What do you mean by Investment Banking? How to become an Investment Banker?

Investment bankers, know thyself. It is a title that is hard won. Have you ever wondered how investment banks such as Morgan Stanley, JPMorgan Chase, Goldman Sachs, and Bank of America Merrill Lynch operates? Thanks to our multi-talented bankers.

The investment banking industry remains as one of those industries that will always stay in demand. Although it is a growing industry, they are always under pressure since they’re in constant hurry for profits. The market is in competition these days and just as the banks operate at hubs of the global market place, in the same manner investment bankers play a vital role in helping structure financial deals in facilitating business operation to keep the economy moving forward.

It is also predicted that as the global market increases so will the level of investment increase. Thus said, the baby boomers will be on their journey towards retirement. This is when the demand for investment bankers will rise exponentially. Candidates coming from backgrounds in finance, accounting and economics along with industry certifications such as investment banking certification or advanced educational qualifications have a stronger prospect in securing these esteemed jobs.

What is investment banking?

One can call investment banking as a division of the banking operation whose sole purpose is to serve individuals or companies raise capital or it acts as an intermediary performing various acts that involves financial transactions, or acting like an intermediary between the security issuer and the investing public. Investment bankers either buy or sell shares at prices that is fixed by their experts, make a resale out of it, or sell the shares on behalf of the issuer and take commission as decided. They further support services like derivatives trading, market making, fixed income instruments, commodities, and equity securities.

Apart from raising capitals they also contribute towards financial consultancy. Most investment banks end up providing assistance to their clients in regards to managing their financial assets in fields such as debt funds, real estate, and equity funds.

Key Takeaways:

  • Investment bankers generally have external clients but they also trade on their own accounts. One needs to be careful since a conflict of interest might take place.
  • Size is always an asset for bankers, wherever there are more connections it is feasible to say that it will be a profit.
  • Their expertise lies in areas such as complex financial transactions i.e. underwriting, facilitating mergers, corporate reorganizations, or maybe act as financial broker.

Landing a successful career in investment banking requires high level of education and exquisite skills. Currently, employers expect candidates to have minimum a bachelor’s degree in finance, economics, accounts or any other related field. Apart from these, individuals with certifications (investment banking certification) from credible resources might have a chance entering the banking industry. Addition to this, it is an added benefit if you have sharp analytical skills along with mathematical abilities.

So, are you all set to launch an exciting career in the investment banking sector?