Maybe it's the challenge. Maybe it's the status. Maybe it's the salary. Whatever it is, there’s no doubt investment banking is a promising graduate career.

What is investment banking?

Investment banking is not a single career. There are many different specialisms, career paths and even different names for the various divisions and products.

However, there are two fundamental areas: investment banking itself (once called merchant banking and often now called corporate finance) and capital markets.

Corporate finance

When you think of an investment banker, you are probably thinking about someone who works in the banking division of an investment bank.

Companies use the investment banking division to help them raise capital through issuing shares or bonds. Another key area within the investment banking division is advising companies on mergers and acquisitions (M&A).

Read more about corporate finance.

Capital markets

The second big area of investment banking is capital markets. This is where the banks trade bonds, stocks and other financial products (so-called securities).

They can either trade for themselves (propriety trading), for rich individuals or for institutional investors. Most investment banks will also have their own fund management departments competing against specialist institutions within capital markets.

Operations

Together, investment banking and capital markets make up what has traditionally been called the front office – the money-making part of an investment bank. The back office provides all the support functions. This area is also known as operations, or sometimes as infrastructure and logistics.

Graduates outside operations, sales and trading will almost always start out as analysts researching specific companies, their competitors and the industry in order to help the research functions of the various departments give advice on current value.

The attractions of investment banking

Salaries aren’t the only benefit, although they are very good. There are also other, less tangible benefits.

Investment banking is at the heart of the way our society is organised. Anyone who succeeds in this career is guaranteed a high status that comes from being so close to the heart of business.

The training is generally in house and very well regarded. Inevitably, therefore, competition is fierce.

Investment banks’ company culture

Investment banking culture is famously meritocratic; the old ’school-tie’ network no longer determines success. However, it is very much a sink-or-swim culture, and you will have to demonstrate your value.

On top of this, the old investment banking adage remain true: in good times they over-hire, in bad times they over-fire.

Temping in investment banks

If you don’t get onto a graduate scheme, it is possible to secure work in an investment bank as a temp. Pay is not as good, and chances are you’ll be in back- and middle-office functions, such as operations, IT or client services.

However, it may mean you can get a foot on the ladder, become known and start gaining experience. If that desn’t take you where you want to go, most investment banks are quite happy to let you apply for their graduate schemes the following year.

Investment banking job descriptions

• Fund manager
• Investment analyst
• Investment banker (corporate finance)
• Investment banker (operations)
• Stockbroker
• Trader

Find out more

• Capital markets
• Corporate finance
• Fund management
• Mergers and acquisitions
• Operations
• Sales, trading and research