INNOVATION IN INVESTMENT BANKING AS A RESPONSE TO GLOBAL CHALLENGES

Abstract

Abstract. In the modern world, investment banking plays a crucial role in the global economy by facilitating capital raising for companies, supporting economic growth, and ensuring financial stability. The article analyzes numerous risks for investment banks associated with globalization, economic crises, technological progress and strengthening of regulatory requirements. In response to these challenges, innovation has become a key factor enabling banks to remain competitive. The adoption of advanced technologies such as blockchain, artificial intelligence, and big data is significantly transforming business practices and opening new avenues for growth and development. Innovative financial instruments, new risk management models, and operational process optimization are integral parts of modern investment banking. The purpose of this article is to investigate and analyze the role of innovation in investment banks' responses to global challenges. It was determined that innovation in the banking sector profoundly impacts the efficiency and resilience of financial institutions. Implementing cutting-edge technologies like blockchain, artificial intelligence, and machine learning ensures high levels of transparency and security in financial operations, automates analytical processes, and enhances decision-making accuracy. Furthermore, innovative approaches to risk management help banks effectively assess and control risks while developing hedging strategies. Innovations in creating new financial instruments, such as cryptocurrencies and smart contracts, offer new opportunities for portfolio diversification and cost reduction. Investment banks also actively utilize crowdfunding and robotic process automation (RPA) to raise capital and improve operational efficiency. Social responsibility and sustainable development were identified as important areas of focus for investment banks, contributing to reducing environmental impact and enhancing community well-being. It was proved that the success of innovation in the banking sector depends on banks' ability to effectively balance the advantages and drawbacks of each technology, invest in human capital development, and ensure compliance with regulatory requirements.