Collaborating with fintech is the key to successful investment banking: Report

Big four accounting firm Ernst and Young and financial technology organization Innovate Finance, have released a report that revealed how collaboration with fintech firms would find numerous opportunities to grow, optimize, protect and control their businesses in ways that were previously not possible.

The report titled ‘Capital Markets; innovation and the FinTech landscape’ highlights that in an environment of declining return on equity (ROE) for investment banks, fintech collaboration will help banks to improve their approach to the market and halt declining return on equity revenues.

“This report highlights the opportunity for FinTechs and capital markets firms to work more closely together. There is no shortage of innovative ideas out there – many of which have become much more feasible thanks to the technology now available,” David Williams, EY Capital Markets Innovation Leader said.

The fintech report recognizes the best team opportunities to be in areas like Robotic Process Automation (RPA), advanced analytics, digital transformation and the outsourcing of processes and services. The report also mentions on how the partnership between fintech firms and investment banks can help in minimizing structural and operational costs, enhance regulatory compliance and deliver better value to shareholders.

“Many investment banks are collaborating with FinTech innovators and partners to better explore how to improve their businesses. This is encouraging, and we believe we will see wider participation taking place in the FinTech landscape as banks seek to exploit some of the new game-changing technologies emerging. The cost of investing in collaboration is low relative to the risk of falling behind technology deployments emerging across the wider investment banking FinTech landscape,” Lawrence Wintermeyer, CEO of Innovate Finance said.

The report also revealed that fintech solutions to investment banking problems, is seeing increased support from regulators and they become more globally connected through regulatory bridges like the one that was established between the UK, Singapore, and Australia.