Investment banking jobs offer high salaries and great perks, making careers in the field very attractive to both young college graduates as well as experienced finance professionals. The investment banking job market is very competitive. Investopedia explores the top skills investment banks look for in job candidates. (Related: Wanna Be A Bigwig? Try Investment Banking)
“How many jelly beans can fit in the Empire State building?” is an odd interview question, but the candidate’s response can convey everything about her intellectual abilities. The quoted answer doesn’t matter. Rather, the interviewer is more interested in assessing the candidate’s intellectual ability through the way she answers the question. Imagine being an investment banker and meeting a UK-based business tycoon. The tycoon begins pontificating about a possible farm tractor business in India, a country unfamiliar to him. An investment banker should be able to quickly break down the industry, market, and business idea starting with the estimated farming population of India, moving to making realistic assumptions about farm land, and ending with a percentage guess of farm land being tilled by tractors. The investment banker should be able to make guesstimates about the market size of the tractor business and the potential. New business ideas, deals, products and opportunities arise constantly in investment banking.
Candidates should be adept in identifying, building, seizing, and capitalizing on those using their intellectual abilities. (Related: Top Things To Know For An Investment Banking Interview)
Investment bankers are often required to present the detailed analysis of business ventures or investment plans to the highly demanding clients. Analytical expertise is needed with good number crunching and quantitative abilities to present the business plans with risk-return tradeoffs, and back it up with facts and figures, when challenged.
Presentation and Communication Skills
The primary job skill of investment banking is the ability to persuade and convince. The investment banker must be able to convince clients to buy in to her ideas. Part of convincing is having great all around communication and presentation skills. These include making good spreadsheets, documents and slideshows.
Management and Leadership Abilities
Investment bankers may start as junior analysts, but candidates are assessed on their long-term potential. In the short to mid term, they are assigned complete ownership of a particular business opportunity, gradually followed by assignment of an entire region or segment. Further down the line they become vice presidents and above, leading a large business division on their own. Even in an entry-level position, candidates are required to drive things on their own, build teams, seek assistance from across multiple internal divisions, and build partnerships with external vendors and partners. Management and leadership potential to drive business on their own is an integral part of investment banking job.
A large portion of investment banking includes M&A deals, corporate restructuring, taking companies public and funding new businesses. Identifying business opportunities in new and unusual areas is one of the foremost requirements of the job. It may involve helping a business build from scratch by funding a team of enthusiasts, or spotting expansion or mergers opportunities within existing businesses. Lack of entrepreneurial skills will limit such business identifying potential.
Extreme situations, differently cultured and often difficult clients, and unfamiliar settings are common for investment bankers. Candidates should demonstrate the ability to deal with unfamiliar situations and maintain healthy client relationships.
Some banks may prefer language familiarity depending upon the job location. For example, Deutsche Bank and CommerzBank may prefer candidates with German language abilities. Almost all investment banks say they look for the following traits: loyalty, authority, diplomacy, creativity, and high ethical standards. Common interview questions include, “Give me an example where you demonstrated loyalty [or authority, diplomacy, or creativity]?” Another common interview questions is, “What’s an example of when you faced an ethical dilemma and how did you solve it?”
The Bottom Line
Jobs that pay high salaries usually demands a high commitment, and this holds true for investment banking. Investment banks have a highly competitive selection process. To improve your chances of getting a job in investment banking, develop some of the skills described above. Also be sure you can demonstrate these skills to your interviewers. (Related: Financial Careers: Investment Banking Jobs)