Ninety-six Percent of Investment Bank Clients are Satisfied with Their
Bank, but a Majority would be willing to Switch for Better Risk
Management and Trading Services, Even if They had to Pay a Premium
NEW YORK & LONDON--(BUSINESS WIRE)--
A recent Accenture (NYSE:ACN) survey of investment bank clients in the
US and UK found that 96 percent of clients are generally satisfied and
would recommend their bank to others. Despite the turmoil in the
industry, only one-third (33 percent) have changed their primary bank
since the financial crisis.
"Investment bank clients have remained loyal to their primary banks
since the financial crisis," said Dean Jayson, research author and
managing director of Accenture's Capital Markets Industry Practice for
Europe, Africa and Latin America. "But our research shows they are
shifting their focus back to basics - looking for simple products and
trading services, and increasingly demanding higher quality service and
The survey of 100 corporate and asset/fund managers found that clients
would be willing to switch banks if another provider had substantially
better offerings in risk management (60 percent) and trading services
(43 percent), even if they had to pay a premium. Eighty-one percent of
clients said they would pay a premium for risk management services; 65
percent of asset or fund managers and 84 percent of corporate clients
would also pay a premium for better trading tools/services.
According to the research, clients claim the top two factors they
consider when choosing an investment bank are price (65 percent) and
research provided (52 percent), and the most common reasons cited for
switching banks are because of more competitive pricing and better
quality of products. Nearly one in five clients (19 percent) report
noticing a change in their bank's strategy since 2008 that negatively
impacted them, such as increased fees and less research produced.
"Profitability pressures will continue to drive fee increases and impact
the research services provided by investment banks until the banks are
able to significantly reduce their high fixed costs," continued Jayson.
"Digital technologies can be used to simplify their operations,
providing banks with a platform to achieve sustainable competitive
advantage. Digital capabilities such as analytics, collaboration tools
and cloud technology can help banks meet client demands while remaining
price competitive, and provide a differentiated experience."
Clients of investment banks are increasingly incorporating digital
technologies into their own businesses. According to the survey, 34
percent of clients are already using big data and analytics to gain
insights into their customers' behaviors, while an additional 41 percent
are actively watching the trend. Thirty percent of clients are either
already using social media or are developing plans to do so and see
social media as potentially adding significant value as a business tool.
"Investment banks' clients are demanding a digital experience from their
banks," added Jonathan Firester, research co-author and a managing
director in Accenture's North America Capital Markets Industry Practice.
"This includes access to secure web portals and the ability to trade
electronically across various products. Post-crisis, investment banks
have focused primarily on modifying their IT systems for regulatory
compliance, limiting their development of important client-facing
innovations. Without significant transformation in the back office,
banks will find it difficult to improve front-office service."
"Looking ahead, the next five years could be a perfect storm for banks
as they face imminent regulatory deadlines, increasing investor
impatience, increased client demands, and the proliferation of digital
technologies. Banks making preparations to confront each of these
challenges stand to gain significant market share," concluded Firester.
About the Survey
Accenture conducted 100 interviews of investment bank clients to
understand what services they use and value from investment banks.
Clients consisted of 50 corporate respondents and 50 asset and fund
managers, half based in the UK and half based in the US. The interviews
were completed in August 2013.
Accenture is a global management consulting, technology services and
outsourcing company, with approximately 281,000 people serving clients
in more than 120 countries. Combining unparalleled experience,
comprehensive capabilities across all industries and business functions,
and extensive research on the world's most successful companies,
Accenture collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page
Accenture Trading Services is a business service within Accenture's
Financial Services operating group that provides consulting, technology
and BPO services to help banks increase efficiencies at every stage of
the trading lifecycle.