Who needs
investment banking training?
Until recent times investment banking training was largely
an internal affair. Trainee investment bankers learned how to
value businesses, assess investment opportunities and advise
their clients over merger bids by observing and hearing how
their veteran colleagues worked with their clients.
While the importance of these practical
lessons in the making of a successful investment analyst or
banker are evident, there has been a growing trend for seeking
trainees with higher education in investment banking, or at the
very least higher education in a finance or accountancy related
field.
Investment banks have also made increasing efforts to
improve in-house training for their employees. By calling their
internal training programs investment “banking universities”
they are clearly indicating the high educational standards new
recruits are expected to attain.
The growing interest in providing investment banking
training within the banks and in various institutions of higher
learning seems to be prompted by a number of different
developments. Investment houses see that recognized academic
qualifications can provide their employees with an improved
understanding of the business world and how the bank functions
within it.
A degree in investment banking requires up to three years of
intensive university study. Students who qualify with good
grades have developed proven skills in drawing up financial
models, analyzing conflicting investment choices and devising
capital raising strategies and so they become more attractive
candidates for positions in the bank.
While it is hard to artificially recreate in a lecture room
setting tense meetings with difficult clients, or the pressures
where a quick decision needs to be made over a huge investment,
effective investment banking training gives novice bankers the
resources to more effectively handle these real life banking
challenges.
From the students’ perspective the successful completion of
an investment banking degree course proves their interest in
making a career in this field. Usually an internship in an
investment bank is included to supplement classroom learning
and there is a real possibility that the bank management will
take notice and recruit the most promising students.
In an increasingly competitive job market where tens of
applicants might be chasing after each opening, students
believe that their investment banking degree gives them a
distinct advantage. Universities recognize the appeal of
investment banking training as a draw to new students looking
to enter an occupation still viewed as well paid. This
encourages the initiation of new courses or the addition of
investment banking as a specialty option for an existing
finance degree program.
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