Top 7 Disruptors of 2021 in Investment Banking (so far)

Top 7 Disruptors of 2021 in Investment Banking (so far)

Disruptions and disruptors come in all shapes and forms. Briefly speaking, you can never predict who, or what will eventually become one. This could be a person, an event, or even social media community. And as this year has been really ‘fruitful’, in this piece, following Disruption Banking, we’ll try to choose the 7 biggest disruptors of 2021.

1. Covid-19 and the vaccines

A whole year has passed. It’s already looking like we’re recovering from the fuss made by the pandemic. And while it will be a rather long process, we can expect that the recovery will eventually come. Some experts say that it will be as soon as 2022, but we are still yet to find out.

Andy Haldane, the Bank of England’s Chief Economist mentioned recently, that should the families scrape out some of their savings and basically go and spend it, maybe the economy will heal sooner. Currently, one of the biggest threats (and it’s really right around the corner), is inflation. But there is still another element that causes disruptions – the vaccine rollout.

Every dose and every day bring us closer to normality, but what we will still have to deal with, is the crisis. Maybe after we overcome it, we’ll be able to predict things like we used to. But for now, the pandemic is still the biggest disruptor out there.

2. ESGs and SDGs

Maybe let’s reveal what’s behind those abbreviations, should you not know that. ESG stands for Environmental, Social, and Corporate Governance, and it’s a set of directions towards a new, sustainable future, not only for the world of finance. SDGs are Sustainable Development Goals, and their name rather speaks for itself.

In January, the newly appointed President Biden has renewed the country’s focus on the agenda and has committed to the Paris Agreement again. Larry Fink, BlackRock’s CEO has issued another annual letter, where he stressed the need of gathering colossal sums in order to reach net-zero by 2050. The sum he mentioned is as much as $50 trillion to ensure the world goes net-zero. Banks are still committing to this idea, and we’re still to see if Fink’s predictions will be accurate.

3. Wallstreetbets

This scandal highlights the role that ‘influencers’ have in modern society. It took only a few people who found a loophole in the system, and the community of Reddit was able to make a big disruption on the market. Some hedge funds lost $19 billion on the stocks of GameStop. It clearly showed the blind spot in the investment strategies (not all of them, of course). The rise of retail investment started back in 2020, but it still shook the market in the first months of 2021. That is, why it was placed third on this list.

4. Bitcoin

Whatever he touches, turns into gold… some say that about Elon Musk, whose Tesla invested $1.5 billion into bitcoin in February. And well, the crypto charts went flying. Citi described it as bitcoin shifting from a retail-focused endeavor to a venture attractive for investors. Well, it’s hard to disagree with them in this case.

Even banks got interested in offering Bitcoin services or trading it themselves. Coinbase’s Brian Armstrong and his team had big resources invested into bitcoin, and one can only imagine their profits. Some say, that Armstrong had a $1 million a day salary.

5. Brexit 

London looks like the biggest loser suffering from Brexit. The city lost to Amsterdam, which became the biggest stock trading ground in Europe. Then over 300 firms relocated from the capital of England, 115 of them moved to Dublin. All that, because they wanted to still have the headquarters in the European Union.

Banks started shifting their balance sheet items to Germany, and the valued amount of that is supposed to hit €675 billion by the end of the year. This is starting to really look like a disaster, and the big disruption not only for the UK’s market but the global one as well.

To find out, what disruptors managed to get on positions number 6 and 7, read a comprehensive Andy Samu piece on Disruption Banking:

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