Why Investment Banking

One of the first questions that will come up in nearly every banking interview is “Why Investment Banking?” and for good reason. This question is an easy way for banks to differentiate candidates as it is often one students have difficulty addressing effectively.

What makes a strong response depends on your background and narrative, but there are a few general objectives you want to achieve through your answer:

1. Be personal and specific
2. Illustrate your interest 
3. Show you understand the job

This guide will walk through how to tackle this question in a way that will help you stand out from the crowd. 

What NOT to Say

While there is no correct answer to the question, there are general points you will want to stray away from. One of the major pitfalls is being generic in your response. For example, try to avoid using the following buzzwords or explanations in your response:

• Banking is a fast-paced environment
• Banking lets you apply finance and accounting skills
• Banking helps develop Microsoft proficiency
• Banking is collaborative and team-oriented
• Banking is challenging

These types of responses tend to lend themselves to less dynamic conversations and will do little to help support your case.

There are also other points that you should definitely avoid. While there may be some truth to them, these responses are trivial, and make it seem like your interest in the job is more superficial in nature:

• Banking offers a high salary for a post-undergraduate degree
• Banking offers multiple exit opportunities into lucrative industries

How to Craft a Constructive Answer

Be Personal and Specific

The key to the question lies in the setup. A good way to start off is by explaining how an experience in your life has lent itself to investment banking, whether this will be your first job, or if you are going through a career change. The following examples can be tailored to you situation as a start: 

• You were involved in an investment club that provided exposure to the financial markets.
• You have a family member whose business was impacted by investment banking.
• Your previous job had exposure to banking, and you realized that you could merge both skillsets while focusing on a job that aligned more with your long-term career aspirations.

Illustrate Your Interest

Once a baseline has been established, it’s important to show that you have taken actionable steps over time to learn more about the role and better position yourself for a job in the field. This can be anything, ranging from joining finance clubs in college to shadowing / cold emailing bankers. 

Show You Understand the Job

To tie everything out, it’s important to weave into your story that you fundamentally understand the types of transactions that investment bankers oversee and what is done on the desk. Here, you can highlight specific aspects of the job that intrigue you. 

For instance, if you previously worked or interned in the media and telecom space, you can talk about a merger (like Disney / Fox) that you read on and how it transformed the competitive landscape by putting more pressure in the content race. 

Spending some time to develop your response to this question in a thoughtful way will help to differentiate yourself from the field. This approach can be applied across multiple interviews given its near ubiquity across the Street.

Example Response

Here is an example of how to piece together a concise, but effectual response:

"During the Global Financial Crisis, my family’s business faced significant hardship by the overextension of credit, nearly causing the business to go bankrupt. As a result, from an early age, I understood that finance has both the capacity for good, in developing economies and supporting growth, and for adversity if misused. 

Since then, it’s been important for me to be able to leverage finance as an agent for positive change in the corporate environment. I’ve explored various opportunities in the space through internships and college courses, from FP&A to private equity, and have found that there is no better way to do so than in investment banking. Investment banking offers the opportunity to help companies use financing options, like IPOs and debt acquisition financing, to support their strategic initiatives, and ultimately contribute to their broader development. In this role, we have the chance to participate in some of the most significant transactions a company will ever go through, and I feel like that makes for a rewarding career."

Additional Resources

If you're interested in further developing your technical skills to better compete for elite level investment banking roles, check out our Complete Finance & Valuation Course using the get started button below!

Other Articles You May Find Helpful

• How to Become an Investment Banker
• My Goldman Sachs Investment Banking Resume
• Must Know Finance Interview Questions
• Goldman Sachs Video Interview Tips