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The Status and Challenges of Investment Banking

The Status and Challenges of Investment Banking

At times people often ask the difference between an investment banking and a regular commercial bank. Well, unless you’re from the finance sector, terms such as these often leave you clueless. The challenge in this industry specifically revolves around sectors such as the market electronification, capital charges, and stuck cost etc.

In simple terms, an investment banking refers to a specific division of banking that is in relation with creation of capital for other companies. They’re the ones responsible for underwriting debts and equity for other corporations ensuring they have the proper guidance to issuers related to any displacement of stock or any other related issue. At times, they also help in accelerating sales.  Apart from this, they are also responsible for facilitating mergers, acquisitions, broker traders and reorganizations for private investors or other institutions. If required trading securities for their own accounts can be taken up by them, unlike other banks they do not accept deposits. A profession such as this often intrigues professionals looking to make huge bucks? If you’re having second thoughts, you might want to rethink and probably take a decision later. If so, earning an investment banking certification today will prove beneficial. 

There are two major objectives in investment banking, first is the selling side and the second is the buying side.  The seller side includes trading securities for money or maybe for a promotion or maybe for other securities, e.g. an underwriting research. And the buying side includes providing advices to institutions that is in search of buying investment services, e.g. Unit trusts or hedge funds.

The significance of investment banking:

  • For individuals

It plays a crucial role to individuals looking for investment opportunities also acts like a mediator providing consultancy services.

  • For corporations

Corporations looking to raise capital to facilitate the trading of their securities can easily rely on investment banking. Investment banks also provide advisory services regarding mergers, acquisitions and divestiture.

Investment banking is an industry that will always face crisis and challenges. Banks are already caught up with building requirements for newer models. Also, the ability to sell products becomes extremely crucial to cope up with today’s rapid job market and competition. Investment banking activities such as management, operations and businesses are now being scrutinized by the media and regulators. The clients of today are getting anxious having high expectations and standards. No doubt the regulatory is in a shift at the local level as well as in the global level.

Most of the investment banking roles include helping clients raise capital by issuing debt or selling equity in companies. Apart from this, it’s either assisting clients with mergers and acquisitions giving them advices on how to make a unique investment opportunity. But why are people opting for a career in investment banking? Well, as astounding as it sounds a career in this field paves a pathway to earn one of the highest salary compensation in today’s competitive job market. One should not have second thoughts on taking up a career as an investment banker. No doubt they’re the ones with a fat paycheck, but it is not easy money.

If you’re looking to hop into a career as an investment banker, then now is the right time to saddle up and acquire skills to stay relevant and in-demand by the job market.

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