Investment Banks and Globalization

1000 WordsApr 24, 20094 Pages
“Global reach and local know how ' investment banks and globalization.” “Investment banks are facing many challenges, not least the need to become global in scope and ambition, but local in understanding and execution”. (Comments on the article by Anshu Jain, head of Deutsche Bank's Global Markets Division). In the article the main though is represented by a statement that: “We cannot easily talk about alternatives to globalisation in investment banking; only of the different strategies for meeting its challenges”. According to the author, globalisation is rather mature phenomenon in the business. Globalising capital flows and ever more sophisticated financial instruments have created extraordinary challenges and opportunities…show more content…
As a result, what began as technology support is now becoming more of analytic operations. Most of the large financial institutions were in the IT side of outsourcing but as they leveraged that experience, they got more interested in moving more of their investment banking and research activities abroad. JPMorgan Chase, for example, is taking its investment banking activities abroad a step further. The company was one of the first investment banks to not only transfer the company's back-office and call-centre operations but to also hire research analysts in India, Hong Kong and Singapore to complement its U.S.-based research team. Some experts expect that as banks become more comfortable with their offshore operations and foreign talent becomes more attuned to the companies' way of doing business, financial institutions may even shift some deal-making responsibility onto its foreign employees. The Deloitte Touche Tohmatsu report indicated that offshore operations give financial services companies a foothold in new and emerging markets such as China, where there are more revenue opportunities than mature markets like the U.S. The report also predicts that driven by the need to take aggressive cost-cutting measures, the financial services industry will move 20 percent of its total costs base offshore by the end of 2010, compared to the current average of 3.5 percent.
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