In a sea of over achievers who are equally talented, likeable and prepared, the "Why investment banking?" interview question can be the only differentiating question left for bankers to ask; making it both a popular & decisive question.
Whilst for college students who don't look like aspiring bankers on paper (i.e. no fin/acc major, business degree or relevant work experience) it's of epic importance. After all, you guys need to be able to explain why you want to do investment banking when your past decisions don't suggest anything of the kind.
How do you give a 10/10 answer to the "Why investment banking?" interview question?
There's a huge selection of points you could make, but keep it short and sharp. Generally a good answer will contain 3-5 solid reasons why you're interested in IB.
Typical examples like world class education, skills development, type of work, the challenge, real responsibility in billion dollar transactions etc. are all acceptable.
But try not to trot out the same BS as everyone else.
Importantly, avoid reasons that are self-centered in a 'bad' way.
Let me explain. As a banker interviewing you I'd be OK if you mentioned investment banking attracts you because of the learning opportunities, as this is a selfish reason that also, and ironically, benefits the bank - passionate 24 year olds put in 100-hour work weeks with ease after all.
But if I heard you wanted to do IB simply in order to 'build your resume' and/or to secure an exit opportunity I would - in my mind at least - throw you out the freaking door and then proceed to lay a BlackBerry beat down! Being made to feel like a halfway house for financial vagrants, a mere stepping-stone, is not my idea of good times you see. So even though everyone knows investment banking is attractive for the resume & exit oops don't say it!
What can help you avoid a BlackBerry Beat Down? Well, you would get me extremely interested if you answered the "Why investment banking?" interview question by talking about how you have older friends in banking who have over the years shared with you what it's really like to be a banker - both the good and the bad.
And then how that's made you realize 3 specific things about banking which make it stand out above any other graduate job.
Not only will I believe you still love banking despite the war stories, but that you've actually given it some thought beyond "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 reasons 'why investment banking' and it will connect them to the sources you learned them from whether they be friends, professors, books etc.
Want 6 specific reasons 'Why investment banking' that are sure to work? Try talking about how you love the...
1. Cornerstone role investment banks play in deals and/or the role they play more broadly within the world of business - IBs are to business what the White House is to the world...central hub HQ! And this is why bankers are called masters of the universe. So bring up this point, albeit laced in more formal language and without ever mentioning 'masters of the universe'!!
2. Coalface exposure to industry and financial markets, which is unique to IB - there's not a graduate job on the planet that puts you closer to the action than banking.
3. Results-driven deal-oriented approach - this point distinguishes banking from so many other professions like law, consulting etc, where players often get paid for simply 'doing', as opposed to 'achieving'. And by specifically mentioning this point you will show bankers that you've got the right mentality and that you're not an increment-fiend like lawyers. PS Once again be sure to phrase this in a more professional kinda way!
4. Type of people that work in banking - talk about this from both a learning and enjoyment point of view, and most importantly reference people you know in banking (particularly at that bank) to avoid looking like you're simply shining shoes and kissing ass!
5. Nature of the work - analyzing, problem solving, real-world focused. If you are going to talk about this then make sure you bring up a handful of examples in passing; e.g. 10k analysis, spreading comps, deal structuring etc.
6. The specific industry/product group you are interviewing with - this is a must! By talking about why IB through the lens of that specific group, you'll really narrow the reasons down to specific, tangible, relatable ones - and that means bankers are more likely to believe you and like you. e.g. If you say to Goldman Sachs TMT that you want to do investment banking because you find the business/investing side of the tech industry fascinating after working as an unpaid intern at a social media start up over summer, then you'll hit the "Why investment banking?" question out of the park!
Whatever you choose, be sure you can talk intelligently about it if probed by the bankers.
Special note for those of you with non-banking experience.
If you have work experience in accounting, consulting etc. then tell the bankers that whilst your time at KPMG or BCG or wherever you worked was a terrific experience, it didn't offer...[reasons why you love IB].
This is a hidden opportunity to further explain your story, point out why you want to change into banking now and assure them again that IB is what you truly want above all else.
Any comparison you make should be delivered subtly though. Not because your interviewer might have worked at KPMG or BCG, but simply because it looks unprofessional to blatantly badmouth others. Negativity in any form doesn't look good.
Special note for 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 of why IB even harder to convince bankers to take you on. This is because bankers hate offering permanent spots to candidates who might quit the minute things get tough.
Passion is a banker's best insurance policy against this - so make sure you show it guys!!
If you want to go one step further and really impress the bankers with your answer, then tell them how you became interested in IB years ago and point to the real life things you've since done that have confirmed your passion; studies elected, college clubs joined, people met, friends talked to, books read, jobs taken.
Showing a long and considered journey to get into investment banking is the idea here.
What's the final secret to a magic answer here?
Recognize the downers of banking, not just the uppers. Bankers you see, want to hire students who aren't being drawn to banking based simply on Hollywood-hype or CNBC-glamor. They want to know you are realistic about the job, prepared to do grunt work, and yet still super passionate.
After all, the Jimmy Cramer fan club and the Gekko Wannabe students will never be able to hack it when they find out what investment banking really involves - and this sort of drop out costs the banks a bomb.
So with all that in mind, during your answer briefly mention how your friends in banking have clued you in on the realities of the job too - the long hours, sacrifice and other downers which we'll talk candidly about in the Inside Investment Banking System when it comes out this fall.
Of course, don't end your question on a downer - meaning be sure to follow up any reality checking with your 3 main reasons why IB repeated in very very short form, kind of like "...but of course banking is an easy choice for me, because of...".
Now that you've conquered the "Why investment banking?" interview question, check out our advice on other common investment banking interview questions and answers now.
Richard is the head writer for Inside Investment Banking - a one-stop shop of advice for students just like you who want to know how to get into investment banking without a 4.0 GPA from Harvard or nepotistic connections on Wall Street.
Created by a team of 5 young bankers, Inside Investment Banking contains all the real insider advice you need to write killer banking resumes, answer tough interview questions, network with bankers and much more.