3 ways investment banks are preparing for a bull market

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Last year was rough on the M&A market. Rising interest rates, geopolitical tensions, and recession fears contributed to heightened market uncertainty, and as a result global M&A volume in 2023 was down 18% YoY—the lowest level in a decade.

But things are looking up for 2024. We surveyed more than 350 investment bankers, and almost 70% of our respondents believe the M&A market will be more active this year. As Federal Reserve Chair Jerome Powell says, “We still have a ways to go. No one is declaring victory”—but despite caution, firms are still preparing for stronger M&A activity in the months to come. 

Our latest report, Signs Investment Banks Are Preparing for a Bull Market, revealed three key findings on what investment bankers are doing to position themselves for success:

  1. Doubling down on relationships to drive deals
  2. Using AI to accelerate deal milestones
  3. Streamlining deal flow management with technology

Read on for a summary of each learning—and download the report to see a full breakdown of the data with commentary from experts.


1. Doubling down on relationships to drive deals

Investment banking is a relationship business. As firms expect an increase in deal volume, they’re continuing to prioritize their valuable networks. While 53% of respondents said they’re expanding their firm’s network, almost half of them are also focused on nurturing existing client relationships.

The simultaneous focus on relationship depth and breadth comes with a sort of inefficiency in trying to do too much. Investment bankers often lack visibility into their firm’s collective network, making it difficult to identify mutual connections and get warm introductions during prospecting. In response to these challenges, and to help uncover opportunities within their existing networks, firms are integrating relationship intelligence into their processes and tools.

2. Using AI to accelerate deal milestones

A full 100% of our respondents said their firms plan on implementing AI this year. This isn’t surprising given the excitement surrounding the technology, but the question is how firms will incorporate AI to accelerate deals. 

When we asked respondents to identify their use or planned use of AI, they said they’re most commonly using it for:

  • Client sourcing—analyzing large datasets to identify prospective clients based on specific criteria
  • Pitching—enhancing pitch materials while saving time putting them together
  • Due diligence—assessing the potential risks and opportunities of a deal
  • Deal management—analyzing key transaction information and automating deal progress tracking

Despite these use cases, 60% of respondents also believe that the time and resources to implement new technologies are the biggest barriers to deploying AI. It will be crucial for firms to find technology that’s easy to adopt and integrates with the tools they’re already using.


3. Streamlining deal flow management with technology

Returning to the need for efficiency with deal flow and relationship management, 65% of firms reported implementing collaboration tools to streamline deal management as they look to increase efficiency in M&A transactions. 

Depending on deal size, it typically takes anywhere from six months to several years to close an M&A deal. That’s a long time to maintain relationships with stakeholders, especially as focus is redirected to live deals. As a result, firms are enhancing their CRMs with technology that tracks all of their contacts, potential clients, and deals in one place.

By centralizing relationship data to surface useful insights on their network, bankers can work more efficiently on closing the highest quality deals. 

How your firm can position itself for more M&A in 2024

Learn how experts from top firms are using new technology in 2024. Get your copy of Affinity’s Signs Investment Banks Are Preparing for a Bull Market report to find out:

  • How top firms are enhancing their CRMs with relationship intelligence
  • The best use cases for AI in investment banking in 2024
  • How firms are centralizing relationship insights for more efficiency


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