Application questions: How have you felt about taking or initiating action which might be considered a risk?
How have you felt about taking or initiating action which might be considered a risk?
Why are they asking this? In many investment banking roles, such as M&A, sales and trading and across all types of assets (be they equities, bonds or property), individuals will often need to be comfortable taking 'measured' risks in their daily roles in order to maximise overall business gain. This usually relates to activities such as deal making, identification of new markets or opportunities, revenue generation and market share versus their competitors.
Managing risk, therefore, is a vital asset for a successful career in investment banking and something banks look at very seriously. An individual's ability to assess, plan and take risk can be learned through mentoring and guidance. But it can be argued that some individuals intuitively have better judgement of what constitutes good risk or 'measured' risk and how to avoid what is perceived as bad risk.
How should you answer? Show examples of how you have approached risky situations. The idea is to illustrate how you successfully assessed opportunities versus threats, how you planned accordingly to avoid things going wrong and what you did to maximise gains.
Students should perhaps think about relating examples outside of the working environment.
For instance, you may be able to show how you judged and assessed various situations while travelling abroad. Or you might have an example of an adventurous or dangerous pursuit in which you have taken part. Alternatively, a simple example of how you managed your own savings or investments portfolio, in particular demonstrating your thinking and decision-making, might also work well.
And what mistakes should you avoid? Don't fall into the trap of just saying what you think the recruiter wants to hear. Be original, talk about something different or personal to you even. Particularly on a question like this, take a risk!
