1. Why Investment Banking?
Why Investment Banking is short for:
1, Why do you choose Investment Banking?
2, Why do you pursue Investment Banking?
3, Why do you want to work in the Investment Banking Industry?
Why Investment Banking refers to an interview question when you advance to the interview round. It seems to be the question right after “Walk me through your resume”.
It is a basic question, with the purpose for interviewers to know what prompts your passion to get into the industry. You are 99% likely to get the question in every interview from the HireVue to Superday. (HireVue can be seen as the first round interview after you pass your CV round, while Superday refers to the final interview round when you will be invited to meet interviews in person/ or remotely).
A lot of people don’t have thorough preparation because they might think this is an easy challenge to overcome. Nonetheless, such an easy question without practicing in advance can kill your chance to get into Investment Banking.
Most candidates give ambiguous and generic answers, which hasten their interview scores. Though you should not present all your past experience and accomplishments, your answer has to include key points triggering enough for interviewers to dive deeper in your story through the duration of the interview.
Also, keep in mind that, the interviewer will ask you a lot of questions in regard to behavioral, technical and market news, while the duration for each interview is limited for each candidate. Therefore, to show your personality in the best way, for behavioral questions like this, you should trim down your words to answer within 30 seconds yet keep it insightful, precise and detailed enough.
Listed below are several examples of cliche answers, brought out to make samples for candidates.
- It is the best environment to work and learn
- I want to work in a fast-paced environment like Investment Banking
- I want to learn a lot
- I want to work closely/ collaborate with outstanding and inspirational colleagues
As you might see, all interviewees can speak like those and nothing differentiates themselves among thousands of prominent candidates.
Annually, each bulge bracket reportedly hires 2% of all candidates. With around 20,000 candidates for the CV round, the number comes down to 300-400 slots for the main office/headquarter like one at Wall Street.
The cliche and generic answers, leading to nowhere, is much likely to be similar to a majority of other candidates.
2. Tips and What You Should Prepare
Before getting to sample answers, let’s get started with valuable tips and the formula that can help you shine in such a small question yet pivotal.
Purpose of the question, it allows recruiters to evaluate:
- Do you understand the realities of Investment Banking?
- Do you understand the position you are applying for?
- Do you know the requirements to get into the industry?
- How willingly do you commit to the work with a high-pressure environment, intense working hours and bureaucracy-laden hierarchy combined?
Before you rehearse, to figure out what recruiters demand from a candidate, there are some key points they expect you to cover:
- Your background
- Point out a key point related to finance and investment (more important if you are not a finance-related major)
- Your inspirations to pursue the industry (from the internship, the club, other persons or the observation)
- What have you done to pursue the passion (valuable knowledge, modelling skills, etc)
3. Communication Approach
If you don’t arrange your ideas clearly, your communication approach may lead interviewers to miss your answer’s intent. Since they work on hundreds of interviews on Superday, your answer can be lost in the jungle. Successful candidates structured their answer in Top-down communication.
Top-down communication is a method in which you will mention your most important and key point right at the beginning of the answer, then the details following will be presented to support the key message.
No matter what your major is, you are supposed to fall into one of the three categories as follows:
- Undergraduates (Finance major/ and non finance-related major)
- Graduates (MBA, Finance-master degree)
- Career Switchers
Each group approaches the question in a different way. But:
The General Structure can be
- Start with the key message to show your passion
- Continue with your background and why you want to pursue finance
- What do you do to prove your passion?
4. “Why Investment Banking” Samples
4.1 For Undergraduates
Step 1: Start with a key message
“I want to be in Investment Banking/ I want to be an Investment Banker/ I want to start off my career as an Investment Banker.”
Step 2: Continue with your background and try to connect what you did with finance:
- For finance-related majored:
“Through my degree, I have gained exposure to investment banking and finance as early as my freshman year. I joined my school investment club and learned about picking the most lucratively prospective stocks and bonds.
My passion for investment and finance arose over and over, day by day. Especially in a workshop held at my school campus, I met a lot of professional bankers, which got me inspired a lot.”
- For non-finance related major:
“I come from a technical background. During my degree, I joined a few internships and realized I am more interested in finance and business.
I got an finance internship in the sophomore year. In the job, I spoke with a lot of people working in different divisions. I started to keep my finger on the pulse of market trends, M&A news, iminent IPOs, and recent deals. I also did a few finance courses to equip myself with necessary knowledge and skills about valuation, financial modelling, and finance analyses on my own. I am confident that I can work in an Investment Banking role. “
Step 3: Next with your efforts you put to pursue the industry
“I know that I have to work in an Investment Bank, that’s why I registered for finance courses related to modelling, valuation, and strategic analysis. Those courses provided me with the required skills and solid foundations to chase what I have dreamt since I was a freshman.”
Step 4: Conclusion
The final sentence of the above paragraph can be your conclusion
-> The answer above is a nearly perfect one since we try to trim it down to keep it in no more than 30 seconds.
4.2 For Graduates (MBA, Other Master degrees) and Career Switchers
Step 1: Start with a key message as mentioned above
“I really want to work in Investment Banking.”
Step 2: Continue with your background
“Prior to MBA, I worked in a healthcare company. I used to think that I would pursue healthcare and medical until one day, another bigger firm stepped in to acquire my company. I’ve changed my mind since then.
My boss pulled me into the deals so that I could provide numbers and comprehensive and granular analysis for the M&A team, which got me interested in finance in the first place.
I thought about switching to finance, that explained why I decided to do an MBA program.”
Step 3, 4: What do you do to meet requirements for a finance/investment banking role and conclusion
“Though starting with a non-finance major, MBA program provided me with business and finance knowledge, valuations and financial modelling.
I see myself in the next 5-10 years that I want to advise healthcare and medical firms, since combining my healthcare background and banking experience makes a great match.”
5. Mistakes You Should Avoid
An answer nailing the first impression should go along with strong action verbs. Your total interview scores are not likely to be weighted in favor of just the question “Why Investment Banking”. The questions can be asked at the beginning or the end of the interview. If done wrong, the passion for finance will not be conveyed accurately.
These are some mistakes you should stay away from to score the most:
- Repeat the word “learn” in your interview answer – This word is considered weak and indirect to how you want to work at Investment Banking.
- Answer more than 30 seconds – The recruiters don’t want to spill the interview into nights after a hard-working day, so keep it simple and direct to what they want to hear.
- Say as to what you and your ability could offer the firm – You should avoid generic answers aforementioned like: I want to learn business/finance from Investment banking. It doesn’t look great.
- Provide a convincing and detailed answer – What triggers you, what prompts your passion for Investment Banking and Finance. The more granular your answer is, the more convincing it will be.
Boiling down to the most important part, it is the rehearsal. The interview is more of an exam, in which the rehearsal resembles your homework of reflection. You can go find a tranquil place to sit down, then jot down the journey getting you interested in finance and banking. After thinking of the most compelling reasons, you can write it on a paper, rehearse in front of a mirror to adjust your gestures and facial expressions, rehearse in front of a friend who can give you constructive comments, or practice an interview with a professional banker if you are fortunate to have a connection with one.
No matter what happens, keep in mind that if you stumble on such an easy question, in all likelihood you are out of the race.
Investment Banking is high-profile. Hundreds of thousands of candidates compete for a position. That requires you to have a thorough preparation to shine up in an interview. BankingPrep Interview Guides cover all types of interview questions and tips to shine up in an interview for Investment Banking’s roles. Good luck with your application!