9 responses to banking interview questions which will get you the job
Investment banks are notorious for asking unusual interview questions. Even though Google has stopped using oblique interview questions, banks are still known to ask things like, 'What can you do with an orange?" or "How many weddings are there in Germany each year?"
While these weird questions are usually thrown in by a line manager with a need to prove him/herself, banking interviews are also the province of the human resources (HR) department. And HR people like to standardize things.
Below, we have listed some of the more predictable questions you will be asked by HR people and recruiters when you try getting a job in banking. This is how to answer them if you really want to get hired.
1. How did you deal with a real life situation where your values were challenged?
Ethics are becoming more important to banks. Ever since Sergio Ermotti admitted that some crazy people might have squeezed through the recruitment net at UBS, banks have been doing their utmost to weed out sociopaths and rampant narcissists.
The emphasis on ethics is manifesting itself in interview questions relating to values. "We use scenarios to ascertain how people will react in particular situations and to see how they fit with our culture and values," says the head of recruitment at one American bank in London, who declined to speak on the record. "We're very collaborative and we want to see that people's values match our own."
A senior recruiter at a British bank confirmed the importance of values-based questions during the contemporary banking interview. She says the ideal response is one which a) shows an appreciation of the bank's values and b) uses an example from the interviewee's own working life to demonstrate those values in action. "You need to answer these questions using real examples that reflect the bank's own values. If you don't, you'll be in trouble," she says.
2. Why investment banking?
Given that banking is a less popular career than it used to be, asking people why on earth they want to become bankers has become the norm in interviews for junior positions in banks. Under no circumstances must you say that you're in it for the money.
"In the context of today's world, interviewers will ask entry-level bankers why they don't want to be medics or engineers," says David Schwartz, a former recruiter for Goldman Sachs turned headhunter in New York City. "People will say things like, 'I want the intellectual challenge,' says Schwartz - and then you'll point out that you can get intellectual challenge from other industries too. It's about getting to the bottom of their motivation."
If you're interviewing for a job in IBD, Schwartz says the correct answer to this question is to say that you want to help the biggest companies in the world achieve their strategic financing needs. "You can't achieve that in hedge funds or private equity. If you want to be involved with all the most important companies in the world at a strategic level, you need to work for a major investment bank," he says.
If you're interviewing for a job in sales or trading, you'll need to justify why you don't want to work for a hedge fund from the outset. Try talking about the benefits of working for a large 'flow monster' bank with good visibility on what's happening in the market.
3. Why not strategy consulting?
This is another question which will typically be asked in interviews for junior jobs in banking - especially at MBA entry-level.
Schwartz says the correct answer here is to emphasize that your interest is in financing and balance sheets, not in operational strategy. "If you're interested in operational strategy, go to McKinsey. If you're interested in financing, go to Goldman," he says.
4. Why did you leave your current role?
This question isn't specific to banking. It is, however, of particular interest to banking recruiters who are especially keen not to pick up damaged goods now that their hiring budgets have been cut.
Faced with this question, you must never cite disagreements with your boss, problems at your previous firm, or annoying ex-colleagues, says Logan Naidu, chief executive of recruitment firm Dartmouth Partners. The correct response is something truthful as possible, within these constraints.
5. Give me an example of a deal that fell through, what would you have done differently?
This is a question for senior M&A bankers and is intended to test their truthfulness and willingness to learn from mistakes. Schwarz says the correct answer is something along the lines of: "'I'd been calling a client for 18 months and he told me there were no deals he wanted to do - but six months later he did a deal through a competitor. It taught me the value of staying in touch with the client even when he says there's nothing going on."
6. Which deals do you think need to take place in your sector?
Again, this is a question asked of senior M&A bankers. "The best M&A bankers are not just about working deal by deal, but making their mark across their whole sector," says Schwarz. "For example top media bankers will be thinking in terms of how the media industry needs to be reshaped and the deals that can achieve that."
7. Why this firm?
Fundamentally, all banks are fairly similar but they all like to think they're very different. Before you go into any interview for a job in a bank, you should familiarize yourself with that bank's most recent results, with each and every statement it's made about its culture and values, and with any important pronouncements from senior management. Be prepared to trot these out as proof of your keenness to work for that bank above all others.
8. What will be the biggest challenge for you if you come to work here?
The head of recruitment at another British investment bank (again, speaking anonymously) says this kind of question is also becoming more important and is another way of testing candidates' awareness of culture. "We want to know how easy they will find it to integrate and how much they know about what it's like to work for us," she says.
The correct answer is one which is honest and which identifies areas where integration could be an issue. If you can cite conversations with existing staff, so much the better. You need to demonstrate strong awareness of the cultural superiority of the new firm and to show that you won't behave as if you work at Lehman Brothers in 2006.
9. Why do clients choose to come and work with us?
This is another oblique question regarding culture and the factors that differentiate one bank from the next. "When we ask this, we want to see that a candidate really understands what makes us special," says the British recruiter. Make sure you know this a long way in advance.