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25.3.2021 7 INTERVIEW ways for investment banks to modern- ise. "While the creation of a completely new bank is appealing, since it allows CIBs [corporate and investment banks] to take advantage of the latest technol- ogy and avoid legacy issues, building a new bank is a massively complex un- dertaking that can take years to scale," Boston Consulting Group (BCG) noted in March 2020. e management-con- sulting firm also acknowledged that such institutions are well aware that it will likely take several years to complete a traditional IT (information technolo- gy) transformation and that the results could still end up lagging customer and user expectations. at said, investment banks do not necessarily have to undertake a com- prehensive internal transformation if such a task requires significant time and cost. With banks facing growing com- petition from digital start-ups that tend to be more cost-efficient and flexible with lighter digital infrastructure, exist- ing banking behemoths are unlikely to be able to outmanoeuvre them simply by implementing their own internal re- structuring programmes. Instead, some may choose to create "partner ecosys- tems" that can plug essential service gaps in their portfolios as well as lower their overall cost structures. BCG iden- tified three examples of such partner- ships: • outsourcing some or all of a bank's IT and operations to ecosystem players, such as security-services firms, to channel resources to- ward activities that add more val- ue, • creating a shared-services model with other regional banks to pool IT and staffing, • forging strategic partnerships with proprietary or principal trading firms to maintain market share in high-frequency trading activities. Compared to historical infrastructure, moreover, Acuity Knowledge Part- ners sees digital platforms impacting investment banks through leveraging knowledge of historical transactions, providing interactive scenarios that are used in client discussions, offering data visualization and developing new anal- yses. "Overall, this is building efficiency, providing deeper insights and analysis, automating standard tasks, and ena- bling bankers to focus their bandwidth on winning more deals," Acuity recently stated. Deloitte has identified four key factors that are critical for investment banks to deliver a successful digital transforma- tion: 1. Disciplined program manage- ment: Governance tactics to boost effectiveness, including identifying a chief product own- er, establishing an advisory coun- cil, starting a design authority board composed of technical sub- ject-matter experts and creating an innovation-sensing and rapid prototyping workstream; 2. Clear business definition: A hu- man-centred planning approach that builds on a foundation of deep user insight, clearly artic- ulates user needs and defines a future experience that addresses broader opportunities; 3. Effective technology delivery: Challenges to anticipate include managing visibility and entitle- ment access to deals and records, determining the appropriate in- tegration toolset for the organi- sation, delivering comprehensive visualisations of all available data and managing the wealth of con- tact and relationship data; 4. Readiness for ownership: is might involve conducting peri- odic risk assessments to identi- fy gaps in awareness, using an idea-collaboration platform to source features and gauge audi- ence sentiment, and understand- ing business outcomes valued by executive management. Looking forward, it would seem that investment banking will continue to have sufficient barriers to entry in place to retain its market share over the long term, examples of which include high capital requirements, costly regulatory burdens, skills of the investment bank- ers themselves and long-term relation- ships that have been forged with cli- ents, which in several cases have lasted several generations. at said, Deloitte stresses that those who are keen on capitalising on the future amidst shift- ing market dynamics should consider relinquishing expensive internal infra- structures and moving toward a con- nected flow model through which out- side providers offer services for both critical and non-critical functions. "In this new environment, the investment bank's ability to create and harness dif- ferential insights from data becomes its new competitive advantage." Ultimately, some degree of reinven- tion of age-old business models will be required for the space to survive and, indeed, thrive over the long term. is will involve adopting technolo- gies such as artificial intelligence (AI), machine learning (ML) and natural language processing (NLP) to develop digital platforms that can ultimately impact bankers' workflow, client cov- erage and data analyses. And although restructuring internal ecosystems to integrate digital technologies is likely to be a resource-intensive process, it seems increasingly apparent that it is of paramount importance for investment banking to maintain long-term compet- itiveness, maximise the customer expe- rience and best utilise data for optimal decision-making.