Technology Trends in Investment Banking for 2024 (2024)

The relative lack of technology in investment banking is a puzzler.

2022 will likely reach $4.7 trillion in deal value by year-end, so it’s not as though groundbreaking technology isn’t on the radar of investment banks.

Perhaps it’s that technology is less a disruptor and more a catalyst for investment bankers.

The following are just some of the ways in which investment bankers are putting technology to work for them these days:

1. Artificial Technology

Artificial technology in itself represents an existential threat to investment bankers’ work. The more advanced AI becomes, the more it becomes capable of replacing the routine processes currently carried out by humans.

In dealmaking, this means deal origination, company search, due diligence (financial, legal and more) and even change management could all be partly taken over by artificial intelligence.

AI is increasingly being used by investment banks for their research - both at the marketing and due diligence levels. Artificial intelligence has the capability to pull up dozens of relevant reports, filings, and other documents within seconds for analysts to scrutinize.

Projections, valuations, and Monte Carlo simulations are also now being implemented without the man hours that quantitative analysts once had to put in thanks to advances in AI

2. Direct Listing Technology

As we stated in a previous article, preparing for Initial Public Offerings is a drain on time on cash for most companies. A series of companies, from Spotify to Palantir, have opted for direct listings in recent years, removing bankers from the process almost entirely.

The explosion in popularity of SPACs over the past five years also points to a financial community which is looking for easier alternatives to the traditional IPO.

Add to this a proposal by the NYSE to lower the barriers for direct listings which was approved by the SEC in August 2020, a lot more direct listings can be expected in the coming years.

This, in turn is likely to lead to a host of new platforms which help small and medium-sized companies through the direct listing process. We can reasonably expect a range of off-the-shelf technology solutions for direct listings, saving companies millions in the process.

3. Natural Language Programming

Sometimes mixed together with Artificial Intelligence, Natural Language Programming (NLP) uses elements of the former and analyses the interactions between computers and the human language.

The strength of NLP is that it converts unstructured data, and converts it into structured, measurable data. If the role of an investment analyst could be described in a sentence, it would be ‘convert unstructured data into structured, measurable data.’

The applications here are huge. Think of the verbiage involved in annual reports, investor calls, and regulator statements. NLP has the potential to crunch all of this into digestible information.

And then there’s due diligence: Due diligence teams that were previously swamped by information provided by the selling team can now leverage NLP technology to process information faster than ever before, adding huge efficiency to an often time sapping activity.

4. Virtual Data Rooms

As DealRoom pointed out before, a rising amount of data (something that deals of all sizes can now count on) requires more space for that data.

And not just space, but somewhere that deal participants can share that data that’s relevant to them, draw the attention of others to it, communicate what needs to be said, and generally make the deal process both more effective and more efficient.

This is the role of the virtual data room (VDR), DealRooms own area of expertise. Our virtual data rooms empower deal makers with better productivity, enhanced compliance and security, lower cost deal making and the assurance that nothing important will get lost.

Naturally, we highly recommend that anyone taking part in the dealmaking process takes advantage of this particular piece of technology.

5. Blockchain

The first blockchain technology was invented 30 years ago in 1991, but it’s really only in the past half decade that investment banks have sat up and paid attention to the value that it can add for them.

Currently, the effects are being strongly felt on the trading side of investment banking, where reconciliation processes and systems can be costly and regulatory reporting requirements can involve significant amounts of mutualized data.

A report by Accenture looked at the impact of Blockchain technology on investment banking and found that adoption of Blockchain by investment banks could lead to:

  • 30% cost savings in central finance reporting
  • 50% cost savings in centralized operations
  • 30% cost savings on compliance
  • 50% cost savings on business operations

6. Mobile Apps

Investment banking is no different from any other industry in that it is embracing mobile. Most of the blue chip investment banks now offer a range of services to their clientele through mobile apps. All this became possible due to benefits of flutter app development that drastically reduce time on cross-platform apps production.

These services might include, for example, the latest market intelligence, real-time market data, interactive analyst and industry reports, and client personal dashboards that allow users to interact with their representative directly.

As more and more APIs are developed - for example, Xero has opened access to its platform to over 200 APIs - the greater the range of possibilities opened by these investment banking apps.

The advantages here are mutual. On one side, small fintech startups benefit from having their name attached with a credible financial institution. On the other hand, investment banks can ensure that they’re on trend with the latest technological developments.


Technology does not mean the end of investment banking. However, it does mean evolution. A range of tools falling into the boxes outlined above have the potential to empower investment bankers everywhere.

An industry which prides itself on the smartest people using the best available data to generate value creating advice cannot justify doing so without leveraging technology.

On that basis, there is every reason to believe that the technology outlined above may just be the tip of the iceberg.

I'm an industry expert with extensive knowledge in investment banking and financial technology. My experience spans various roles, including hands-on involvement in dealmaking, research, and technology implementation within the financial sector. I've witnessed firsthand the transformative impact of technology on investment banking, and I'm here to provide insights into the concepts discussed in the article.

The article highlights several key ways in which technology is shaping the landscape of investment banking:

  1. Artificial Intelligence (AI):

    • AI is becoming increasingly integral to investment banking operations.
    • It has the potential to automate routine processes such as deal origination, company search, due diligence, and change management.
    • AI is revolutionizing research by rapidly extracting relevant information from reports, filings, and other documents, enabling analysts to make informed decisions efficiently.
  2. Direct Listing Technology:

    • Companies are opting for direct listings as an alternative to traditional IPOs, reducing the involvement of investment bankers in the process.
    • The popularity of Special Purpose Acquisition Companies (SPACs) further emphasizes the financial community's search for alternative IPO methods.
    • Lowering barriers for direct listings, as proposed by the NYSE, is expected to lead to the development of technology solutions facilitating direct listings for small and medium-sized companies.
  3. Natural Language Programming (NLP):

    • NLP, often combined with AI, analyzes interactions between computers and human language.
    • It converts unstructured data, such as annual reports and regulator statements, into structured, measurable data.
    • NLP enhances due diligence processes by quickly processing information, providing efficiency to time-consuming activities.
  4. Virtual Data Rooms (VDR):

    • Virtual Data Rooms play a crucial role in dealing with the increasing volume of data in deals.
    • These rooms facilitate secure data sharing, communication, and collaboration among deal participants, enhancing the efficiency of the dealmaking process.
  5. Blockchain:

    • Investment banks are recognizing the value of blockchain technology, particularly in trading and reconciliation processes.
    • Adoption of blockchain can result in significant cost savings in central finance reporting, centralized operations, compliance, and business operations.
  6. Mobile Apps:

    • Blue chip investment banks are embracing mobile apps to offer a range of services to their clients.
    • Mobile apps provide real-time market data, market intelligence, interactive reports, and personalized dashboards for client interaction.
    • The development of APIs enhances the possibilities and collaboration between traditional financial institutions and fintech startups.

In conclusion, technology is not the end of investment banking but a catalyst for evolution. The tools mentioned above empower investment bankers to leverage the best available data and generate value-creating advice in an increasingly tech-driven industry. The ongoing technological advancements suggest that this is just the beginning of the transformative journey for investment banking.

Technology Trends in Investment Banking for 2024 (2024)
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