What Skills Do You Need For An Investment Banking Job?

Investment bankers are educated and experienced professionals who facilitate significant and complex financial transactions for businesses and governments. This profession offers high salaries and great perks, making careers in the field very attractive to recent college graduates and experienced finance professionals. Not surprisingly, the investment banking job market is among the most competitive.

Here are the qualities many investment banks look for in job candidates.

Key Takeaways

• New opportunities come from all directions, so investment bankers need to be creative and nimble thinkers.
• Selling is a big part of the job and applicants must be skilled at creating and presenting proposals and closing deals.
• Leadership potential is key, as even junior employees will own their own projects.

Intellectual Abilities

“How many jellybeans can fit in the Empire State Building?” is an odd job interview question, but the answer can convey something about the candidate’s thinking. The interviewer is trying to assess the candidate’s intellectual ability by asking a question out of left field, and there’s a reason for that.

Imagine being an investment banker and meeting a business tycoon. The tycoon starts musing about the potential for selling tractors in India, a country he knows little about. A good investment banker should be prepared to quickly assess the industry, the market, and the business idea, beginning with an estimate of the number of farmers and the amount of farmland in India and an educated guess at the potential market for tractors there.

New business ideas, deals, products, and opportunities come from all directions in investment banking. Candidates should be adept at identifying and exploring them. That takes a nimble intellect.

Analytical Skills

Investment bankers are often required to present detailed analyses of business ventures and investment plans to highly demanding clients. Analytical expertise, in addition to good number crunching and quantitative abilities, are required to present the business plans and the risk-return tradeoffs, and to back it up with facts and figures when challenged.

Important

Financial modeling, corporate finance principles, accounting and reporting, economic forecasting and market analysis, and risk management are must-have skills for investment bankers.

Communication Skills

The primary job skill of investment banking is persuading and convincing. Selling an idea takes excellent all-around communication and presentation skills. These include making advanced spreadsheets, documents, and slideshows.

Management and Leadership Abilities

Investment bankers often start as junior analysts, and candidates are assessed on their long-term potential. In the short- to mid-term, they are assigned complete ownership of a business opportunity, eventually followed by the assignment of an entire region or business segment. Down the line, they may become vice presidents and above, leading business divisions.

Even in an entry-level position, candidates are required to take responsibility, build teams, seek assistance from across multiple internal divisions, and build partnerships with external vendors and partners.

Management and leadership potential is an integral part of the investment banking job.

Entrepreneurial Skills

Investment banking is a key player in merger and acquisition deals, corporate restructuring plans, initial public offerings, and new business capitalization.

The ability to identify business opportunities in new and unusual areas is a requirement of the job. It may involve funding a team of enthusiasts to help build a business from scratch, or spotting growth potential in an existing business.

Networking Skills

Investment bankers need the ability to make connections with people from many industries and various cultures. Candidates should demonstrate the ability to deal with unfamiliar situations and maintain healthy client relationships.

Other Requirements

Investment banks say they look for loyalty, authority, diplomacy, creativity, and high ethical standards. Common interview questions include, “Give me an example of an occasion when you demonstrated loyalty [or authority, diplomacy, or creativity]?” Another common opener is: “Give me an example of when you faced an ethical dilemma, and how did you solve it?”

Fluency in another language is a bonus, and almost any other modern language could come in handy.

What Skills Are Most Important in Investment Banking?

Investment bankers need a thorough understanding of financial markets, corporate finance, communication, and analytical skills.

Do Investment Bankers Need People Skills?

People skills are essential for investment bankers because they interact with people daily and manage and lead others.

What Skills Do You Need for JP Morgan?

JP Morgan looks for highly motivated “leaders with highly developed critical thinking, problem solving, and analytical skills,” as well as communication skills and solid financial analysis acumen.

The Bottom Line

Investment banking can be a lucrative career, but it requires a wide range of skill sets, thought diversity, analytical skills, financial knowledge, and experience to be successful.