Pershing charts the emergence of the virtual investment bank

Source: BNY Mellon Pershing

A new independent study published by Pershing Limited, a BNY Mellon company, and Investance UK plc investigates the drivers behind the growing trend of outsourcing key elements of the investment banking supply chain and how the tightening regulatory climate may be accelerating this trend.

The study, entitled "European Equities: The Advent of the Virtual Investment Bank," examines the changing service provider landscape and considers the impact these changes will have on the European investment banking industry, and in particular on the specialist and more nationally oriented players.

Topics covered in the study include:

* The drivers for outsourcing different components of the investment banking supply chain, with particular emphasis on research, execution and post trade services;
* Analysis on the impact of European regulation and how this continues to affect the European equities landscape;
* The increasing demands on specialist investment banks to offer a full service, whilst retaining focus on their core areas of expertise; and
* How relationship banking is driving client loyalties as the industry prepares for the advent of virtual investment banks.

The study is a component of Pershing's thought-leadership programme, commissioned by Pershing and independently executed by Investance. The analysis is based on in-depth industry research and detailed interviews with leading industry figures and delivers a perceptive view of the evolving European equities asset class.

Scott Coey, director and head of Institutional Broker-Dealer Relationship Management at Pershing Limited said, "One clear finding in this study is that regulatory change is fostering a greater reliance on external service providers. Whether through enhanced integration of front- to back-office functions or delivering greater transparency to investors, institutional broker-dealers will increasingly look to these value-added services to remain viable in the years ahead."

Roger Braybrooks, Head of UK Consulting at Investance said, "The results suggest that broker-dealers of all types should remain open-minded to best practices from across the industry. Newer niche companies should be looking to emulate the strengths of traditional banks, including their powerfulr por powerful brands and scalable processes. Traditional banks, meanwhile, should be looking to build up and demonstrate the capabilities in newer investment strategies and to increase their ability to react quickly to market changes and opportunities."

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