Fortune favours the digitally prepared
One thing I have been reminded of time and again in the past 15 months is that unforeseen things happen and we must prepare for all eventualities. Another lesson learnt is the importance of existing in a secure, digitally optimised environment – digital adoption has accelerated in ways we would not have predicted before the pandemic.
Despite the widespread negative effects of COVID-19 in a wide range of industries across the world, many sell side firms thrived, largely due to trading volumes and to traditional investment banking services such as corporate advisory. According to Refinitiv, global investment banking fees reached $128 billion during 2020, an 18 percent increase on 2019 and the best year since records began. Firms were busy just keeping up with demand, and those with legacy systems were too busy to even contemplate improving their processes, workflows and technology tools, despite the additional capacity and freeing up of resources that this would have afforded.
A survey conducted for Singletrack in 2020 highlighted that sell side firms also wished to produce better data and analytics across their businesses to improve decision making and generate efficiencies, yet felt impeded by existing systems and data silos.
Fast forward to 2021 and we are now looking forward to a new post-pandemic normal. It is a world that is more digitally connected, where data is at the forefront of decision-making and where sell side firms need to leverage every last piece of client information in order to compete. From conversations with clients and others in the industry, I would say that the key areas for attention are reducing client attrition, improving talent retention, finding and servicing new clients and monetising nuggets of information which surface, such as a client revisiting some old research or attending a roadshow outside their usual remit.
With limited time and resources available, how can you make the necessary adjustments in order to compete? First, be clear about your objectives: are you planning aggressive growth perhaps, or geographic expansion, or to adjust your decision-making to make it more evidence-based? Whatever your aim, state it clearly and revisit often.
Second – don’t go it alone! I have seen many examples of firms building their own client engagement solutions, or attempting to adapt a standard one to their specific capital markets workflow. It’s time-consuming and never-ending. Find a partner firm with market expertise and implementation knowledge who can do the heavy lifting for you, even to the extent of handing your data migration and designing specific workflow solutions for you. Third, and critical to success, bring your team along with you – because the best designed system in the world is useless if the data is poor. Ask for their input, create champions, give regular updates, deliver on time and train, train, train.
In 2022, just a few months away, sell side firms need to be fully digitally mobilised, equipped to know how to service clients appropriately and cost-effectively and with all client and prospect data residing in one powerful data hub that can provide business insights and drive behavioural change. Singletrack’s survey underlined that firms’ priorities were around smart servicing, data science capabilities and data analytics. In response, we have launched the Singletrack Accelerator – a fast-track solution for independent investment banks who want to transform their client engagement but are resource constrained and/or wary of taking on a significant project in these unusual times. Our combination of advanced software and expert implementation (all handled in-house) means that we can offer time to ROI of six months or less, depending on your requirements. If you’d like to learn more, please contact me.