It was a good year for the global securities industry. Origination volumes were up and, although trading had a tough second quarter, overall year-end results were excellent for many players. Yet the longer-term health of the industry is less clear. A lot of key businesses are evolving in fundamental ways, and banking executives will have to rethink their traditional assumptions about how to operate successfully on a global scale.

Shaping strategy

Successful banks will adopt fresh strategies for changing times. Big companies will continue to seek strategic advice, but banks will also need to serve the middle market. In addition, private and public capital market boundaries are blurring, which makes financial sponsors an increasingly important market segment.

Advising mega-institutions

Companies are getting bigger, and so are M&A deals. Since 1995, the 100 largest global companies' share of total market capitalization has grown to 41 percent, from 35 percent. The average top ten M&A deal has grown as well—to $17 billion, from $6 billion, in the past two years alone.

Unfortunately, bigger companies and bigger deals don't guarantee bigger M&A fees to advisers. Over the past ten quarters, the top ten deals accounted for 30 percent of volume, on average, but...