helpful for investment banking professionals in the future?
In addition to traditional skill sets such as financial analysis, business understanding, and strategic thinking, expect a demand for technology expertise, including data analytics, AI, blockchain, and related fintech.