Investment research in banks: why processes are often too complex

A typical morning in the research team. New quarterly results have been released. An analyst updates a recommendation. What may sound like a clearly structured, standardized process often turns out in practice to be a complex web of tools, files, and workarounds.

Assessing investment risks and opportunities is a core component of banks’ investment activities. In addition to macroeconomic developments, the in-depth analysis of individual securities and their issuers plays a crucial role.

This responsibility typically lies with specialized research teams. Analysts bring deep industry expertise and often many years of experience to evaluate a company’s future performance and, consequently, the outlook for its equities or bonds.

How research content is created

To form a well-founded view, analysts rely on a wide range of information sources, including company reports, market data, external research publications, as well as internal analyses and models. The outcome is typically a research opinion published as a document containing a clear recommendation – such as Buy, Hold, or Sell – often complemented by current market data.

Depending on the institution, these publications go through multiple review and approval stages to ensure quality, consistency, and compliance with regulatory requirements. In the case of significant events or changes in recommendations, additional documentation is often required.

Research as the foundation for advisory and investment recommendations

Research publications do not serve a purely informational purpose. In many banks, they form the foundation for a wide range of downstream applications within the investment process. Research recommendations are typically used to compile recommendation lists, which in turn serve as the basis for investment proposals developed by advisors for specific client segments.

To ensure consistency and a coherent client experience, these lists and documents follow institution-specific standards. Content, data, and structure are based on predefined building blocks and templates.

Historically evolved system landscapes

The systems used by research teams have rarely been designed as a single, integrated solution. Instead, many banks have developed a heterogeneous mix of tools and manual processes over time.

Typical components include:

• Excel files and complex macros
• CSV files for data transfer
• Manually created emails for updates
• Storage of publications across file systems

What originally started as pragmatic solutions has, over time, led to a range of challenges.

Common challenges in day-to-day research operations

Such a fragmented system landscape can give rise to several issues:

Technical dependencies
Software updates or format incompatibilities can disrupt established workflows. Breaks between different tools further increase the risk of errors.

Decentralized management of templates and data
When templates, text modules, and data sources are maintained across multiple locations, operational effort increases—and so does the risk of inconsistencies.

Inconsistent client-facing presentation
Different document versions or manual adjustments can result in an inconsistent appearance of research publications.

Limited transparency
A particularly critical issue is the lack of complete documentation of changes, approvals, and review processes. However, such traceability is essential for auditability and regulatory compliance.

The need for a new approach to investment research

Against this backdrop, many banks are facing a fundamental question:

How can historically grown research processes be evolved into more centralized, integrated approaches within a structured environment?

The goal is to move away from managing research content, data, and publications across disparate tools and files, and instead consolidate them into a unified framework.

This enables easier integration of upstream data, consistent management of recommendations, and efficient distribution of updates across relevant channels.

Such an approach also opens up new opportunities to better connect research with other areas of the investment value chain – such as the creation of recommendation lists, model portfolios, or investment ideas – and their use in advisory processes or digital client platforms.

At the same time, research outputs can be efficiently transformed into client-ready formats, for example through the automated generation of factsheets or investment publications. Combined with clearly defined distribution mechanisms, these materials can be deployed more effectively in advisory contexts – supporting client conversations or enabling the targeted delivery of relevant content to specific client segments.

Furthermore, centralized research platforms enable standardized workflows for review and approval processes, as well as an audit-compliant history of changes and decisions. This ensures full traceability and supports compliance with regulatory requirements for transparency and governance.