Guide to Investment Banking: My journey and insights 

Investment banking is an exciting, fast-paced, and high-stakes career that demands both strategic thinking and problem-solving skills. With over two decades of experience in this sector, including roles at some of the world’s leading firms such as Bank of America and Citibank, I have gained valuable insights into the industry. Through this guide, I aim to share my experiences, practical advice, and key learnings for anyone aspiring to build a career in investment banking. 

What is Investment Banking? 

Investment banks are financial institutions that specialize in providing services related to capital markets and financial transactions. These services include mergers and acquisitions (M&A), initial public offerings (IPOs), and corporate restructuring. Unlike commercial banks, which focus on everyday banking operations like loans and deposits, investment banks act as intermediaries, offering advisory services and financial instruments to large corporations, governments, and institutional clients. 

In addition, the following are the largest investment banks in the world: 

• J.P. Morgan Chase 

• Goldman Sachs 

• Morgan Stanley 

• Barclays 

• Bank of America 

• Merrill Lynch 

Investment banks play a critical role in connecting investors with market opportunities while ensuring the security and efficiency of large-scale financial transactions. 

How I got into Investment Banking? 

Surprisingly, the road to investment banking was not through finance. I first earned my degree in engineering and then changed my job to a bank’s IT department. In my first role, I was engaged in a banking technology project where I was responsible for dealing with stakeholders and learning about financial systems. Furthermore, I was involved in the business side which led me to take a real liking to investment banking. 

This experience taught me an essential lesson: anyone from any background can enter investment banking if they have the right skill set, passion, and willingness to learn. 

Also read: A guide to becoming an investment banker

Key roles in Investment Banking 

Within the investment banking career, multiple roles can be followed. Some of the key roles include: 

1. Mergers & Acquisitions (M&A) Advisor 

• Guides companies in merging or acquiring other businesses. 

• Examines company finances to determine the company’s value. 

• Conducted negotiations and ensured that transactions were executed smoothly. 

2. Equity Research Analyst 

• Studies the functions and performance of stocks and industries in depth. 

• Gives suggestions to investors on purchasing, selling, or holding shares. 

3. Financial Modeling & Valuation Analyst 

• Formulates financial models to anticipate company performance effectively. 

• Provides assistance in creating reports for investment decisions. 

4. Risk Management & Compliance 

• One risk management and compliance task is ensuring that investment banks comply with regulatory frameworks. 

• Fund transfers are carried out using blockchain – a technology capable of encrypting and protecting clients’ information. 

5. Investment Banking Technology & Operations 

• Concentrates its attention on developing a secure and efficient financial system. 

• Investigate international flows and ensure proper routing of orders during the day. 

All these positions need different abilities, but they are all held in high-pressure environments where instant decision-making is crucial. 

How to become an Investment Banker? 

Investment banking is a multifaceted industry that may offer different career paths based on an individual’s background and area of specialization. 

1. Educational background 

Despite the heavy reliance on economics, business, and finance as qualifications, some of the most sought-after professionals also have a strong grounding in the hard sciences such as Engineering, Physics, Chemistry, and IT areas like computer science. 

• BBA/BCom graduates: In general stay close to the spectrum of finance and accounting and engage with top best practices in management. 

• CA/MBA Finance: Focuses on financial analysis and provides exposure to the capital markets and investment arenas. 

• Engineering & IT professionals: Can transition into banking technology and risk management. 

2. Key certifications 

One of the ways to excel in investment banking is to acquire certificates that relate to the sector. Some of the reputable certifications that are available are: 

• CFA (Chartered Financial Analyst): Designed for the analysis and valuation of investment. 

• FRM (Financial Risk Manager): Perfect for those in risk management. 

• CFA Level 1 & 2: Serves as an introduction and simplifies the investment banking essentials. 

• CA or CPA (Certified Public Accountant): Good for accounting and financial management. 

3. Essential skills 

Investment banking requires more than just math. Success in the industry requires a combination of various technical and interpersonal skills. 

Technical skills: 

• Financial models 

• Valuation methods 

• Excel and Data Analytics 

• Financial statements interconnection and relevance 

Soft skills: 

• Effective communication and negotiation 

• Critical thinking and problem-solving 

• Attention to detail 

• Time management and ability to work under pressure 

4. Gaining experience 

It’s necessary to start in investment banking by engaging in internships and acquiring entry-level positions. 

• Gain access to summer internships in investment banks. 

• Acquire practical experience by working for financial research consulting or technology firms. 

• Participate in personal projects such as financial modeling/stock analysis. 

It doesn’t matter if you are getting your first job in another field, such as business consulting, risk management, or technology; with the right experience, you can still easily switch to investment banking. 

Also read: Top investment banking interview questions and answers

Future trends in Investment Banking 

The world of investment banking is continuously growing. There are several trends that will make a shift in the future, most noteworthy of which are the following: 

• Artificial intelligence & automation: Financial modeling, trading algorithms, and risk management are being reshaped with the help of AI technology. 

• Sustainable & green investments: ESG (Environmental, Social, and Governance) investments are drawing increasing attention from different companies. 

• Rise of fintech & digital banking: Fintech is significantly disrupting the traditional banking model through new business models. 

• Cryptocurrency & blockchain: Digital assets connected with investment banks are being reviewed as well as decentralized finance (DeFi). 

As technology advances, professionals who combine finance with tech expertise will have a significant edge. 

Final advice for aspiring Investment Bankers 

For those who plan to choose a career in the investment banking sphere, here is my summary of the most important things you should remember: 

• Start early: Take classes in finance, meet finance professionals, and do internships. 

• Be persistent: It is a rigorous process, but at the same time, it is possible to break the barrier if you are in a continuous learning environment and are very devoted to the field. 

• Develop strong analytical skills: Through financial modeling, valuation, and data analysis one will become a supreme candidate. 

• Build a personal brand: That can be accomplished by involving yourself in the various discussions, writing about these kinds of topics on LinkedIn, and connecting with industry professionals. 

Investment banking is a challenging yet rewarding career that offers high earning potential, global opportunities, and exciting problem-solving tasks. If you have a passion for finance and a drive to succeed, this could be the perfect field for you!