RESEARCH REPORT

In brief

In brief

  • The MiFID era is having a lasting impact on the way investment research is produced, consumed and charged for.
  • Firms also face severe disruption from COVID-19, plus new market entrants, cost pressures, and radically different client expectations.
  • MiFID II-era compliance holds opportunities for transformation and growth, for reimagining research infrastructure, processes and client experiences.
  • The goal is a connected research ecosystem that delights users, deepens relationships with clients, and supports new growth.


The ground under investment research is shifting

The investment research landscape is changing radically. MiFID II and other regulations are rewiring the rules for investor protection. Financial institutions are being forced to rethink how they do business. The new client-focused regulatory environment is having a lasting impact on the way research is produced, consumed and charged for.

In fact, research shows around 80% of investment banks and asset managers are rethinking their business strategy in response to regulatory changes.

At the same time, firms are having to adapt to a very different set of requirements caused by global COVID-19 disruption on top of the preexisting challenges of new market entrants, cost pressures, and radically different client expectations. They must review their investment research processes and output, acquiring the ability to sense and respond to what researchers, sales teams, clients, and regulators expect and demand.

13.8

billion dollars estimated global industry research sales in 2019

900

million dollars: estimate in the value of corporate access to banks last year, about 12% of their total equities revenues in 2018

40

thousand research reports produced every week by the top 15 global IBs in 2017

3

billion dollars projected loss to banks as asset managers cut back research spending

300

million: reduction in research budgets by asset managers across Europe in 2017

Embrace MiFID II compliance as a platform for growth

Accenture’s view is that financial institutions should treat MiFID II-era compliance not as a burden but as an opportunity for transformation and growth. For many, this calls for a digital transformation of infrastructure, process and client experiences.

By creating a flexible, efficient, future-ready investment research ecosystem, firms can meet regulatory requirements, manage risk, reduce costs, deliver delightful experiences, and start unlocking new pools of value in the post-COVID and post-MiFID world.

The benefits of this user-centric approach include:

Meeting elevated client expectations by increasing transparency and improving research outputs.

  • Increasing revenue over the long term through more client-friendly products and services.
  • Reducing costs by rationalizing operations and digitalizing workflows: especially important as economies struggle to adapt to global COVID-19 disruption.
  • Centralizing investment research infrastructure to promote data quality and provide opportunities for cross-selling.

Let’s reimagine research together

Adapting to the post-MiFID II and post-COVID-19 era will require extensive planning and effort in the short term. In doing so, it’s vital to be able to see the bigger picture. Firms need a clear destination to anchor their transformation journeys: a North Star vision for their future investment research business and operating models.

By viewing the transformation of investment research through a human-first lens, putting a laser focus on user needs, using streamlined digital technologies and platforms, firms won’t only be strengthening their compliance with MiFID II. They’ll also be building a connected research ecosystem that delights users, deepens relationships with clients, and supports new growth for the business as economies rebound from the COVID-19 pandemic.

Don’t get bound up in red tape. Use human-centered innovation to truly understand client, analyst and sales needs. Bring best-of-breed technologies together to rethink how investment research gets done.

Brandon Gerena

Global Industry Lead for Capital Markets – Accenture Interactive


Matthew Long

Managing Director – Accenture Banking, Europe


Keith Jackson

Accenture Capital Markets – North America

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