85% of investment bank clients are ready to switch to non-banking firms, study finds

Non-Bank Competition and Customer Dissatisfaction

The Capgemini Research Institute reports that 85% of corporate clients of investment banks plan to turn to non-banking financial institutions within the next 12 months, seeking faster, more transparent, and more responsive services. Clients are expressing specific expectations: real-time responsiveness (58%), personalized interaction (49%), and innovative solutions (40%). However, only 23% of clients feel that investment banks currently meet these needs. The report identifies several shortcomings: limited integration with ERP and treasury systems, requiring manual processing (92%), a lack of personalization and flexibility (89%), and insufficient capabilities in advanced analytics and forecasting (68%).

Inadequate Technology Investments and Slowing Growth

According to the report from the Capgemini Research Institute, the current innovation programs of banking and financial institutions (BFI) are not delivering the expected results: 82% of senior executives report that these efforts have not increased revenue through new products, while 51% say that they have not achieved the anticipated cost savings. Banks have limited resources to make up for this shortfall: only 29% of the IT budget is allocated to transformational technologies, compared to 43% dedicated to the operation and maintenance of existing systems.
Furthermore, 61% of senior executives at BFIs indicate they are hindered by high compliance costs. The institute also notes a slowdown in the sector's growth, with a projected compound annual growth rate of 5.4% for the next five years, compared to 6.5% between 2022 and 2024. Despite these challenges, BFIs are prioritizing real-time cash management capabilities for cross-border flows (77%), new AI-based products (65%), and tokenized products (51%) to create new sources of fees.