Investment Banking current and future challenges and changes

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Current and prospective industry challenges changes disruptions. Don t react to change, Current and prospective industry challenges changes disruptions. Current and prospective industry challenges changes disruptions 05. The Financial Services industry catches FinTech fever 07. The future of the investment banking landscape 09, Linking our unique African integrated offerings 11. Current and prospective industry challenges changes disruptions. Current and prospective,industry challenges,changes disruptions. The challenge for the investment banking industry,revolves around higher capital charges market. electronification digialisation stuck cost base,inflexible and layered technology with increased.
complexity of regulation and reporting, 1 Regulation drives business will be successful as transformational. behaviour cost initiatives fail to deliver results on. the back of complex infrastructure and,Banks are already fully engaged in. governance hurdles,meeting the IFRS 9 requirements and. the resulting changes to their business 4 Banks are required to utilise their. model with specific focus on provisioning customer knowledge to not only. Pressure to build appropriate models and retain but grow their customer. data requirements only leads to greater returns through more effective cross. complexity sell, Basel III has increased focus on The ability to measure and cross sell. maintaining core liquidity and leverage products has become increasingly. ratios with pressure on reducing short important to a company s ability to. term funding holding more liquid assets remain competitive while best servicing. raising long term wholesale funding all bank customers with an eye on capital. while reducing leverage both on and off returns,balance sheet.
5 The emergence of Fintech companies, 2 Capital is scarce creates a disruptive marketplace. The effect of Basel III has resulted The African financial services market is. in fundamental shifts in product expected to be one of the most receptive. profitability Structured derivatives and FinTech markets globally opening the. long dated transactions pre crisis Basel door to disruption across the end to. 3 in many cases are now a drag on ROE end investment banking value chain. This has resulted in the shift towards Blockchain is rapidly seen as changing the. the creation of non core divisions to face of cross border lending activity. dispose of unprofitable transactions,6 Outdated inflexible physical. portfolios Commoditised exchanged,infrastructure restricts movement. traded OTC products has resulted in,and growth in the current digital age. a fundamental change in margins and, capital management The traditional infrastructure of banks.
both physical and technical has proven,3 Pressure on costs as suboptimal ROE. to be inflexible to change and this,renders their ability to survive as is. Investment banks face significant in a disruptive marketplace potentially. pressure to reduce their cost base as unlikely,regulation has bitten Industry experts. predict only 5 to 6 investment banks, Current and prospective industry challenges changes disruptions. 7 Increasing complexity of reporting 11 Cyber Security. and responding to new and evolving,Number of cases of digital theft from.
regulation with focus on data,Banks through bypassing risk controls. optimisation,within Swift Swift processes 6tn, The evolving demand for reporting transfers daily with 11 000 members. compliance including governance EBA to stress test financial institutions to. outlined in BCBS 239 Pillar 3 poses new assess vulnerability to hackers Swift to. challenges to all banks This increases the implement two factor authentication. pressure on data optimisation through,accuracy timelines granularity of risk. financial reporting requirements 12 Regulators get tough on BCBS 239. 8 The client onboarding conundrum A number of regulators globally are now. seeing adherence to meeting BCBS239,The increased pressure for banks to both. as a compliance requirement as opposed,historically clean up their adherence to.
to set of principals This has resulted in,AML and KYC and remediate streamline. considerable investment cost to meet the,their current procedures The cost of. current deadlines Watch this space,compliance continues to rise with higher. capital requirements resulting in the,review of existing business model both. geography and client segments,9 Disruption is ripe in all financial.
Disruption in markets such as foreign,exchange is reshaping the banking. landscape and how the traditional players,exist in the ever changing landscape with. decreased market share and margins,10 Market Place Lenders. Securitising consumer debt as the,challenge to raise funding to match new. lending activity with 90 of fees from,new loans with increased financing.
from Institutional investors Regulators,push for greater transparency indicating. disclosures A bubble in the making in the,current low interest rate environment. Current and prospective industry challenges changes disruptions. The Financial Services,industry catches,FinTech fever. FinTech heralds the dawn of narrow banking and, portfolio optimisation It will change the nature of. money shake the foundations of central banking and. deliver nothing less than a democratic revolution for all. who use financial services Mark Carney governor of. the Bank of England, Annual global investment in the FinTech investment the Canadian Central Bank.
industry has grown by a factor of 6 5 announcing it is working with the country s. multiples in the past 5 years representing largest banks to develop an electronic. a compounded annual growth rate of 45 version of the Canadian dollar and the. Goldman Sachs Citi and Santander were Bank of England s intent to use Blockchain. the most active investors among the large and a digital central bank currency to widen. banks Central banks have also entered access to its real time gross settlement. the fray with the Singaporean central bank system RTGS which processes 500bn. funding a Blockchain based record keeping worth of transactions each day. system as part of a five year 225m,Annual Global VC Investment in FinTech. 2011 2012 2013 2014 2015,Investment Billions Number of deals. Source Deloitte analysis on CB insights data, Current and prospective industry challenges changes disruptions. Current and prospective industry challenges changes disruptions. The future of the,investment banking, The changes and evolution of the financial services. landscape that we have seen to date is just the beginning. of an ever developing eco system Success in this new. environment will force changes in the way financial. institutions see themselves and their customers the way in. which they tailor and channel pioneering products and the. innovative strategies they use to combat new disruptors. Decreased customer profitability and,increased competition.
Customer profitability and measurement,of capital has become an increased focal. point as banks continue to operate in an,ever competitive market As competition. grows margins will be squeezed and,ultimately only the most efficient. companies will survive,Continued development and,optimisation of data sources as. duplicate demand for information,and reporting continues to increase.
Leveraging data sources will provide,institutions with a more granular view. of the marketplace and the existing,risk This ability will offer new firms a. competitive advantage as they are able,to tailor their risk and business model. strategy Existing competitors will also,benefit from leveraging this information. to identify untapped opportunities within,the marketplace Investment banks are.
set to utilise this data to raise profitability,map out markets and company. exposures and ultimately win more,deals The analysis will boost profitability. by promoting a better understanding of,the customer and placing the institution. in a better position to understand and,meet their client s needs. Current and prospective industry challenges changes disruptions. Volume driven profitability rather Independent pricing vendors are set Optimising Collateral. than margin driven to be used by all financial institutions. The increased cost of capital has resulted, Margin driven products and profitability As competition in the financial institutions in the need to optimise collateral assets.
are set to make way for volume drive landscape continues to strengthen and obligations Increased sophistication. operations as the competitive landscape independent pricing vendors forcing with the use of algorithmic methodology. continues to develop transparency and equilibrium are set to with haircuts concentration requirements. be key and eligibility are major considerations,Major focus on cross sell of products. with eye on capital returns Confluence of Disruptors Service Centres of the future. Financial institutions will continue to Blockchain is forcing Financial Services Increased use of robotics will result in a. develop their need to ensure effective transactions can be digitised and securely significant shift in size and structure of. cross selling of products and services to distributed will impact F2B lending current service centres run by financial. maximise capital returns Syndication Trade Finance insititutions leading to greater efficiencies. and improved control enviroment, Compensation subject to balanced Bitcoin Stability Risk. independence risk score cards Standard Initial Margin Model for. Financial Stability Oversight Committee,assessment Non Cleared Derivitives. has warned that like most new, In years past excessive risk taking was technologies certain risks operational The push to develop and implement. driven by the potential for excessively vulnerabilities with such systems until they a standardised methodology for OTC. large rewards this is set to be a thing of are deployed at scale Dramatic increases derivitives not settled through clearing. the past driven mainly by the expected in transaction delays failures as new houses eliminating collateral disputes in a. increase in use of developed independent Bitcoin transactions exceed the speed market of 170th national value. risk score cards assessment for financial they can be added to the Blockchain. European Stress Testing Lessons for,institution leadership.
New Digital Currency to clear settle Africa,Continuing development of trades. While the EBA s stress testing results for,regulations such as Twin Peaks will. Four of the world s largest banks combine European Banks was largely positive it. force transparency, resources to develop a new form of stressed emphasis on the need for strong. Regulations such as Twin Peaks digital currency to clear settle financial CET1 capital to avoid additional capital. encourages transparency and enhances transactions which is estimated to cost the raising. the integrity of the banking market by industry 65bln to 80bln annually Based. placing equal importance on market and on Blockchain technology to speed up. prudential conduct supervision settlement freeing up billions of pounds. of capital by creating utility bitcoin that,Structured derivatives are set to. are directly convertible into cash at central,become the domain of a small.
banks cutting the time and cost of post,number of investment banks. trade settlement and clearing,Structured product s ability to offer. The continued evolution of FinTech,customised exposure including to. means flexibility becomes crucial to,otherwise hard to reach asset classes and. subclasses are set to make structured, products important as a complement to Understanding regulating and maximising.
these other traditional components of the benefit of FinTech is set to be a. diversified portfolios critical means of not only success but. also survival in the investment banking,Financial engineering requirements. landscape of the future,become a vital part of any successful. banking structure Intelligent Risk Culture, As reporting complexity and maturity Becomes a key competitive advantage by. continues to develop financial engineering shifting from overnight to real time This. requirements are set to be limited to requires a significant shift in Technology. specialised and well capitalised financial Organisational capability. institutions, Current and prospective industry challenges changes disruptions. Linking our unique,African integrated,Strategy and Innovation.
We help our banking and investments,clients deal with changing operating. model structures business and finance,transformations evolving customer. expectations and changes to the,ecosystem which redefine the rules of. financial services,Deloitte Capital,Capital Markets Digital Markets. We proactively assist banks and corporates,to implement risk management capital.
and funding incl liquidity frameworks We,also assist clients to leverage their systems. to better manage their balance sheets,while providing regulatory and accounting. expertise and advisory,Deloitte Digital,We help clients reimagine how profits are. generated and how relationships with your,customers are created and managed We. Investment Banking current and future challenges and changes 03 rrent and roectie indtr callene cane dirtion Don t react to change Create it 04 rrent and roectie indtr callene cane dirtion Current and prospective industry challenges changes disruptions 05 The Financial Services industry catches FinTech fever 07 The future of the investment banking landscape 09 Linking our unique African

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