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Investment Banking Client Survey: Making research count

Accenture examines the value clients place on research by breaking down the findings from its Investment Banking Client Survey.

Overview

Research continues to be one of the most visible ways in which an investment bank can make an impression on its clients, yet many of those clients are not necessarily willing to pay a premium for that research. The challenge for banks now is to meet demand for a product while delivering value to clients.

Drawing from the findings of Accenture’s survey of fund managers and corporate executives, this report in our Investment Banking Client Survey series looks at how clients value research that investment banks produce.

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Key Findings

The financial services industry has been through a period of exceptional turmoil over the past few years, driving down revenues and necessitating extensive cost restructuring across most banks. But investment banking is now entering a new phase, one where controlling costs remains an absolute priority, but so too does finding new areas of revenue growth. Looking at the services delivered to investment banking clients and discerning where they are finding value, what services clients expect as a matter of course, and what services and products they are willing to pay extra to receive, can give banks important insights in their strategic decision making.

When it comes to investment banking clients’ perspectives on research, the following findings emerged:

  • Research was the second most important factor influencing clients’ choice of an investment bank; only price was more important.

  • Clients have a view as to what should be a core, basic service; written research is part of this core service.

  • Beyond basic research, there is a hierarchy of value, with access to analysts being particularly valued.

  • General industry thematic research, particularly with commercial insights, is often more valued than specific, company-focused research.

  • High-touch communications matter: most valued is either one-on-one time with analysts or telephone calls; e-mailing research is the least valued form of communication.

Recommendations

Investment banks face an obvious challenge when it comes to research: to meet demand for a product for which, in its basic form, clients are unwilling to pay a premium. This challenge is made all the more acute by downward pressure on traditional research-driven revenue streams. For investment banks research operations, this points to a number of ways to drive value:

  • Establish a depth of knowledge that enables premium pricing.

  • Expand research into areas where demand is still growing rapidly, but coverage remains low.

  • Develop a research operating model where low-cost centers help with simple analytics.

  • Take top clients ‘up the value curve’ in terms of the research offering, focusing on the clients who will pay more for content and the specific research content they value most.

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