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1. Today's Investment Bank Is a Thing of the Past

Investment banks have already undertaken a substantial revamp of their business activities and even withdrawn from certain areas, as did UBS, Switzerland's biggest bank. That won't be enough. To refinance their cost of capital, change has to reach much deeper, Roland Berger Strategy Consultants argue in a new study.

Return on equity of the ten biggest institutes averaged 16 percent in the years 2001 to 2007, before declining to 5 percent in the period 2008 to 2014. The return ratio currently is still lower than capital costs, making the need for action even more pressing.

2. Perish One-Time Costs

The horrendous one-time costs, which investment banks had to swallow in recent years, are affecting their results substantially, coming on top of those generated by the increase in regulation. Investment banks had to spend billions to cover for legal and judicial fees. The industry as a whole expended about 160 billion dollars on these purposes since the beginning of the financial crisis.

With this strain in mind, many banks will have to cut costs further, said Robert Buess, a partner and banking expert at Roland Berger. If they succeed and if the one-time costs were to disappear again, return on investment may reach 11 to 14 percent again, starting 2016.

3. Time's Up for Prima Donnas

Know-how and an agile mind are playing an important role in certain segments of investment banking, for instance to sell products with high margins in small quantities successfully. In other areas the onus lies on effects of scale, where standardized products with small margins are made in large quantities.

Many banks have reacted and changed their entire organisation and back-office procedures accordingly. That's not enough though - employees have to join in. Customer consultants, product experts and back-office staff have to work together more closely. In other words, the time of egocentric superstars of investment banking is definitely a thing of the past.

4. Big Data as Decisive Factor

Banks need to make further investments to improve their data systems. Big-data analysis is crucial for investment banks, more so than platforms.

Customer and risk information is more easily analysed with big-data systems and banking processes can be guided more accurately. Big-data analytics will become the decisive factor in investment banking.

5. Investment Banks Shouldn't Join the Digital World All Alone

Investments banks are facing new competitors with the entry of fintech companies into the market. These start ups aren't just competitors though, they can be partners in digital systems.

Investment banks need to understand this. Most institutes won't make it joining the digital world alone. «Partnerships and digital systems are ideal cooperation platforms for banks and fintech companies,» Robert Buess said.

 6. Investment Banks Need to Buy Talent from Outside of the Industry

The reputation of investment banks suffered badly in recent years, hurt by accusations and court cases. It has affected the reputation of the entire industry. Traditional ways  therefore need to be linked with innovative ideas.

One such would be to hire talents from outside of the industry, for instance acquiring knowledge about digital systems otherwise unavailable. It may mean that every manager receives a «digital native» as coach to enhance their perception about digital trends.

7. Change Makes New Leaders

The change in investment banking will only succeed if the leaders at these institutes live and breathe the new world. That's how they can create trust and responsibilities within new structures.

Quite a few of the old hands need to pass the torch. They didn't succeed in transforming their banks, adapting to the new world. It's a sign of our times that a number of chairmen and investment-banking bosses gave up or were fired over the past two years.

This process of purification is an important precondition for investment banking finding a way back to sustainable success.