01 Jul The Future of Investment Banking: Assessing the Economic Impact of Artificial Intelligence and Decision-making

Carlo Brooks

IE University

E-mail: crbrooks.ieu2024@student.ie.edu

Abstract

Artificial Intelligence (AI) is rapidly reshaping investment banking (IB), driving advancements in risk assessment, algorithmic trading, and client engagement. Its integration has significantly enhanced operational efficiency and data analysis, reducing decision-making time across firms. However, the growing economic and operational reliance on AI raises ethical concerns and challenges the traditional human-centric model of IB as well as leading to job displacement. As AI becomes increasingly prevalent across bulge bracket and elite boutique firms, the lack of standardised policies creates uncertainty and potential inequities within the industry. This study explores the impact of AI on the structure and culture of investment banking, with a focus on its influence on workforce dynamics, employee satisfaction, and long-term industry stability. Using a mixed-methods approach, the research examines both the economic and ethical implications of AI adoption in leading financial centres such as New York and London, while attempting to predict the future of AI’s role in the industry.

READ THE FULL ARTICLE HERE (Page 85-92)

Keywords: Investment Banking, Artificial Intelligence, ChatGPT, Automation