How Has AI Changed Investment Banking?

The adoption, development and application of AI is fast becoming a strategic priority for futureproofed investment banks. It represents a commitment to finding the very best value in services for partners and clients and demonstrates a dedication to using cutting edge technology-driven processes. And both elements are beginning to define what success looks like in the industry. 

2025 has demonstrated the importance of AI for financial services firms looking to increase their competitive advantage, maintain expectations from investors and boost further client acquisition and retention. From a top-down perspective, the message is clear. Recent innovations such as Barclays’ decision to fully embrace Microsoft 365 Copilot amongst its global colleagues with a massive rollout to 100,000 of their team is a great example of this in action. It employs agentic AI to make moments like finding information and assuring company compliance a simple process. All with huge boosts to productivity included. 

Finding AI Focus for Your Firm 

Understandably, the pressure to invest in AI & Machine Learning, and develop the AI applications that are already in use, is becoming huge in an increasingly short timeframe. The focus here is to not only keep up, but to get ahead. 

Of course, this can be a daunting and somewhat overwhelming task without the specialist and practical knowledge, experience and skillset of a technology partner. Let’s look at how to support a deeper understanding for investment banking firms in the UK where all this is concerned. 

Assessing The Current AI Landscape  

The success of generative AI and Generative Analysis for investment banking has been swift and wide reaching over the first generation of adoption and application. It’s built on the firm foundations that the sector has already employed for many years using Machine Learning and advanced large-scale models. 

Operations & Risk Management has benefited from automated reconciliations and advanced risk modelling that has made resource allocation leaner and improved compliance too.  

Client intelligence and research has been transformed with access to massive data sets that make pitch book and target acquisition more sophisticated in less time.  

And the Mergers and Acquisitions processes are often boosted by due diligence tasks and use cases that can now be completed in hours instead of weeks.  

With so much emphasis on staying safe and secure as AI tools, and applications embed into your infrastructure, it’s important to maintain strong cyber security for financial services teams and get a heads up of everything for the road that lies ahead. 

The AI Roadmap for The Near Future 

The next generation for AI in financial services looks set to have an even more transformative effect on the industry, with new teams and capabilities being created as older manual and mundane tasks are liberated from the back office.  

There are strong signs that benefits and adaptations driven by AI will further connect themselves into higher value workflows and operations for investment banking firms. Highlighting these will help inform new strategies and goals that require attention now, to stay on track with the industry at large. 

Improving Margins 

The idea of applying Digital Twins of business units inside investment banking firms is accelerating rapidly. As is always the case in the application of technology; people power the progress of change.  Through an identification of how efficiencies can be made across the workflow, systems can be optimised to take care of the bottleneck. More and more repetitive operational tasks for the day to day running of a firm will quickly fall under AI automation and the benefits can be striking for the bottom line. 

McKinsey recently noted that banks that adopt AI at scale in operations can easily see productivity increases of up to 25%, and a 14% profit margin boost, in just 18 months. 

Enhancing Decision Making 

Having access to valuable data drives almost all decision making in the modern workplace.  One of the eventual goals for AI in Investment Banking will be to create new decision support systems for Managing Directors and Chief Investment Officers that provide scenario simulations, probabilistic forecasting and all-round assistance to fuel their actions. Importantly, Explainable AI (XAI), will also support this by confidently demonstrating to a user exactly how they have arrived at their outcomes.   

As ever, this should not be viewed as an out of the box solution of course.  It requires focussed data, engineering and infrastructure work carried out with expert partners that have done the necessary work to align the technology with the individual business configuration, processes and aims. Once this can be safely achieved, any accompanying strategy will be equipped with a nuance and level of tailoring that has simply never been available before. 

Creating Smarter Products 

The ability to simulate environments, models, outcomes and thousands of permutations for credit baskets and test how they will perform using AI is groundbreaking. The new ultra-detailed level of personalised financial instruments can be asked to pull in anything from ESG preferences and activity, global trends, tax positioning and overall sentiment. As a result, products for investment banking will very rarely be the out of the box or boiler plate foundations that the industry was built on 

The Accenture report Reinvention in the Age of Generative AI from 2024 highlighted how one bank had recently delivered 16 million of these hyper-personalised offers within three months of building an AI-powered marketing solution. A 10% revenue increase was quickly realised as a result. 

Regulatory Reform & Risk Management 

The changes that AI is bringing to the industry are of course not limited to firms. The industry itself is embracing the technology for use in the ongoing regulatory reform, compliance and auditing standards that will be expected in the very near future. This will make regulation a live process with audits being conducted in real time and all systems to have mandatory bias detection, stress testing and complete explainability for the models used. A new proactive culture is forming to flag breaches before they appear and validate every decision and action taken. 

Encouraging Mass Adoption 

It’s easy to view the AI era for investment banking as something that teams and people could be passive towards, under an assumption that the technology will step in and productivity goes up. However, the truth is that it will be the essential experiences and real world understanding of people that will dictate how successful the new systems are and how they help progress.  

That’s why the widest adoption across the board should be encouraged in a way that’s always driven by business leaders. As AI tools such as Copilot Studio are consistently showing, the connection between human understanding, data and tech tools is the key to making everything work in the best way possible. The AI agents that can be created and tested for workflows and team tasks in Copilot are perhaps the greatest example of how this is achieved. 

Look. Build. Share
The Key to AI Adoption 

It does also reinforce how vital it is to engage with AI in the first place. Viewing the tools and learning about their capability is the first step that every role in the firm can easily do. From there, building is the logical next steps, and the user-friendly interfaces of Copilot and similar AI, make this a simple process for creation and testing. Sharing ideas, efficiency propositions and the outcome of the first two steps is perhaps the most important. It allows a connection across the entire firm that will avoid duplication for any development and provide the most comprehensive outlook of your business to look for progress and valuable use cases. 

BCN & Investment Banking 

BCN understands AI for Investment banking firms. We combine sector specific knowledge of roles, tasks and workflows with comprehensive experience in AI tools, research and application within business infrastructures. Our commitment as technology partner is built around creating and maintaining exactly the right solution that scales alongside your firm.  

Our status as one of the very few MSPs in the country to hold all six Microsoft partner accreditations for the modern workplace puts us at a great advantage. Specifically, our experience as a Microsoft partner for Data & AI is a fantastic resource that every BCN client will benefit from.