The “Why Investment Banking?” Interview Question: How to Give a 10/10 Answer

In a sea of ​​equally talented, likeable and poised achievers, the “Why Investment Banking?” the interview question may be the only differentiating question bankers have left to ask; so it is a popular and decisive question.

While for college students who don’t see themselves as aspiring bankers on paper (ie no finance/accessories major, business degree, or relevant work experience) it holds epic significance. After all, you should be able to explain why you want to go into investment banking when your past decisions suggest nothing of the sort.

How do you give a 10/10 answer to the question “Why Investment Banking?” Question?

There is a wide selection of points you could make, but keep it short and to the point. Generally, a good answer will contain 3-5 strong reasons why you are interested in IB.

Typical examples like world-class education, skills development, type of work, the challenge, actual responsibility in multi-billion dollar transactions, etc. they are all acceptable.

But try not to bring up the same nonsense as everyone else.

It is important to avoid reasons that are self-centered in a ‘bad’ way

Let me explain. As the banker who interviewed you, it would be fine if you mentioned that investment banking appeals to you because of the learning opportunities, as this is a selfish reason that also ironically benefits the bank: passionate 24-year-olds work 100 hours a week. easily after all.

But if I found out that he wanted to do IB simply to “build his résumé” and/or to secure an exit opportunity, I would, at least in my mind, kick him out the damn door and then proceed to beat the crap out of his BlackBerry. ! Being made to feel like a halfway house for financial bums, a springboard for mothers, is not my idea of ​​good times, you see. So while everyone knows that investment banking is both résumé and exit appealing, gee, don’t say so!

What can help you avoid a BlackBerry Beat Down? Well, I would be very interested if you answered the question “Why investment banking?” interview question talking about how you have older friends in banking who over the years have shared with you what it’s really like to be a banker, both the good and the bad.

And how that has made you realize 3 specific things about banking that make it stand out above any other graduate job.

Not only will I believe that you still love banking despite the war stories, but you’ve actually thought it a little further than “I need a salary of Blankfein proportions if I’m ever going to pay off these student debts.”

What I’m trying to say is that a great answer will list unique and specific ‘why investment banking’ reasons and connect them to the sources you learned them from, be it friends, professors, books, etc.

Want 6 specific ‘Why Investment Banking’ reasons that are sure to work? Try to talk about how you love the…

1. Fundamental role of investment banks in deals and/or the role they play more broadly within the business world: IBs are to business what the White House is to the world… central headquarters! And that is why bankers are called masters of the universe. So let me mention this point, albeit in more formal language and never mentioning the ‘masters of the universe’!
2. Coalface’s exposure to industry and financial marketswhich is unique to IB – there is no graduate job on the planet that brings you closer to the action than banking.
3. Agreement-oriented and results-based approach – this point distinguishes banking from many other professions such as law, consulting, etc., where players are often paid simply to ‘do’, rather than ‘achieve’. And by specifically mentioning this point, you’ll show bankers that you have the right mindset and that you’re not a markup fiend like the lawyers. P.S. Once again, be sure to phrase this in a more professional manner!
4. Type of people who work in banking – talk about this from both a learning and an enjoyment standpoint, and most importantly, refer to people you know in banking (particularly in that bench) to avoid looking like you’re just shining shoes and kissing ass.
5. nature of work – analysis, problem solving, focused on the real world. If you’re going to talk about this, be sure to mention a handful of examples in passing; for example, 10k analysis, comp distribution, deal structuring, etc.
6. The specific industry/product group who you are interviewing with, this is a must! By talking about why IB through the lens of that specific group, you’ll really narrow down the reasons to the specific, tangible, identifiable ones, and that means bankers are more likely to believe and like you. For example, if you tell Goldman Sachs TMT that you want to go into investment banking because you find the entrepreneurial/investor side of the tech industry fascinating after working as an unpaid intern at a social media startup over the summer, then you’ll get there. to “Why Investment Banking?” ask out of the park!

Whatever you choose, make sure you can talk smart about it if the bankers prove it.

Special note for those of you with non-banking experience

If you have work experience in accounting, consulting, etc. then tell the bankers that while your time at KPMG or BCG or wherever you worked was a great experience, it didn’t offer…[reasons why you love IB].

This is a hidden opportunity to follow explain your storyexplain why you want to switch to banking now and reassure them again that IB is what you really want above all else.

However, any comparison you make must be subtle. Not because your interviewer has worked at KPMG or BCG, but simply because it seems unprofessional to blatantly trash talk others. Negativity in any form does not look good.

Special Note to Aspiring Investment Banking Analysts

PS: For those of you who get this question in an investment banking analyst interview (i.e. not a summer internship interview), you’ll need to push your story as to why IB is even harder to convince bankers to accept it. This is because bankers hate offering permanent places to candidates who might quit the moment things get tough.

Passion is a banker’s best insurance policy against this, so be sure to show it guys!

If you want to go a step further and really impress bankers with your answer, tell them how you got interested in IB years ago and point out the real-life things you’ve done since that have confirmed your passion; Studies were chosen, college clubs were joined, people were met, friends were talked to, books were read, jobs were accepted.

The idea here is to show a long and considered journey to enter investment banking.

What is the final secret to a magical answer here?

Acknowledge the downsides of banking, not just the upsides. The bankers you see want to hire students who aren’t drawn to banking simply because of the Hollywood hype or the glamor of CNBC. They want to know that you are realistic about the job, that you are prepared to do the hard work, and yet remain very passionate.

After all, Jimmy Cramer’s fan club and Gekko Wannabe students will never be able to hack it when they find out what investment banking really entails, and this kind of abandon costs banks a bomb.

So, with all that in mind, during your response briefly mention how your friends in banking have also given you clues about the realities of the job: the long hours, the sacrifice, and other depressions we’ll talk about candidly in Inside Investment Banking System. . when it comes out this fall.

Of course, don’t end your question with disappointment; i.e. be sure to follow up any reality checks with your top 3 reasons why IB repeated them very briefly, something like “…but of course banking is an easy way”. choice for me, due to…”.

Now that you have conquered the “Why Investment Banking?” interview question, check out our tips on other common investment banking interview questions and answers now.