A Complete Guide to Investment Banking

Have you pictured yourself in a suit, meeting heads of organisations, and talking finances in the millions and billions? Were you glued to the edge of your seat while watching the Wolf of Wall Street? Have you found yourself wondering how investment bankers are different from regular ones? If your answers to these questions are “Yes”, then this article is for you.

Here’s all you need to know about Investment Banking

What is Investment Banking?

A fascinating field in the world of finance, an investment bank is a private company that provides financial services involving investments, raising capital, dealing with mergers and acquisitions, trading equities, and so on. The customer of an investment bank can be an individual, an organisation or even the government. It is different from regular banking for it does not involve savings and deposits. JP Morgan Chase, Barclays, Rothschild, Goldman Sachs, and Deutsche Bank are some of the renowned investment bankers in the world.

Your role as an investment banker

Depending on the level you are at, you will be at the centre of making important financial decisions for your customer. You will enable large and complex financial transactions and also ensure the organisation you are representing follows governmental regulations to the T. This includes everything from issuing securities to mergers to investing in the stock market. It becomes your job to identify the risks and find the optimum investment opportunities that multiply your customer’s investment while keeping risk minimal.

Typically, in an investment banking firm, a clear hierarchy exists. You start at the junior analyst level, learning the fundamentals of number crunching and reading market trends, then senior analyst, associate, and then to executive cadre. Whichever level you are at, you learn to keep up with the pace, think on your feet and become a pro at financial modelling.

Why investment banking?

  • You love the complex and volatile world of finances and investments. It challenges you and keeps you on your toes.
  • You are the kind who loves to keep learning, and constantly updating yourself on the market trends.
  • You love number crunching and analysing.
  • You play jump rope with risks.
  • You like dabbling in one of the highest-paid jobs, across the world.
  • You like the pace, the hours, and the suits.

What to study to become an investment banker

Irrespective of your choice of discipline, your love for maths and statistics is non-negotiable. An undergraduate degree in maths, statistics, economics, accounting, or finance is all accepted for an entry-level position. Your work depends on the aptitude you develop. There have been instances where even liberal arts or physics major graduates have gotten into investment banking.

In today’s digital age, AI or software development is integral to investment banking. An interdisciplinary degree in science and tech will allow you to carve a niche for yourself in the industry. You can design software, use AI for risk assessment and shortlisting investment portfolios and generally reduce the involvement of human biases and errors.

If you want to enter the domain at a higher level, organisations look for postgraduate degrees such as an MBA or a CFA degree. While the MBA is a more popular degree, CFA stands for Chartered Financial Analyst. It is a more rigorous program that will give you the knowledge and skills to thrive in the highly competitive investing industry.

If not these two, Master’s level specialisations in Financial Mathematics, Statistics or even Law (focussing on the finance aspect) can also help you thrive in the industry.

A reputed university or a top-notch B-school with above-average GPAs is what recruiters typically look for, across academic disciplines. Having a numerical degree (anything that involves numbers: physics, engineering, IT, etc.) will give you a bit of an edge.

Becoming an investment banker

As with most professions, investment banking needs a set of skills that cannot be acquired only from a college degree. Number crunching, market study, and data analysis are skills you start honing, additionally, second the scope of your academic degree.

Sign up for MOOCs, nano degrees, and other certifications to your advantage. Any additional qualification will boost your resume. Another key qualification is practical experience. Do not pass on an opportunity to do an internship at any of the investment banking firms. Even if you are getting coffee, you will learn the pace of the industry. An internship is also a great place to start making contacts. Be professional and start building up your networks. At the end of the day, the people you meet will take you a long way.

Also Read: MBA in Banking and Finance: Guide for Indian Students in 2022

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Global Employability


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