blog Bonorum et Malorum

The 10 biggest challenges of breaking into investment banking and how to overcome them

Written by Fmi.Online

Investment banking, being one of the top career choices for fresh graduates, tends to attract many. Fresh out of business school, the allure of a six-figure salary, being immersed in the Wall Street culture, and the prestige of working for one of the world’s oldest business institutions can be enticing. Even if you have a unique combination of education, experience, and passion, gaining entry into investment banking can be challenging. Let’s look at the top ten challenges of breaking into the IB industry and how you can overcome them. 

Not knowing how to network

The importance of networking in investment banking can’t be overstated. How can online applications stand against personal, human relationships? Given the intense competition in the industry, online applications hardly work. In 2021, JP Morgan received 125 applications for each job opening in the IB department. 

One should focus on building their network right from their college. Career events, alumni networks, industry fairs, talking to professors, and campus placements are great places to start. You can also email bankers and others in this industry and request to meet for informational chats. This way you can start building a relationship with them even before applying for jobs. However, you must stay in touch after the initial conversation. 

Unrelated academic background 

While it is true that investment banks hire from a variety of fields, a liberal arts major can indeed get a job at Wall Street. However, as observed by Business Insider, a college degree in finance was pursued by a majority of the investment bankers on Wall street. Accounting and business degrees are also popular educational backgrounds. If you stick to the traditional fields of study that are most closely aligned with the industry, you’ll be tilting the odds in your favour.

Nonetheless, you can improve the odds by pursuing courses related to investment banking or finance. Alternatively, you can opt for a double major, with a second major in finance, if your college allows you to do so. At last, you can pursue an MBA in finance right after your graduation. 

Average college degree 

Investment banks recruit candidates from the best universities in the world. Ivy League schools, the LSE, the University of Cambridge, the University of Oxford, and the University of Warwick are consistently the top choices for recruiting potential candidates. Graduating from a decent college is the bare minimum and might help you enter into IB as an intern but your chances of getting hired as a junior analyst are much higher with a degree from a renowned institute.

Can you expect to break into IB without attending a prestigious institution? You can stand out and attract attention with your grades. Graduating at the top of your class will place you in an advantageous position. Moreover, you can also go for advanced degrees such as MBA to improve your chances of breaking into IB. 

Lack of technical knowledge 

The basics of corporate finance, economics, Excel and valuation are fundamental blocks that any IB aspirant must know. An investment banker works on multiple types of corporate transactions, and it is expected from the candidates to be well-informed about them.

One can overcome this challenge by reviewing the basics, going through case studies, practising questions, reviewing recent IB deals and through online courses. 

Lack of analytical skills

Analytical skills are an essential component of any job role in IB. You need to improve your analytical skills along with related skills such as communication, presentation, financial modelling, etc.

You can improve upon your analytical skills by studying deals on subjects like M&A, and IPOs, practising financial modelling and engaging in intellectual conversations regularly with your peers, seniors, professors, and analysts. 

No professional experience

You read that right! Lack of experience could be a serious challenge even when you are trying to break into the industry. Internships provide a path for candidates and fresh graduates to obtain full-time employment in investment banking. 

If you haven’t thought about internships yet, you must start applying to summer internship programs at all the top investment banks. An internship allows you to try out your desired field, gain exposure to the culture, get work experience, and impress potential employers

Not standing out

Trying to stand out in such a crowded industry is hard, especially when you are competing with top graduates from the best universities around the world. However, you must differentiate yourself from other candidates to gain an edge over your competition and make an impression in the eyes of the recruiters. There are several ways to do that – you can start by showing your passion and willingness to learn by pursuing online courses. You can start investing and maintaining a portfolio of different asset classes, along with your reasonings. Moreover, you can pursue summer internship programs in investment banking or related fields of finance such as asset management. 

Quality of resume 

According to research, it takes 6 seconds for a recruiter to go through a resume, before selecting or rejecting it. Use this time to build a resume that will help you stand out. Make sure that your resume is short and it includes keywords relevant to IB. 

A relaxed approach towards life

If you are not disciplined enough to go through the lengthy process of reaching out, sending cold emails, following up and facing rejections, breaking into investment banking would be a great challenge. You can develop a daily routine of sending cold emails and reaching out to potential employers without expecting great results in the initial attempts. You must prioritise this exercise as much as your studies and must follow your routine daily. 

Lack of confidence

Many candidates often fail to communicate their passion towards the industry during interviews due to nervousness. Although it is natural to be nervous, you must remember that the person interviewing also shares the same interest and had the same zeal as you a few years ago. If you have made it to the ‘super day,’ you must remain calm and use every opportunity to express your genuine interest in the field along with your willingness to learn and meet new people. 

The Bottom Line

If any of the challenges resonate with you, you must also understand that these challenges can be overcome easily. The trick lies in starting early and being consistent so that you have time to improve. 

More Articles

10 Essential Skills Financial Professionals Need Today

As a result of the predicted global recession, the business environment continues to remain volatile and is more dynamic than ever. As a result, finance professionals who work efficiently, think strategically and can take quick decisions, can pivot as needed. To thrive, professionals must accept and adapt to changing circumstances while responding to opportunities and […]

Read more

How to Start Your Dream Career in Private Equity

Have you ever imagined turning a $20 million investment into $50 billion in less than 15 years? That was a mega deal led by Softbank in the early years of Alibaba – one of the most successful Private Equity (PE) deals of all time.  PE is one of the fastest growing industries in the financial […]

Read more

5 Investment Bank(s) You Can Aim to Work for at the Beginning of Your Career

Despite the demanding working style, cut-throat competition, and the long hours involved, investment banking continues to attract tons of job applications every year. An investment banker works with companies on large corporate transactions such as mergers & acquisitions, capital markets, fundraising, IPOs, and investments in general.  But why exactly the gravitation to investment banking? Its […]

Read more

Top 3 Things You Should Know About Swaps

As the name suggests, a swap is a financial exchange agreement in which the involved parties swap pre-agreed cash flows. These flows are typically related to interest payments based on the nominal amount of the swap. Between the two cash flows, one value is always fixed and the other is variable and based on an […]

Read more

Top Three Ways to Launch Your Career at Credit Suisse

Credit Suisse dates back to 1856, when it was originally founded as Schweizerische Kreditanstalt to finance the expansion of the railroad network and boost industrialisation in Switzerland. Over the next century and a half, it would go on to become one of the world’s leading financial powerhouses.  Owing to its reputation, Credit Suisse receives a […]

Read more

How to Land a Dream Role in Investment Banking at CitiBank

CitiBank was founded in 1812 in New York. Today, it is one of the world’s leading banks with their core activities as: safeguarding assets, lending money, making payments, and accessing the capital markets on behalf of their clients.  With over 200 years of experience under their belt, CitiBank is also one of the most coveted […]

Read more

Top three ways to get into Bank of America with no experience

Bank of America is an American multinational investment bank. It is headquartered in North Carolina, U.S. Currently, BoA is the second largest bank in the U.S., the first being JP Morgan Chase. Bank of America is included in the Big Four banks in the U.S., the other being JP Morgan Chase, Well Fargo, and Citibank. […]

Read more

3 horrible mistakes you might be making with financial analysis

Financial analysis is a significant part of all investment banking deals. It refers to the process undertaken to analyse and evaluate projects, companies, or other financial transactions based on their returns, performance, and suitability to the investment bank. Financial analysts have to use multiple analysis techniques like fundamental and trend analysis to derive their conclusions. […]

Read more

10 things your boss wishes you knew about the currency market

The currency market is a platform where participants can come together to buy and sell various currencies. It is also known as the foreign exchange or forex market.  The currency market plays a pivotal role in international trade and resultantly, in the economy. However, not many people know about the currency market and how it […]

Read more

10 Things About The Equities Market That You May Not Know

We all know that stock markets, also known as equity markets, are a hot topic especially owing to current events such as the pandemic, the predicted recession, and Russia’s war on Ukraine. But why do stock markets exist? What is a stock market The stock market is a platform where shares/equity of companies are traded. […]

Read more
Our Courses are designed to boost your career

Launch your career with Fmi’s Learning Pathway

Choose a learning pathway that best meets your needs and ambitions. Not sure which Fmi learning pathway is right for you? Explore our CareerBuddy videos for help and advice.

Investment banking pathway

Investment banking pathway

Monthly Subscription
  • courses-clock60+ hours
  • courses-desktop9 courses

Investment banking offers many exciting career opportunities for students. From Financial Analysts to Investment Management, and Sales & Trading to a wide range of roles in infrastructure such as IT, Risk or Compliance. This pathway is designed to help you understand the investment banking industry, the roles investment banks are recruiting for, and most importantly, help you to develop the practical skills you need to get into the industry and your preferred role whether this be as part of a school leaver, intern or graduate program.

FMI Online Student join-student-img2 FMI Online Student
55,000+ students currently enrolled
Global markets pathway

Global markets pathway

Monthly Subscription
  • courses-clock70+ hours
  • courses-desktop10 courses

Global markets provide a range of important products and services to corporates, institutions and governments worldwide from executing trades and managing risk to providing quality research content. A key business area in all investment banks, global markets offers a wide range of career paths for students to consider across all functions and at all levels from school leavers to internships through to graduate programs.

FMI Online Student join-student-img2 FMI Online Student
85,000+ students currently enrolled
Asset management pathway

Asset management pathway

Monthly Subscription
  • courses-clock50+ hours
  • courses-desktop8 courses

The asset management industry is a global industry worth over 100 trillion US dollars. It plays a crucial role in managing the assets of retail and institutional investors, offering a wide range of exciting careers in doing so. If you’re looking to forge a career in asset management, our Asset management pathway is perfect for you. We help you build the skills all asset managers are looking for and explore everything you need to know about the industry and the wide range of roles available in the sector

FMI Online Student join-student-img2 FMI Online Student
100,000+ students currently enrolled