Banking and Investment

The first decision you will need to make is what type of work you would like to do. The sector is dominated by Investment Banks, Retail Banks, M&A Advisory Boutiques, Asset Management Firms, Private Equity firms, and Trading firms.

At a high level the industry can be split into the buy-side and the sell-side and within each of those there are a variety of roles offering very different remuneration, work life balance and skill requirements.

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The Buy-Side (Investment)

Make money for their clients including high net wealth individuals, governments, pension funds etc by investing their capital in various financial products. Their aim is to deliver higher rates of return by devising effective investment strategies.

You may have heard of the term hedge fund and maybe even pooled fund or mutual fund. All of these fall broadly under the Asset Management umbrella and have roles including fund managers, analysts, researchers and operations analysts. All have different skill sets but as an investment analyst you would typically conduct research and analysis to make decisions in which companies to buy and sell shares or equity in.

The Sell-Side (Banking)

Provides a market for their clients (including high net wealth individuals, governments, pension funds etc i.e. the buy-side) to purchase financial products, this is known as market making. They also provide complementary research and custodian services (the holding of assets). The market making roles, often referred to as ‘markets’ or ‘secondary capital markets’ include sales, trading and research roles.

The Sell-Side also has another core function in helping companies raise capital. This can be in the form of debt (similar to you taking out a credit card or loan) or equity (selling a part of their company) these markets are often referred to as DCM (debt capital markets) and ECM (equity capital markets).

Mergers & Acquisitions and Corporate Finance

The other function of Investment Banks and other specialist corporate finance houses is to help companies to restructure through buying or selling, parts of, or their whole company, or merging with another company. This is known as M&A and the function most readily associated with ‘Investment Bankers’.

This is a deal based, high profile function and often the most competitive. Bankers in this area often work the longest hours, and are amongst the most highly remunerated.

This is a highly competitive sector and firms receive applications from students across the globe. So you will need good research and preparation to secure the right job.

You don’t need to have studied a finance related degree, but it’s important to have a keen interest in and understanding of the wider concepts within the banking industry and global markets. Follow the business news by reading publications like the Economist and the Financial Times. Investopedia also has a dictionary of finance terms which can help you become more familiar with the language used in the sector. You also need a high degree of analytical intelligence and the ability to build and maintain good working relationships in what can be a competitive and pressurised environment.

Getting work experience is very important for a full-time graduate role in this sector (and often a requirement). It’s important to note that most banks use their internships as a major pipeline for their graduate programmes, and many larger banks only recruit for a small number of full-time roles in Michaelmas.  We would recommend looking for 1-week work experience “Spring Week” in your first year (or second year if you are on a 4 year course) and summer internships (approximately 8-12 weeks) in your penultimate year, to gain as much experience and exposure as possible. If you don’t get an internship in your penultimate year, all is not lost, as a number of the large banks offer “off-cycle” internships for those who have just graduated. Smaller organisations often also have graduate programmes open to finalists and recent graduates or offer full-time entry-level positions outside of a formal graduate ‘programme’.

Timing

It’s very important to have a good understanding of application deadlines as they are usually earlier than other sectors, and interviews often take place before the deadline has passed.

Most recruitment by large organisations takes place between July and November, otherwise known as the ‘Milkround’. The vast majority of banking and investment graduate application periods close in late October/early November, if not earlier. On the whole, investment banks recruit on a rolling basis, hiring graduates as they come through the application process. As such, it is essential that you apply as early as possible, ensuring your preparation is completed well in advance. Please do not wait for the deadline!

Most interview/assessment dates take place between September and February with a few vacancies throughout Hilary and Trinity Terms as well as during the summer. However, smaller firms tend to recruit on a more fluid basis and it is not uncommon for them to receive speculative applications throughout the year.

As far as we can see, firms in this industry sector are planning on recruiting in a similar way for the 2021 season, albeit many events are likely to be virtual. 

Application and Assessment

The application and selection process will differ depending on the type and size of firm you are applying to. Always ensure that you know and understand what this will be prior to application, as some assessment processes begin immediately after you have submitted your application.

Below is a general guide, but the process will vary from firm to firm:

Online Application or CV & Cover letter– If an application form is required it is likely to comprise both motivational and competency questions. See the information on our website about Application FormsCVs and Cover Letter for tips.

Online Tests– You will usually have to sit a numerical test for financial roles, and possibly a verbal and/or abstract reasoning test. Increasingly organisations are using games-based scenario assessments at this stage in place of psychometric tests. Look at individual firms’ websites for practice tests and our Psychometric Tests web-page for tips and free access codes.

1st Round Interviews – these can be with HR staff or members of the department/team to which you have applied, by telephone, in person, or pre-recorded/video interviews – see our pages on Interviews. Depending on the firm they may be competency-based, technical, or a combination of both.

2nd Round Interviews or assessment centre – for some roles this will be the last stage. See our Assessment Centre webpage for advice.

3rd Round Interviews – these are common if the position to which you are applying is for a specific desk or division. In this case the last round of interviews is likely to be with the direct manager of the position applied for. Some firms (especially smaller boutiques) will organise “super days” in which candidates will meet multiple people in the office for a series of short interviews. This is to ensure that, in addition to technical ability, there is an overall “fit” with the culture of the firm.

Firms in the banking and Investment industry have been quick to adjust recruitment processes to make them accessible without travel, so be prepared for your assessment centres and interviews to be virtual.

Required skills

Different skills will be required for the different roles within the sector. For example – a sales person within an investment bank will need have a real passion for the markets, strong interpersonal skills and the ability to work to targets. Conversely, a quantitative researcher is likely to need a PhD or advanced masters in a maths-related degree (eg: Maths, Physics, Engineering etc.), with advanced quantitative and programming skills and enjoy developing mathematical models.

Some of the common traits of successful graduates in this sector are:

  • A keen interest in and understanding of the wider concepts within the banking industry and global markets
  • A high degree of analytic intelligence
  • The ability to deal confidently with figures
  • Given the high levels of responsibility, competition and pressure, it is important for graduates to demonstrate sustained stamina, energy and competitiveness over long periods.
  • The ability to cope well under pressure, whilst maintaining good working relationships with co-workers and clients at all levels is essential.

Getting experience

In this competitive environment, knowledge of the employer, their skill requirements and your own strengths are essential in ensuring your success. Background research on investment banking, global markets, the various roles available within banks and how they fit together is key. Knowledge of banking basics and investments, the ability to speak about them with interest, enthusiasm and realism further highlights your credibility. Networking and utilising contacts already in the industry is useful to improve your understanding and the possible roles you could consider.

Formal Experience in the sector can be gained through Spring Weeks and Internships;

Spring Weeks & Insight Days

Most large banks organise “Spring Week” programmes, for first year students (or those in the second year of a 4 year course) to provide an insight into roles within banking. These are generally organised over Easter (about 1 week) with students required to apply online – deadlines may vary, with some as early as mid-Michaelmas term (October/November) or early-mid Hilary term, so it’s advisable to check websites of firms you are interested in as early as possible. Spaces are limited and competition is fierce so ensure you demonstrate how the programme could benefit you, often via a covering letter and/or initial interview. On the whole, these programmes are used as a pipeline for the summer internship programme; many organisations host fast-track assessment centres after these events for summer internships the following year. In addition some banks organise ‘Insight Days’ targeted at 1st and 2nd year students throughout the year. These are also designed to provide a taster of the banking industry.

Internships

Summer Internships within Banking and Investment tend to be 8-10 weeks long and will involve some initial training and then some exposure to one or more areas of the business. Interns are assessed throughout with various projects, research or team work depending on the line of business. This summer most firms have moved to hosting fully virtual experiences, some of which will be shorter than the standard 8-10 weeks.

As most firms use summer internship programmes as the main method for sourcing full time hires, they recruit mainly penultimate year students or those who can prove they are continuing in education following the summer internship. Some banks do open up their internships to finalists and recent graduates or offer “off-cycle” internships to finalists and graduates after they have completed their degree, but this is usually dependent upon business needs. It is advisable to look into the opportunities you are eligible for at all the organisations you are considering and to make sure you are aware of their specific requirements.

Firms can utilise various assessment methods eg: competency-based, technical and/or strengths-based interviews in their recruitment process and will look for evidence that you can demonstrate competencies such as teamwork, drive, enthusiasm, determination, and communication skills.

In addition to formal Internships, at all levels of study, it is useful to build up your knowledge of the industry and develop core competencies through extra-curricular activities. For example, you could take a leadership position in a society, join a financial society such as the Oxford Guild or the Finance Society or run an event that needs to make a profit. You could also consider building your technical knowledge through running your own fantasy fund, learning Excel or joining a society such at the Oxford Alpha Fund where you will receive valuation and investment training.

Access short, free open-access training courses and short ‘virtual internships’ for example with the Bright Network or posted by leading companies in law, consulting and finance on Forage, allowing students to try sector specific programmes to develop skills and test their interest in the industry.    

Will I get paid?

Internships and summer jobs are governed in the UK by National Minimum Wage law, which means that if you are carrying out activities that class you as a “worker” by the employer, then you should be paid. Full details of Employment Rights and Pay for Interns are published by the government.
If you are undertaking a learning and development opportunity such as a micro-internship, or volunteering for a charity or statutory body, or shadowing or observing, then you may not be eligible for the National Minimum Wage. The organisation may reimburse you for your travel and/or lunch expenses, but they aren’t obliged to do so.

Top Tips

  1. The vacancies pages on CareerConnect provide a listing of available roles throughout the year from a number of key recruiters.
  2. Attend the events and presentations of the firms that interest you, and talk to their representatives. Ensure you read the firms’ literature and scrutinise their websites – but remember they are not looking for you to regurgitate what is written online! Lots of Q&A sessions are now being hosted virtually throughout the year. These will be in the events calendar on CareerConnect and listed on individual firms' websites.
  3. Attend the Finance Fair in Michaelmas Term and the Banking Springweeks and Internships event which the Careers Service runs later in the academic year, to get a feel for the sector, meet company representatives and find out about opportunities. Do some preparation before the fairs and try not to ask questions that are available on the companies’ websites.
  4. Think about getting some work experience: formal Springweek programmes and summer internships are the key pipeline to full time roles within this sector.
  5. To increase your knowledge of global markets, read relevant material that you find interesting. For example, the business pages of the main national papers or the Financial Times and The Economist, which include comprehensive information to help shape your views.
  6. Utilise alumni to increase your knowledge of specific companies and roles available to you. Speak with practising analysts and associates at the fairs and company presentations or to finalists returning from internships.
  7. Whatever stage you are at in your career, developing your knowledge of the field and seeking out unadvertised vacancies is often best achieved through networking, i.e. speaking with alumni, former interns, graduates, contacts met at careers events, etc.
  8. Consider joining student societies – some of the societies you may consider joining at Oxford include: The Guild, Capitox, The Oxford Alpha Fund and Oxford Women in Business. They all run relevant recruitment and social events with employers and highlight opportunities to students.
  9. Prepare for technical interviews using online resources (plenty listed in the resources section below) Think outside the box – the big-name firms receive hundreds of applications from Oxford students alone and are only the tip of the financial iceberg. Explore a range of firms (through LinkedIn, rate my placement, fair booklets, target jobs …) many have fantastic opportunities and less competitive application processes.

Preparing for Interview Questions

Typical Asset Management questions might cover topics including;

  • What’s going on in the world?
  • What is the affect on interest and exchange rates?
  • What investment decisions you might take if given say $50,000?
  • Which stocks do you think are under/over valued at the moment?
  • What alternative investments are interesting?
  • What’s happening generally in different asset classes?

Typical Banking questions might cover topics including;

  • What happens when interest rates rise?
  • what would you buy with say $50,000?
  • What financial stories you are interested in and why?
  • What type of trade deal we should be negotiating with the EU?
  • What are the main economic drivers?
  • What are the main financial products?

More technical questions (for positions such as quant trading) could include probability and sequence recognition for example;

  1. Throw a die, you are paid the number you throw. If you are not satisfied with the first result, you can choose to throw the second time. What is the expected payoff?
  2. x^x^x^… = 2. What is x?
  3. How many digits are in 99 to the 99th power?
  4. A has 6 points and B has 4 points. The flip a coin and if it’s a head, then A gets a point from B. If it’s a tail, then B gets a point from A. What’s the probability that A wins with 10 points?
  5. What is the sum of all the odd numbers in between 1 and 100?
    You are offered a contract to buy a piece of land for 300K. This land is worth 1000K 70% of time, 500K 20% of the time, and 150K 10% of the time. The contract says you can pay somebody x dollars to determine the land’s value and then decide to purchase the land or not. What is the highest value of x you should be willing to pay if you’re completely rational?

These examples are taken from Interview Brain Teasers where there are many more available (and the answers!).

Postgraduate students

Postgraduate students may find themselves in a ‘grey area’ between traditional undergraduate analyst programmes and MBA associate-level positions. Your best recourse is to find out more information by carefully reading the graduate recruitment section on each firm’s website, or to speak directly with graduate recruiting staff from the banks at the Finance Fair or company presentations.

DPhil students with quantitative backgrounds are actively sought for quantitative analytical roles in firms (particularly students with advanced degrees in statistics, mathematics, physics, engineering etc).  In addition, keep an eye out for DPhil/Quant specific events that are run by firms (and the Careers Service), especially in Michaelmas. A helpful website for information on quantitative roles is Wilmott.

The Finance Fair Booklet (See Michaelmas Term Fairs, re-published each year in mid-October) has a really useful table detailing all those firms who attend and whether they are interested in receiving applications from DPhils and postdoc researchers. It also shows if they have internships specifically for DPhils and postdoc researchers.

The Careers Service also hosts a bi-annual event ‘Careers in Finance for Researchers’ and often has a finance based panel at the Conference for Researchers – keep an eye out on CareerConnect for upcoming events and booking details.

General vacancies and occupation information

Online test and technical preparation resources

As well as the resources listed in the Psychometric Tests briefing, the following websites are good for practice tests:

Sector vacancies

News

Recruiters are keen to have a diverse workforce and many will have policies and processes that are proactive in recruiting students and graduates from diverse backgrounds. An increasing number of recruiters are offering traineeships, internships and Insight events and many are being recognized for their approach to being inclusive employers. To find out the policies and attitudes of the recruiters that you are interested in, explore their equality, diversity and inclusion policy. Search their website to see if they have any specific staff networks, look out for external accreditation such as whether they are a Disability Confident employer, a Stonewall Diversity Champion or part of the Mindful Employer charter promoting mental health at work. Check to see if they are partnering with organisations such as Rare Recruitment, SEO London, MyPlus Students' Club (disability), EmployAbility (disability and neurodifference) and there are many more that are working for specific communities. A key place to look is to see what they do to celebrate diversity on their Facebook and Twitter pages.

The UK Equality Act 2010 has a number of protected characteristics to prevent discrimination due to your age, disability,  gender reassignment, race, religion or beliefs, sex or sexual orientation. For further information on the Equality Act 2010 and to find out where and how you are protected, and what to do if you feel you have been discriminated against, visit the Government’s webpages on discrimination.
 

 

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