Investment banking innovations as a response to current threats to sustainable development

Abstract

The study was devoted to analysing the impact of the latest technologies, such as blockchain, artificial intelligence, algorithmic trading, and financial technologies, on investment banking in the period from 2019 to 2024. Within the framework of the paper, an analysis of the approaches of leading investment banking centre countries to the introduction of innovations was conducted. The main results showed that the implementation of blockchain allowed reducing the cost of processing financial transactions by up to 30% and lowered their execution time to several seconds, which substantially increased the efficiency of processes in international transfers. Artificial intelligence helped reduce costs by 15% by improving data analysis processes, and algorithmic trading covered 70% of the volume of transactions in the market, increased liquidity and decreased the cost of executing transactions by 30%. The introduction of financial technologies, which grew by 25% in 2023, made financial services available to a wide range of users, including through mobile platforms and innovative solutions such as crowdfunding. This study also determined that companies with a high level of innovation had 30% more successful projects. In addition, the analysis showed that the integration of environmental, social and governance aspects led to an improvement in the financial performance of institutions, in particular, an increase in market capitalisation by 4-6%. The results of the study highlighted the importance of investing in the latest technologies to ensure the sustainability of investment banking in the face of global threats to sustainable development, such as economic instability, climate challenges, and digital inequality. The practical importance of the study lies in the fact that it provided recommendations for financial institutions on the introduction of technological innovations that contributed to improving their financial stability.