Investment banks are currently facing numerous major challenges from the changing business environment -
Products and transactions are becoming increasingly complex and global in nature, and competition within the industry is becoming ever more intense.
Banks must also conform to the many limitations imposed by statutory and political authorities regulating their practices.
All the while, there is currently heightened need for them to address and satisfy consistently changing customer demands, drive and capture multiple sources of revenue, and reduce transaction costs. These forces are pressuring investment banks to seek out new models to simplify their operations.
Implementing and enhancing online, or eCommerce, models will better equip investment banks to meet these challenges. Web-based technologies enable investment banks to integrate the various customer channels and improve customer relationship management.
The many features included in online models include enhance customers' accessibility to transactional services while lowering overhead costs compared to retail banking methods. Even seemingly simple features, such as MSM and text messaging, can make a major difference in customer relations. Banks can use such programs to send a customer a quick alert regarding a low balance or just a basic greeting.
Additional options, such as online supply chain management systems, can lead to tremendous gains as well. These systems greatly enhance the flow of information for financial management concerns, enabling banks to better allocate their resources and improve STP (straight-through-processing) operations.
Enhancing the flow of information to customers and between units will increase banks' response rates and improve communications among personnel. Such improvements will, in turn, lead to greater sales potential, efficiency in processing information, and better risk management capabilities.
Web-based solutions can also increase efficiency and coordination for finance functions that improve communication flows both within finance functions and between the finance function and the various business units. Such improved communications increase investment banks' ability to track performance and thereby assist management personnel to better fulfill investor expectations.
The information flows also contribute to risk management strategies, as banks gain a better understanding of the costs of doing business and the value at risk created by particular business groups and activities.
Online solutions have much to contribute to the future of investment banking. Banks that adopt such models will benefit from a higher transaction volume, greater earnings, and a stronger business reputation.
Robin C. Trehan is a specialist in the financial advisory and M&A. He can be reached at robin@tafunds.comJerome Cedicci is a renowned real estate and hotel developer in USA. He can be reached at www.tafunds.com 
