The importance of the right offshoring partner for investment banks
Published on June 9, 2021 by Prasanna Kumar
The pandemic has resulted in previously unthinkable changes to the way investment banks and financial advisory firms conduct business, in fact, to the way almost all industries function. Virtual client meetings, remote deal origination and execution, and global workforces working remotely are now part of the new normal. Many of the new ways of working are likely to continue in the post-pandemic world. The way the investment banking sector has settled into a remote and virtual environment has clearly accelerated the role of specialist outsourced analytics and research providers as a key part of an investment bank’s ecosystem. For knowledge process outsourcing (KPO) firms, the pandemic has provided an opportunity to showcase the value proposition of providing operational flexibility, high-value and high-quality services, and technology efficiency to investment banks and advisory firms.
The evolution of the KPO model in brief
The offshore research and analytics industry for investment banking has continued to evolve in the past two decades. From being primarily cost arbitrage-driven during its inception, it now offers a highly skilled platform with relevant tech solutions, driving cost-effective growth for clients worldwide.
Pandemic-induced challenges and opportunities:
The pandemic has brought about a new thought process for shared services in general, and for financial services outsourcing in particular. It has challenged conventional wisdom and long-held orthodoxies, opening the way for better performance and greater efficiencies from outsourcing. The graphic below represents the new wisdom and accelerated benefits of the changes brought about by the pandemic.
The global work-from-home (WFH) environment in investment banking has brought two aspects of the outsourcing industry to the forefront: its effective services delivery model and the role of technology implementation. Acuity Knowledge Partners (Acuity), a leading provider of high-value research, analytics and business intelligence to the financial services sector, has delivered on both counts to support its investment banking clients as a true partner.
(1) Flexible service delivery models and scale: Investment banking deal activity, especially M&A, was severely impacted in 1Q and 2Q 2020 due to pandemic-induced disruption of the global economy. As investment banks and advisory firms adjusted their business to focus on areas such as restructuring, debt and equity capital raising, and SPACs, Acuity was able to provide flexibility and the relevant skill sets to navigate these transitions. With the return of M&A and market activity in 2021, Acuity has again provided much-needed staff augmentation to enable its clients to accelerate their growth.
- (i) Scaling up specialist practices: Acuity has a large client base of over 350 clients, of which 100 were added in the past 18 months. With over 3,500 employees globally, Acuity provides scale and subject-matter expertise in specialist areas such as debt advisory, restructuring, SPACs, public finance and sustainable finance, all of which have seen increased focus in the past 12 months. Flexible engagement models have enabled investment banking and advisory clients to ramp up their Acuity teams in a matter of days, and Acuity has grown its investment banking and advisory client roster significantly in the past two quarters; more than 80 such clients now have Acuity as their trusted partner.
- (ii) Integrated delivery model: When the WFH framework was implemented, the natural advantage of investment banking teams sitting next to each other in onsite locations was eliminated. This has led to increased confidence in using outsourcing firms for both value-added tasks and complex projects as well as for ancillary services such as BIS (library services) and DTP (presentations and graphics). Acuity provides 24*7 BIS and DTP services in multiple languages to clients globally. These became an immediate success with Acuity’s clients as bankers realised the benefits of accessing a wider talent pool and taking advantage of the time-zone benefits that Acuity’s global delivery centres provide.
(2) Technology: In this digital era, technology integration has become a strategic business imperative for investment banks seeking to innovate and move fast. Technology is a competitive differentiator that facilitates enhancement of service quality and enables cost-effective growth. Investment banks are in need of technology tools that not only free up a banker’s time but also reduce costs and time to market.
Acuity’s tech solutions for investment banking are core to our business strategy. Our proprietary technology platform, Business Excellence and Automated Tools (BEAT), offers a suite of automation and AI/ML solutions targeting deal origination and execution at an investment bank. These discrete apps have enabled investment banks to realise productivity and efficiency gains in day-to-day operations, and have empowered globally located teams to collaborate, leverage and communicate work in a more real-time and efficient manner.
Acuity’s BEAT suite for investment bankers includes SaaS applications such as the following:
- BEATFlow: Online workflow management, centralised knowledge repository and live reporting (learn more)
- TombstoneHub: Automated credentials builder with centralised tombstone repository (learn more)
- FilingsHub: Centralised platform for financial and regulatory filings from across the world (learn more)
- ProfileHub: Online platform to manage and automate customised company profiles (learn more)
Amid the pandemic, Acuity’s BEAT solutions have gained prominence and become a key part of our services to investment banking and advisory clients. With more client deployments and real-time feedback implementation, the BEAT toolkit is improving and growing continuously.
In these very uncertain times for the investment banking sector, Acuity continues to demonstrate the true value proposition of the right outsourcing partner, enabling our clients to ride the highs and lows of business cycles effectively.
About the Author
Prasanna Kumar, Associate Director, has over 16 years of experience in global capital markets –Investment Banking and Investment Research. His responsibilities include managing one of the IB engagements and relationship, coordinating with staffers and bankers on new initiatives and services, soliciting feedback, working with teams to identify and improve efficiencies and productivity, training team members on complex and value-added analysis, and implementing industry best practices in the Acuity team for IB Analytics.
Prior to taking up the dedicated role with the account in 2014, Prasanna was working as part of Projects and Transition team gained experience in business development and equity research (financial modeling, report writing, relative valuation and precedent transaction analysis, and economic and sector research)