What is investment banking?

Investment banking is one of the most competitive and demanding sectors in the world of finance. Working in investment banking means acquiring a range of technical knowledge, the ability to work in demanding environments and under pressure, as well as some technical skills. But what is investment banking exactly?

If you are interested in this field, you can prepare by studying the Degree in Business Analytics in Madrid at the Universidad Europea, where you will be trained in business intelligence, statistics and programming to gain an overview of the financial sector and its potential.

Investment banking: what it involves

Investment banking is a segment of banking that helps companies, governments and other institutions to raise capital, as well as advising on complex financial transactions, acquisitions, mergers or corporate restructuring.

Commercial banking, on the other hand, focuses on services such as savings accounts or loans, among others, while investment banking operates at a strategic level and is oriented towards the capital market.

How can you train to work in investment banking?

In this section, we indicate some of the steps to get to work in investment banking. Of course, there is not just one path, there are several options through which you can develop this profession.

• Previous university studies: study a degree related to the area of finance and business such as the Degree in Economics, the Degree in Business Analytics or the Double degree in in Business Management and Economics in Madrid, among other similar degrees.
• University specialisations: these include MBAs or advanced studies such as the Master's Degree in Business Analytics or the Master's Degree in Big Data Analytics. as well as other related subjects.
• Experience and internships: participate in university financial activities and internships offered in degree or master's programmes.
• Networking: attend conferences, webinars and other events in the finance industry to learn how the sector works and create a solid network of contacts.
• Preparing for interviews: practise beforehand with case interviews and questions about behaviour, finance, accounting and company valuations.

Skills for working in investment banking

These are some of the skills that will enable you to stand out in the financial sector.

Analytical knowledge and finance

• The ability to analyse data and make decisions based on quantitative information.
• A thorough understanding of company valuations and financial statements.

Skills in mathematics and financial modelling

• Master tools such as Excel and different data management and financial modelling software.
• Knowledge of cash flow discounting techniques, market comparisons and various transactions.

Working under pressure

• Ability to handle large volumes of data, tight deadlines and a heavy workload.
• Resistance to stress and working under pressure, maintaining precision in situations with high demands.

Good communication and negotiation

• Ability to present financial reports and related recommendations accurately.
• Good communication and interaction to negotiate financial agreements and maintain customer relations.

Strategic thinking

• Ability to detect investment opportunities and assess risks.
• Be precise in data analysis with attention to all details.

How much do you earn in investment banking?

The average salary for investment banking in Spain is approximately €80,160 per year according to the Glasdoor job portal. This all depends on internal and external factors such as the responsibility of the position, previous experience and mastery of tools and other financial techniques.

Investment banking salaries vary significantly based on role, experience, and location. In the USA, entry-level analysts typically earn a base salary of $100,000 to $120,000, with total compensation including bonuses reaching $150,000 to $200,000 annually (Wall Street Oasis, 2024). In the UK, base salaries for analysts range from £50,000 to £60,000, with total compensation reaching £80,000 to £100,000 (eFinancialCareers, 2024).

If you are thinking of working in the financial sector, the European University offers a wide variety of degrees in business and technology so you can choose the training that interests you the most.