Just over 10 years ago, French bank BNP Paribas froze U.S. mortgage-related funds. Defaults on subprime mortgage loans mounted. The market panicked. There was a run on British bank Northern Rock. Over the next year, many banks fell. Investment bank Bear Stearns collapsed. Lehman Brothers toppled. Many other financial firms including AIG, Fannie Mae, and Freddie Mac needed bail outs. The Great Recession of 2007 to 2009 was under way.
How the Great Recession Changed Banking
And how technology is changing it now.
October 31, 2017
Summary.
It has been a decade since the Great Recession started. While it may feel as though the financial system hasn’t changed much since the downturn, it has. Most banks are smaller and more risk-averse than they were 10 years ago. The crisis also created a deep divide between banks that quickly remodeled their business and those that failed to move rapidly. Now a new force is affecting the industry: technology. Investment banks will automate manual tasks and processes to increase efficiency, move services to the cloud, and improve the quality of data analysis, in part by using artificial intelligence to better anticipate evolving customer needs. The resulting technological reinvention of investment banks will reshape the industry once again.