Top Tools for Investment Bankers in 2024

Investment banking is competitive.

Any edge that a banker can gain over rivals, however small, could amount to millions of dollars.

In their never-ending efforts to gain this edge, the top tier investment banks often develop tools in-house, closely guarding the technology that they’ve invested in.

However, that doesn’t mean that there aren’t a plethora of outstanding tools that most investment banks can avail of on the open market.

We, at DealRoom, help dozens of investment banks to manage their M&A activities and we outlined some the tools below:

Top software tools to use in investment banking

Sometimes big IB companies need very specific and niche tools to support their processes and this is where software development for banking industry can help them.

In the other cases lots of good software products are utilised. So let's start with the most important tools for banking process.

Research Tools

There has never been a better selection of investment research tools for investment bankers to choose from.

At the high end, are the staples:

• Bloomberg Terminal,
• S&P Capital IQ,
• PitchBook.

However, there are also a range of lesser known tools that can also add value for companies looking for something a little more affordable.

In this latter category, tools such as Factset, coming in at $12,000, and Refinitiv Eikon (previously Thomson Reuters) can be stripped down to as little as $5,000, depending on what modules the user chooses.

And although SourceScrub at $20,000 is another rather costly option, it is excellent for providing data on non-listed companies.

The market continues to grow, however. To the above, we could also suggest Acuris and MergerMarket (both operating under the same parent company), the AI-enabled AlphaSense, Sentieo, YCharts, and EMIS, which places a focus on emerging markets.

The best way to understand which research tools work for your investment bank? Research, obviously.

Virtual Data Rooms

Few segments of investment banking are growing as fast as the one that looks after its data: the virtual data room is growing exponentially, as investment bankers everywhere realize that they cannot be without secure and organized data storage if their transactions are to run smoothly.

Here, there are a dizzying range of names to choose from.

As one might expect, a number of smaller providers simply rent space online from AWS and others, before branding and marketing under different names. Well-known names in the space include Firmex, Merrill, and Intralinks.

Despite the competition, virtual data rooms are still characterized by a lack of transparency in pricing.

Most users aren’t sure specifically what they’re paying for. Capitalizing on this, VDR FirmRoom has developed a transparent pricing structure that allowed it to quickly capture huge clients such as JP Morgan, KPMG, and others.

Project Management Tools

Mergers and acquisitions are, by definition, large corporate projects. It thus makes sense for investment bankers to avail of the growing number of project management tools at their disposal.

Increasingly, like every other industry, this means using Slack and Trello, but there are plenty of others in this category that warrant investment bankers’ attention.

Foremost among these is DealRoom - which merges a virtual data room with project management tools, to facilitate deals.

Users can see how much of due diligence has been completed, what remains outstanding and who is responsible for each task. Its biggest strength is that, unlike most project management tools, it was designed specifically for M&A.

There are a range of others, however. Backstop Solutions, for example, is a cloud-based productivity suite aimed at investment professionals that places an emphasis on efficiency - a sort of ‘time is money’ pitch.

Likewise, Q4 Desktop claims to streamline investment bankers’ processes and has an impressive client list to help back up its claims.

Collaboration Tools

Realizing that mergers and acquisitions is at its core, a process of deep collaboration between the participants, most of the tools mentioned until this point have at least some collaboration component.

For example, all virtual deal rooms now double up to a certain extent as due diligence collaboration tools.

Another advance in the collaboration movement was seen this year when Microsoft made Excel live on the cloud (taking their lead from Google Sheets). They have also improved MS Teams for internal communication which widely used in investment banking industry.

Now, the investment banker’s most commonly used tool includes an element of collaboration that was missing, allowing teams of bankers to work on the same sheet at the same time.

Indeed, the development team behind Yammer may not have been mimicking Google Sheets, but Yammer - a company that Microsoft acquired almost a decade.

Billed initially as a social network for enterprises, Yammer has now developed into an excellent collaboration tool, bringing a new element of collaboration to the M&A process.

Conclusion

M&A is a process with so many moving parts that it’s now essential for investment bankers to use all of the tools at their disposal.

Although traditional tools like Excel are still the mainstays of this industry, a number of others have come into play over the past decade. It would be foolhardy not to consider at least some of these tools.

Anything that provides an edge in the M&A process warrants the attention of investment bankers.