The most successful investment banks have one thing in common: they recognize the power of relationship capital and use it to drive business. Understanding the extent of your organization’s connectivity to other people, firms, and information in the marketplace is essential to long-term growth. 

After a year that brought seismic changes to the way firms interact with their clients, investment banks are starting to evolve their engagement strategies. By incorporating investment banking best practices for relationship management, firms can improve internal operational efficiency, gain valuable insights into their existing and potential client base, and uncover new business development opportunities.

The obstacles to building relationship capital

Our Managing Director Jill Harrison recently appeared on Salesforce’s Inside the Modern Investment Bank series to explore significant industry trends. During the interview, she addressed challenges investment banks face when trying to capitalize on their relationship capital. Here are some key takeaways from their conversation. 

We have access to more data than ever before. What do we do with it? 

There’s no shortage of data. In order to make the best use of it, you need to bring all your information together in a way that can help your business. The first step is understanding the different types of data you have:

• First-party data: Data collected directly by the firm or individuals within the firm about the market, customers, or prospects. This can be behavioral data, such as website visits or social media engagement, or direct intel from 1:1 meetings.
• Second-party data: When one company purchases first-party data from another company. Essentially, second-party data helps an investment bank more fully map its network to see the bigger picture and identify new or emerging nodes of influence or opportunity — as well as how actively their bankers are engaged with these network influencers.
• Third-party data: This type of data comes from aggregated sources, such as news, analysts, websites, ticker values, social media reactions, or media mentions. Third-party data firms scour the web for information and sell that data to customers.

Firms are starting to see the value of their first-party quantitative data, whether they’re using engagement metrics from email, social media, and events; personnel changes and IPO announcements within their industry and sub-verticals; or media mentions and survey results. That data only gets richer as relationships mature over time, offering insights that help you understand the direct revenue impact of these relationships and inform market share. 

It’s vital that organizations develop a clear practice and core competency about tracking this data so they can know what’s happening in the market in real time and where they should focus their attention to find new deals, new relationships, and source new lines of business. Incorporating second-party data helps investment banks see the bigger picture and identify emerging nodes of influence or opportunity, while third-party market data enriches the collective intelligence of the firm to make the best use of this mountain of insights. 

Interactions with customers are valuable places to gain new information. Investment banking best practices have firms using the transaction to understand where they can go next and how they can develop new lines of business. It’s not just about understanding who they know and who is in their relationship network, but also learning what these connections need and anticipating new financial products like Wealth and Asset Management to extend into other lines of business. 

How do we leverage our network to generate revenue?

One of the realities of having so much data is the need to simplify the experience and create context around the giant stockpile so bankers can actually use it. How do you look at a relationship with an institution or portfolio — in the case of a financial sponsor like a private equity firm — and find out who you know within that entire network? 

Salesforce has done a lot of thinking about how to deliver intelligence and make it actionable. That’s the greatest value for bankers who are working through many deals. 

• Tableau and Tableau CRM give you the power to take that data and synthesize it quickly. The latest Financial Services Cloud release includes Tableau CRM relationships insights, which helps bankers tap into the stream of market data. Understand recent board placements, executive personnel changes, and other major developments that can potentially lead to future opportunities. 
• Einstein Activity Capture and Contact Capture lower the barrier to entry for bankers to capitalize on intelligence about their relationships by automating data entry for contacts and meeting notes. 
• Salesforce’s relationships with market data providers like S&P Capital IQ and FactSet further assist with relationship mining through third-party insights. 

Having a real-time information stream is a key differentiator for going into these new pursuits, allowing bankers to become the eyes and ears of a corporation on the ground. Where might they experience a threat? Where should they take action in the market? It’s easier to answer these questions when you have a full picture of the landscape and know how to navigate it. 

How can we evolve marketing efforts to create deeper relationships?

Investment banks have been instrumental in driving deal momentum around marketing technology and the value of marketing data. But over the last year, investment banking firms realized they hadn’t been investing in themselves to take advantage of those same tools.

The shift to digital marketing isn’t going away: Increased social sharing and networking on LinkedIn, the rise of Zoom, and podcasts and thought leadership video series to connect with clients. Investment banks that understand engagement data around their key relationships are bridging the gap between being a traditional MNA advisory shop and being a research shop with analyst associates doing extensive research from home. If you really understand who is engaged, you understand who are your highest value network nodes in the market, which informs client engagement and invitations to industry events in the future.

Firms are thinking more deeply about referral channels. They’re tapping into their alumni community to source more deals. They’re sharing the impact of their transactions as top-of-funnel marketing. Forward-thinking banks are developing and investing in teams that do contextual analysis and predictive analysis — the kinds of things you would expect from more corporate or commercial banks. They’re analyzing the data science behind how they can staff a deal so it closes faster and has a bigger outcome.

You can learn more about investment banking best practices for relationship management by downloading our new ebook: The 5 Trends Shaping the Future of Investment Banking. Find out how Silverline can help you take advantage of these trends and leverage capability and talent to supercharge what your company is doing. Get the ebook.