The Capital Markets’ Industrial Revolution


Interesting comparison from GreySpark in their latest research report. Comparing the digital transformation of investment banking to the automation of manufacturing processes in industries such as motor and aircraft manufacturers.

Their report draws analogies, between investment banking, and the motor and aircraft industries, which also experienced heavy regulatory burden, regular government interference, ever evolving demand patterns, regular bouts of over-capacity and a critical requirement to pool resources in order to innovate.

In their opinion, banks will reinvent their operating models on three pillars:

  1. A fully-automated manufacturing plant for the creation, assembly and packaging of financial products and services.
  2. A multi-channel distribution franchise that provides a consistent user experience for all interactions between the bank and its clients.
  3. Data managed as an asset across the entire supply chain.

The adoption of this new operating model has significant implications:

  • Investment banks’ supply and value chains will invariably extend beyond the enterprise and incorporate suppliers, partners, market infrastructure and shared utilities.
  • The number of joint-ventures and strategic alliances between complementary institutions will multiply as banks focus on their core expertise, client franchises and geographies.
  • As value creation will be effectively distributed across functions, the manner in which it is accounted for will also change – determining where key decisions are made and how individual contributions are rewarded.

Link to report here (behind paywall):

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