Future of Investment Banking

10 years ago, investment banking was one of the undisputed leading careers in finance. The so called high finance jobs were extremely stressful and required lots of hours, but were also extremely prestigious all paid well. However, in recent years with the emergence of the tech industry, there has been a shift in traditional investment banking, and it is no longer the most desirable career. Economist Brian DeChesare states that, "Just as technology has disrupted markets like transportation (Uber), lodging (Airbnb), and consumer lending (Lending Club), it might soon disrupt investment banking itself." While Investment Banking was once the top of finance, it's been pushed off its position by venture capitalism and more tech centered jobs, shown by how students from top schools apply more to venture capitalist companies than traditional investment banking ones.
DeChesare states that, "Back in the real world, though, bankers exist because of fundamental business needs: companies want to raise capital and acquire other companies, and investment bankers have the connections and expertise to execute these transactions." However, with the creation of websites such as Angel Investor and more venture capitalist funds, companies prefer acquiring other companies or investing in them rather than relying on investment bankers or hedge funds. If this trend continues, we will soon see much more capital from companies in venture capitalist, growing the tech industry at the expense of investment banks.
In order to combat this, investment bankers should focus more on acquiring companies and grow their San Francisco offices, which have much more access to tech companies and entrepreneurship than the traditional New York offices. Furthermore, they should try to lose the traditional prestigious background of investment banking and try to reach out more to small startups with large potential for growth and profit.

Source:
https://www.mergersandinquisitions.com/future-of-investment-banking-2015/

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