Summary of Mastering the Value Migration

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Rating

7 Overall

8 Importance

7 Innovation

7 Style

Recommendation

The critical structures and ecosystems of the world’s capital markets are developing and changing as market, technological and political trends take hold. Industry revenues in 2016 rose from the previous year, but investment banks’ share of those revenues declined, as value continued to migrate to competitors such as boutique firms, clearinghouses and exchanges and information providers. getAbstract recommends this expert study from professionals at the Boston Consulting Group to those working in investment banks, exchanges, clearinghouses and other enterprises toiling in the global capital markets. 

In this summary, you will learn

  • What global revenue trends portend for investment banks, clearinghouses, exchanges and other industry participants;
  • Why investment banks are losing revenue share; and
  • What investment banks and other capital market entities must do to remain competitive.
 

About the Authors

Philippe Morel et al. are professionals with the Boston Consulting Group.

 

Summary

Revenue from global capital markets climbed to $656 billion in 2016, up 5% from the previous year. But for the big investment banks, overall proceeds fell 1% in 2016, compared to a decline of 5% in 2015. Banks’ share of total industry revenues has dropped, from 52% in 2006 to 39% in 2016, as nonbank competitors grab a growing piece of the revenue pie. A fourth-quarter gain in investment banks’ fixed income, currencies and commodities (FICC) businesses helped to compensate for declines in equity and primary market income, where competition from boutique firms in M&A overshadowed a modest rise in revenue from debt capital markets issuance. Returns from custodian banking services held steady.

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