The Future of Investment Banking

Many students go through the mill to get their MBA degrees. An MBA graduate undergoes a rigorous training schedule in strategic thinking, creative problem solving, leadership skills, communication skills, analytical thinking and the ability to work in collaboration. The students are expected to be more than just problem solvers and have exceptional interpersonal skills.

An MBA can enhance your marketability as a professional, enhance job opportunities, help you grow in the profession and build business leadership skills as well as professional networks. Investment banking focuses on providing valuable financial services to individuals and organizations to invest, helping them create wealth and grow their money through key investment strategies and risk management.

Investment banking is currently at a crossroads, stabilising and consolidating its market position. The drop is primarily due to a global economic slowdown caused by the COVID-19 epidemic and the actions taken to combat it.

Despite this downturn caused by the pandemic, many investment banking companies like Goldman Sachs, Deloitte, Morgan Stanley and Citigroup, to name a few, are on the lookout for skilled MBA graduates to make the road smoother.

Neeti Sharma, Senior Vice President, TeamLease Services, recently stated that technology is creating new opportunities and making way for a large number of jobs. The convergence of big data and artificial intelligence, she adds, has emerged as the single most important development that is shaping the future of how firms drive business value from their data and analytics capabilities.

The challenge for the investment banking industry revolves around higher capital charges, market electrification and digitalization; a high-cost base; inflexible and layered technology with the increased complexity of regulation and reporting.

To handle all these complexities, banks employ investment bankers who help corporations, governments, and other groups plan and manage large projects, saving their clients’ time and money by identifying risks associated with the project before implementing it and moving forward.

Investment bankers can provide recommendations based on the current status of the economy, therefore businesses and institutions turn to them for assistance on how to effectively plan their development.

Investment banks help with large, complicated financial transactions in general. If the investment bank’s customer is considering an acquisition, merger, or sale, they provide data and advise on how much a firm is worth and how to organise a deal. They may also prepare the necessary paperwork for the company to go public through the Securities and Exchange Commission (SEC) in order to raise capital for client groups.

Investment banking as a career will only grow, despite the challenges and odds. A spokesperson at the Tuck School of Business’s Career Development office says, “We have seen very consistent hiring numbers with no decrease in demand for MBAs.” This outlook on the growth of investment banking is positive news for candidates armed with MBAs and looking forward to a career in banking.

Goldman’s Alex Figueroa, an MBA recruiter and investment manager, says that the banks’ recruitment strategy is to find people who are smart and teach them what they need to know on the job. “They’ll use their own initiative and the firm’s resources to launch their career,” he says.

The majority of investment banking giants have devised specialised hiring processes for more senior candidates. Some major investment banks provide internship hiring and training programmes for MBA graduates. Citigroup has a full-time associate position available for MBAs and PhDs. Every year, it hires a large number of business school graduates for development programmes.

The same practice is replicated in Europe. Deutsche Bank in Germany offers associate internships for MBA candidates with sufficient job experience that last eight to ten weeks. UBS, Switzerland’s biggest bank, runs associate internships and full-time tracks for MBAs and also has an emerging markets programme in Switzerland that recruits business graduates.

Big investment banks continue to command huge numbers of applicants for their development schemes, as there is tremendous growth in areas such as risk management, which requires specialised skill sets and experience to fulfil the needs of clients from various parts of the world.

There are numerous opportunities to succeed in an environment that is constantly changing, and it’s a challenge that many young and enterprising people want to take on.

Further reading