Periods of heightened uncertainty can radically reduce visibility for financial market participants, meaning that investment banks need access to changing financial data. But how can this access become a critical advantage? Cornelia Andersson looks at six trends that matter when assessing changing financial data needs.
- In periods of heightened uncertainty, streamlined and quick access to data most relevant to you becomes a critical advantage.
- Remote, reliable access to information from across sources and asset classes is critical.
- Powerful analytics platforms and an ability to present insights digitally are fast becoming competitive differentiators.
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The COVID-19 pandemic and national economic lockdowns have radically reduced visibility for financial market participants. To develop the clearest picture possible during periods of market volatility, investment banks need access to more of the right data, the data they need. This race for insight makes new demands on data, and those using it.
In a previous blog, I explored how people, connections, collaboration, sentiment and confidence, all key factors for deal making, had been altered by COVID-19 and the lockdown and what organizations needed to do to keep their competitive edge.
The faster the situation changes, the faster investors need to understand trends and refine investment strategies. They need an information flow that can keep up, which means that the value of accurate and timely data is increasing exponentially.
The competitive advantages of shifting to the cloud have become manifest in recent months, as investment bankers rapidly adjust to working from home, virtual deal-making and collaborative environments. The ability to access data and analytics from multiple locations and across multiple technology solutions is quickly becoming a competitive differentiator. Investment banks with access to powerful, flexible data solutions will be better positioned to execute deals and emerge as winners.
- Multi asset class insight
Investors are increasingly using data from across different asset classes, in order to achieve a more rounded view of drivers and sectors in a changing world.
Another way to achieve insight is to combine proprietary data with external market data. Increasingly these can be non-traditional, unstructured sources, including news, commentary, research, social media data and alternative data sets, typically geolocation data, credit card or job postings data.
- Intelligent automation
To make sense of such alternative data sources, machine learning, AI and powerful analytics solutions are critical. While investment banking will largely remain a relationship-based business, the ability to combine the human element with intelligent automation is fast becoming a competitive differentiator.
- Digital presentation
Once you have connected the dots and identified the insights you wish to convey, there is a final barrier: physical remoteness. The extent to which you can work together with your own team, collaborate with your partners or showcase clients and business cases remotely has become a material factor.
In other words, it’s all about digital. Investment banks that were ahead in their journey towards digitalization now have a clear advantage. Laggards will need to make up ground fast. The innovators are running virtual IPO roadshows, remote due diligence and site inspections using drones and cameras, while conducting management presentations from their kitchens. As a result, from now on, the relationship element of investment banking will be, to some degree, dependent on how comfortable you are with the digital side.
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