• Post Graduate Program In Finance And Accounting
    Co-created with Grant Thornton
    4.9 out of 5 by 238 learners
    14 X industry demand
  • Professional Certification in FinTech
    Co-created with SP Jain School of Global Management
    4.6 out of 5 by 1250 learners
    6X industry demand
  • Credit Risk and Underwriting Prodegree
    Co-created with Moody’s Analytics
    4.5 out of 5 by 526 learners
    4X industry demand
  • Banking And Wealth Management Bootcamp
    4.7 out of 5 by 460 learners
    3X industry demand
  • Post Graduate Program In Capital Markets
    4.7 out of 5 by 807 learners
    3X industry demand
  • Certified Investment Banking Operations Professional
    4.8 out of 5 by 7600 learners
    8X indsutry demand
  • Post Graduate In New Age Banking
    4.6 out of 5 by 1726 learners
    4X industry demand
  • Financial Analysis Prodegree
    Co-created with KPMG
    4.7 out of 5 by 3311 learners
    4X indsutry demand

Regulatory Challenges

IFRS 9 is an international standard set by the International Accounting Standards Board (IASB) which focuses on financial instruments. It is a complete set of requirements and constraints which are to be met by the banks. This results in a lot of complexity and adjustments for investment bankers. The international regulatory organization BASEL has also increased the minimum capital requirements for banks from 2% in BASEL II to 4.5% in BASEL III. These adjustments sometimes come harsh on the banking sector and change the business behaviour of many financial institutions.

Cross-selling

Investment banks are required to collect information on their clients and measure their satisfaction level. In this era of competition, banks have to come up with new services every now and then for their existing clients in order to plant the seed of loyalty in their clients. In order to remain competitive, there is a lot of diversity in the services offered by the banks. To manage the needs of all the clients and then coming with new services accordingly is a tedious job and a challenge in the investment banking sector.

Profitability issues

The introduction of BASEL III has hampered the product profitability a lot. These shifts and changes also affect the structured derivatives and profit or return of equity (ROE). Banks have to constantly dig into their system and find out the loopholes and have to get rid of unprofitable transactions and services. The capital management has to be accurate as we all say ‘Capital is scarce’.

Cross border activities

Many financial institutions are known for providing services globally, global banking is a trillion-dollar industry in the current era. But these cross-border activities are not easy. You must have heard about the disadvantages of recently famous cryptocurrency Bitcoin. Blockchain is another method used for cross border payments but its trustworthiness is always questioned. There is always vulnerability from theft and fraud. Also, major disruptions and changes come to end investment banking because of cross border activities. A good investment banker needs to adapt and cope up with these changes.

Cost optimisation

The governmental formalities and laws are to be followed very strictly by the financial institutions. The recent laws and the ROE hits have forced bankers to optimise their production costs. The cost of services that are to be offered to the clients must not end in loss. Investment bankers have to do risk analysis and cost management.

Increase in Digital banking

Digital banking is growing more than ever. To transform and adapt to this pace is very important for the banks.

Cybersecurity

There are various types of cyber-attacks and the financial institutions are always vulnerable to such theft and fraud. There must be strict network security algorithms installed in the bank servers. If the banks have to transform in this era of digitisation, they have to cope up with the flaws.

Non-cleared derivatives

Banks have to settle all the derivatives in order to sustain. But the collateral damage suffered by the financial institutions makes it even tougher to deal with such unsettled derivatives. They have to implement a standard model to deal with OTC derivatives, this model should be proposed in such a way that it helps in identifying disruptions and helps in dealing with collateral damage.

Conclusion

You must have heard about the foreign financial institutions catching the ‘Fintech Fever’. Often, we can hear owners of foreign banks saying it is a threat to centralised banking. They have to cope up with all these cross-border activities and disruptions. Ranging from inflation to cyber threats, there are a lot of challenges faced by the investment bankers. In India too, these challenges are faced by the investment banking sector. But then again, the investment banking sector is very profitable if managed well. A good investment banker must know the ways of dealing with these challenges. This article was all about current and future challenges and changes in the investment banking sector.

For Online Course Enquiries
About Imarticus
Imarticus Learning is India’s leading professional education institute that offers training in Financial Services, Data Analytics & Technology. We’ve successfully transformed careers of over 35,000+ individuals globally through our Certification, Prodegree, and Post Graduate programs offered in association with leading and renowned global organisations in the Financial Services, Data Analytics & Technology domain.
Related course
  • Post Graduate
    Post Graduate Program In Finance And Accounting
    Co-created with Grant Thornton
    Course duration(months)
    4
    Upcoming batches
    1
    Organizations enrolled
    20
    4.9 out of 5 by 238 learners
    14 X industry demand
    Upcoming Batches
    Date Location Schedule
    None DELHI Online
    Date Location Schedule
  • Prodegree
    Professional Certification in FinTech
    Co-created with SP Jain School of Global Management
    Course duration(Months)
    4
    Upcoming batches
    1
    Organizations enrolled
    20
    4.6 out of 5 by 1250 learners
    6X industry demand
    Upcoming Batches
    Date Location Schedule
    none ONLINE Online
    Date Location Schedule
  • PRODEGREE
    Credit Risk and Underwriting Prodegree
    Co-created with Moody’s Analytics
    Course duration(Months)
    3
    Upcoming batches
    1
    Organizations enrolled
    20
    4.5 out of 5 by 526 learners
    4X industry demand
    Upcoming Batches
    Date Location Schedule
    30th-May ONLINE Weekend
    Date Location Schedule
  • Certification
    Banking And Wealth Management Bootcamp
    Course duration(Months)
    2-3
    Upcoming batches
    1
    Organizations enrolled
    20
    4.7 out of 5 by 460 learners
    3X industry demand
    Upcoming Batches
    Date Location Schedule
    Not Available ONLINE Weekend
    Date Location Schedule
  • Post Graduation
    Post Graduate Program In Capital Markets
    Course duration(months)
    4
    Upcoming batches
    1
    Organizations enrolled
    20
    4.7 out of 5 by 807 learners
    3X industry demand
    Upcoming Batches
    Date Location Schedule
    Not Available ONLINE Online
    Date Location Schedule
  • Certification
    Certified Investment Banking Operations Professional
    Course duration(Months)
    2-3
    Upcoming batches
    1
    Organizations enrolled
    20
    4.8 out of 5 by 7600 learners
    8X indsutry demand
    Upcoming Batches
    Date Location Schedule
    26th-May THANE Weekday
    Date Location Schedule
  • Post Graduation
    Post Graduate In New Age Banking
    Course duration(months)
    4
    Upcoming batches
    1
    Organizations enrolled
    20
    4.6 out of 5 by 1726 learners
    4X industry demand
    Upcoming Batches
    Date Location Schedule
    None ONLINE Online
    Date Location Schedule
  • Prodegree
    Financial Analysis Prodegree
    Co-created with KPMG
    Course duration(Months)
    3
    Upcoming batches
    1
    Organizations enrolled
    20
    4.7 out of 5 by 3311 learners
    4X indsutry demand
    Upcoming Batches
    Date Location Schedule
    23rd-May ONLINE Weekend
    Date Location Schedule