If you're a student looking for a job in an investment bank, you will have come across the investment banking application form. You will also have come across the sometimes oblique questions that banks ask on their application forms. These questions are important: they're the only way banks can differentiate between thousands of candidates with excellent academics and identikit memberships of college finance societies. Your answers to these questions are what will bring you to life.
So what should you write? We picked a selection of application questions asked by European and U.S. investment banks and asked ex-bankers and ex-banking recruiters what an outstanding answer looks like. Question-by-question, this is what they told us.
"You need to do your homework," says Victoria McLean, managing director at City CV and a former recruiter for Goldman Sachs. "This is all about research and not just about regurgitating what you find on the careers page of their website (which is what most graduates do)
Youtube is a good source of info in terms of understanding the division – as is Investopedia and eFinancialCareers' student centre. – Do you know anyone in the industry or even better in this division (and firm)? If so, talk about them in your answer - say what impressed and inspired you about them. If you don't know anyone, do some networking and ask questions to get an insider’s view. – Has the bank you're applying to won any awards lately? Has it been involved in interesting ,cutting-edge transactions? Mention this.
You can also look at whether the division you're applying to has behaved in any special way in the wake of the global financial crisis and more recent financial turmoil? This can be a really good way to impress with your intelligence and knowledge by coming up with a motivation that isn’t the same as everyone else’s.
When you're talking about why you're interested in working for that division, you need to link your motivation back to your skills. Focus on combining what the division does with what you are good at. Ensure your claims are evidence-backed with some good stories/examples. Can you demonstrate a proactive long term interest in this business area? Something outside of your education? If so then this is the place to mention it."
"This is essentially what I would call a ‘strengths’ question," says McLean. "You need to think carefully about your target division, its function and activities
What are your strengths in relation to your target role? Again anything you say needs to be evidence-backed by an interesting (and true) story. If the story is memorable even better. Your stories can be from uni, extra curricular activities (especially those that show leadership, strategic thought, discipline, commitment, relationship building and teamwork), from internships or other work experience or university projects and assignments etc.
Think about ‘hard’ skills as well as the softer (more fluffy) ones. Think ‘key words’. Include your USP – what sets you apart from the other 5,000 grads applying to this role? Again, is there anything memorable about your experience that you can mention?
Think about what skills are required to work in this area – what will you be doing each day and why and how does this suit you?"
"It’s important in an application to give specific examples of the competencies that the company is looking for," says Rosalyn Claase, head of student development at Edinburgh University Business School and a former graduate recruiter at Goldman Sachs. "Many organisations look for leadership experience. This may be related to extra-curricular activities – for example being the captain of a sports team, or heading up a student society – or practical work experience like being team leader during your part time or vacation work. Do be clear on what you achieved and delivered in this role – it’s not enough just to say you were a leader; recruiters want to know what impact you made in that role, and what makes you an effective leader.
Some recruiters may also be keen to find out in more detail about how you have differentiated yourself during your studies, so it is worth highlighting any key awards or scholarships you may have received – focus on those which have most relevance or are most recent. A recruiter doesn’t need to know about how well you performed at school when you were 14! A professional qualification, in some industries, may also help distinguish your application if it is relevant to the role."
"From a recruiter’s perspective, it’s really important they know exactly why you are choosing to apply to their firm," says Claase. "You need to demonstrate you’ve really done your research, and have tried to understand their culture and values, and why you would fit into and contribute to that. Many applications fail at the first hurdle because candidates don’t articulate what it is that makes them want to work for that firm instead of another, or, worse still, forget to change their motivation statement from one firm to another!"
"You could write pages to answer this question but the best approach is to pick one of the biggest issues," says Peter Harrison at banking application coaching firm Harrison Careers. "I would choose MiFID 2. Explain briefly the issue in your own words after a Google search. Then add your comments and opinion to make this sound really exciting and threatening (it is). The way you convey your excitement will get higher marks than simply summarising the act. Think of newspaper headlines! For example:
MiFID 2 will decimate the OTC trading profits of the I-Banks!
They will spend tens of millions on implementations!
Retail investors will be winners!
Big institutional investors could be losers as opacity and dark trading pools get eliminated!"
"These questions are easy," says Harrison. "If you buy a copy of something like Financial News, you can choose from 10+ articles each week that could easily answer these types of question. For example, I picked up a copy and read about European issuance of Contingent Convertible bonds (“CoCos”).
The article said that $33bn of CoCos were sold in 2014, generating 300 million plus in capital markets fees and trading profits for investment banks. However, issuance has now stopped because investors await the outcome of the November 2014 European Banking Authority stress tests. Equally, The Financial Conduct Authority plans to ban sales of CoCos to retail investors from 1st October this year. Investors are realising that CoCos more closely resemble equities than bonds.
If you were answering this question, you could talk about the CoCo market and say that these really are exciting times for risk managers as the deal with the coming stress tests. You could also say that this is big negative news for the debt capital markets businesses of big banks as it looks like fewer CoCos will be issued in future."