Challenges face by investment banks in the pandemic

Challenges face by investment banks in the pandemic While the world is battling the pandemic, investment banking firms in India and all around the world are going to face a real challenge in terms of stabilizing the economy and ensuring that funds are flowing in the circle. It is an unrebutted fact that COVID19 has deeply impacted the global economy, and obviously, the daily lives of the everyone in the world. On the global front, this crisis has brough an important dislocation with spikes and volatility in the volumes of trades, which have created huge challenges in the primary, secondary, derivatives and the funding markets.

The investment banking firms in India and around the globe haven’t escaped the effects of the crisis too. Investment banking companies have had to go through a displacement in their staff too as world-from-home came into effect, which has significantly impacted the operational business functions and the corporate cultures too. The clients of investment banking companies have been impacted too. The highend clients (the top IBs usually deal with) have had to undergo a severe challenge in terms of revenues and cost that have required them to access credit lines in order to maximize the need for COH (Cash on Hand) and make a reduction in expenditure on capital.

Be it the wealth management firms of the investment banks, the investors have been largely affected by the spike in redemptions and the fall of asset values. Governments of several nations have had to introduce monetary and fiscal relaxations in order to boost the economic activity. In United States of America, different institutes of finance have prepared to carry on their businesses in a lower interest rate environment, something that has already been running in other countries’ economies before the pandemic.

There is no doubt in the fact the all the volatility in the markets, rise in volume and demand for services is going to be quite a challenge to navigate for the investment banks. The work environment has in fact got further complicated due to remote

www.avendus.com

working. In most investment banks, the staff has had to operate from the confinements of their home, which also includes a significant portion of the sales and trade of the front-line workforce. Provision on equipment in the overnight shift form office to WFH, supervising the staff that is far away, ensuring collaboration and carrying on business as usual activities in this weird environment are also some of the challenges that the investment banks faced.

The investment banking companies around the world should be applauded for being greatly resilient to pull off work amidst these challenges. While the overall markets are liquid, though volatile, seeing great amounts of fluctuations and operations processes have seen an increase in volumes too. While the world economies are slowly opening with the hope of getting back on track as soon as possible, it is safe to say that investment banks and wealth management firms are going to be on a long journey to raise back the investments of their clients.

www.avendus.com