With traditional banks and brokerage houses offering investment banking services, the industry has grown rapidly. Some private equity firms have also joined the industry, hoping to make hay while the sun shines. This has generated a large number of investment banking jobs.
A traditional investment bank has various divisions, such as investment banking, investment management, and financial market operations, which also involves sales, trading, research, risk management, operations, and technology.
The typical investment banking job description includes identification of investment ideas or avenues, presenting them to clients, and completing transactions if clients are convinced. This is followed by preparation of documents to execute deals and issuing securities to investors. On the other side of the transaction, negotiating with bidders or merger targets is an important task. This process generates a variety of jobs in investment banking requiring wide ranges of skills. The financial analyst, the salesperson, and the legal expert are essential to completing the process.
Investment management refers to the management of various securities, like stocks, bonds, commodities, other assets, and derivatives comprising a portfolio. This service is provided to investors who may be individuals or institutions such as pension funds or corporations. An investment manager's job is to watch over investors' portfolios and monitor whether they meet their objectives of investment.
The financial market operations of an investment bank have proven to be the most profitable. It is the responsibility of the financial market division to meet clients, network with institutional and high-net-worth individuals, and suggest trading ideas and take orders. These orders are then communicated to the trading desks, where they are executed. Security traders have many opportunities. This division is actively supported by the sales and marketing personnel.
The research division reviews various companies, reports on their prospects, and sometimes rates them. This division offers research jobs to financial analysts.
Risk management involves assessing market and credit risk involved in daily trades and setting exposure limits to prevent trading losses. The importance of market surveillance jobs and risk management jobs in the investment banking industry vary with the level of activity in the industry.
In investment banking, operations functions are as important as after-sale service in any other industry. Operations functions involve validating trades carried out and effecting corresponding transfers of funds and securities. This critical aspect of banking involves managing and reporting financial information. Highly qualified staff are required in this area to understand in depth the deals and transactions of the bank.
In this era of automation, if there is any industry that is largely dependent on technology, the financial services industry is it. Investment banking is also greatly dependent on technology; thus, it offers a large number of technology jobs in the areas of networking, software, and hardware.
The number and types of jobs with lucrative compensation offered by this industry depend on the performance of and level of activity in the industry, which in turn depend on the markets and the economy in general. Considering the volatile nature of the investment banking industry, it is important to decide which area you want to work in, as only a few areas, like operations, are not affected by the above conditions.
