Contact Us
×

Day: May 15, 2023

Creating a Discounted Cash Flow Model for Investment Analysis

Posted on by Imarticus Learning

Companies before taking on new investment plans have to understand if their investment is going to be financially rewarding. Various evaluation methods are used to conduct a comprehensive evaluation of the financial well-being, and potential for growth of a business. One such valuation method is the Discounted Cash Flow analysis which is used to make profitable investment decisions. 

So, what is a Discounted Cash Flow analysis?

Discounted Cash Flow (DCF) analysis is a versatile method that can be utilised to assess the value of various assets such as stocks, companies, and projects. A DCF model is widely used in both the investment industry and corporate finance management to arrive at appropriate investment decisions. 

Usually certified management accountants are responsible for advising firms on investments. With a certified Management Account course one can master the skill of efficiently analysing an organisation’s financial decisions through a DCF model. 

What Is a Discounted Cash Flow Model?

Discounted Cash Flow or DCF is a method of valuation that involves predicting the future cash flows an investment will produce. It uses these predictions to arrive at the investment’s present value. A Discounted Cash Flow analysis aims to determine what an investment is worth currently based on the predictions of its future earnings. 

Who Can Use a Discounted Cash Flow Model?

As discussed earlier, before going ahead with any investment an investor has to discount and project the anticipated cash flow to arrive at suitable investment decisions. A discounted cash flow model is ideal for companies that are comparatively larger and less volatile. The real estate industry widely uses the Discounted Cash Flow model. Seeking employment in industries that employ the DCF technique will be easier with the CMA USA training that will help you establish yourself as a Certified Management Accountant.

How Is Discounted Cash Flow Calculated?

The calculation of Discounted Cash Flow comprises three fundamental steps.  The first step is to estimate the anticipated cash flows from the investment made by the organisation. 

The second phase is to choose a discounted rate. This discounted rate is usually based on either the cost of financing the asset or the opportunity cost associated with other potential investments. 

The final step is to discount the projected cash flows back to the present day using either a financial calculator or a manual calculation.

The formula for calculating a discounted cash flow is:

DCF Formula =CFt /( 1 +r)t

Here, CFt denotes cash flow.

R denotes the rate of interest. 

T stands for the lifetime of the asset being valued. 

How Does a Discounted Cash Flow for Investment Analysis Work?

Pricing a deal can be difficult because of the many variables involved, and investors and transaction advisors often use different types of valuation models, including DCF analysis, to help them make decisions. An accurate valuation is important because it tells you how much your investment is worth and whether a deal is worth pursuing or not.

When performing a DCF analysis, one has to make several assumptions about a company’s projected sales growth, profit margins, cost of capital, discounted rate, and potential risks. These assumptions are used to create a discounted cash flow model that provides insight into a company’s future cash flows. 

There are various challenges associated with calculating the DCF of an investment. For example, choosing from the huge financial information available about the company for a DCF analysis might be very tedious. 

However, with the right training and experience, even this challenging task can be significantly easier. For instance, preparing for the US CMA exam and cracking it can grant significant career benefits to the ones aspiring to get into management accounting. 

Benefits of a Discounted Cash Flow Analysis 

There are numerous benefits of analysing investments with the help of a Discounted Cash Flow. Here are a few pros of using a DCF model of analysis:

  • The DCF method is very detailed in its approach. It uses particular figures, such as predictions for cash flow, growth rate, and other indicators. Considering these indicators are critical for a business to decide on the value of its investment. 
  • Using a DCF model gives organisations insight into whether they should merge with or acquire another company. 
  • A DCF model allows decision-makers to evaluate various situations and adjust their assumptions of an investment efficiently. This gives them a more nuanced understanding of whether the investment will be profitable.  
  • A DCF analysis helps in arriving at the intrinsic value of an asset or business. 

Disadvantages Of a Discounted Cash Flow Model

Although a Discounted Cash Flow model has several advantages, there are numerous disadvantages too. Here are some of the cons that one must consider:

  • Working on a Discounted Cash Flow Model is time-consuming.
  • A huge amount of data needs to be collected to calculate a Discounted Cash Flow. Sometimes it is very difficult to gather so much data and analyse it quickly.
  • It is not easy to estimate factors like capital expenditure. Therefore, a slight error in its estimation can lead to faulty outcomes which can lead to wrong investment decisions.  

Conclusion

Accurately valuing companies and assets takes rigorous training and experience. One needs to be adept in finance and accounting to work on a model like DCF which is full of complexities and likely to cause errors. Usually, management accountants are in charge of conducting the DCF analysis. 

If you want to establish yourself as a successful management accountant and conduct challenging DCF analyses with ease, the Certified Management Accountant course by Imarticus Learning is the right choice for you. The US CMA course is considered the most sought-after certification in the accounting and finance field. 

Imarticus Learning has a record of placing its students at the top organisations across the world with lucrative pay packages that range from 6.5 to 10 LPA for freshers. Take the CMA USA course today to unravel the best employment opportunities globally!

Benefits of Having a Financial Certification

Posted on by Imarticus Learning

Financial certification indicates the level of expertise in a specific area of finance. It is typically earned by passing a rigorous examination and meeting other requirements, such as educational and work experience qualifications.

Financial certifications can cover various areas within finance, such as financial planning, accounting, investment management, risk management and others. 

Capital Market Course

Some examples of popular financial certifications include the Masters of Business Administration (MBA) in Finance, Chartered Accountancy (CA), Cost and Management Accountancy (CMA), Company Secretaryship (CS), Actuary, Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Economics, Statistics, Chartered Alternate Investment Analyst (CAIA), Financial Risk Management, Financial Modelling and Investment Banking programmes.

Earning an IIM Financial services certification course can demonstrate a professional’s knowledge, skills and credibility to potential employers and clients. It may also lead to career advancement opportunities and higher earning potential.

Capital market and its need 

A capital market is a financial marketplace where individuals, companies and governments buy and sell long-term financial instruments such as stocks, bonds and other securities. Capital markets facilitate the flow of capital from investors with surplus funds to those needing capital for long-term investments, such as companies or governments.

Capital markets can be divided into two types: primary markets and secondary markets.

In the primary market, newly issued securities are sold for the first time through an initial public offering (IPO). In this market, companies can raise capital by issuing new stocks or bonds, and investors can buy these new securities.

In the secondary market, existing securities are bought and sold among investors. In this market, securities are traded on stock exchanges or over-the-counter markets, and the price of securities is determined through supply and demand.

Capital markets are important for economic growth because they allow companies and governments to access long-term financing. They also offer investors an opportunity to invest in long-term securities and receive a return. The capital market is closely monitored by regulatory bodies to ensure transparency, fairness and stability.

A detailed knowledge of capital markets is essential if you want a career in finance. All finance programmes cover capital markets in their curriculum.

Ten benefits of a financial certification

A financial certificate can go a long way in landing the desired finance job. Here’s how it can add value:

  • Increased credibility: Earning a financial certification indicates that you have met rigorous education and experience requirements enhancing your professional credibility.
  • Higher earning potential: Employers highly value financial certifications, which can result in higher salaries, bonuses and other financial incentives.
  • Career advancement: A financial certification can open doors to career advancement opportunities, such as promotions, leadership roles and higher-level positions.
  • Specialised knowledge: Each financial certification focuses on a specific area of finance, providing you with specialised knowledge and expertise, putting you ahead of others in the field.
  • Improved job performance: The knowledge and skills gained from a financial certification can enhance your job performance, making you more effective in your role and providing greater value to your organisation.
  • Continuing education opportunities: Maintaining a financial certification requires ongoing education, which can keep you up-to-date on the latest developments in your field.
  • Professional networking: Financial certifications provide opportunities for professional networking with other certified professionals, which can lead to new career opportunities, mentorship and knowledge sharing.
  • Career flexibility: It can provide transferable skills that can be applied to various roles and industries, providing greater career flexibility.
  • Increased client trust: Financial certifications can give clients confidence in your knowledge and expertise, leading to stronger client relationships and increased business.
  • Personal satisfaction: Earning a certificate can be personally satisfying and can provide a sense of accomplishment and pride in your professional achievements.

Future of financial certification

The future of financial certification is likely to be influenced by several factors, including technological advances, changing regulatory requirements and shifts in industry trends.

One trend likely to continue is the increased use of technology in financial certification programs. This could include using online learning platforms, AI and virtual reality to create more engaging and interactive learning experiences for candidates.

Another important factor is the evolving regulatory landscape. As financial regulations evolve and become more complex, an increased demand for professionals with specialised knowledge and certification in compliance, risk management and cybersecurity will likely be seen.

In addition, as the financial industry becomes more globalised, there may be a growing need for standardised certification programs, recognised and valued across different countries and regions.

Overall, the future of financial certification is likely characterised by a greater emphasis on specialised knowledge and skills, and more flexible and innovative approaches to learning and credentialing.

Conclusion

The IIM financial services certification courses are highly regarded in the industry and provide participants with a strong foundation in financial management that can help them advance their careers in this field.

Imarticus Learning offers a comprehensive course for a better understanding of capital markets in collaboration with IIM Lucknow.

Advance your financial services and capital markets career with the IIM Lucknow capital market certification course.

Best Practices For Visualising Data with Python

Posted on by Imarticus Learning

In the era of globalisation, a lot of data is produced daily. However, analysing and extracting information from raw data can be very challenging. Data visualisation with Python is a way to overcome this hurdle. 

become a Data Analyst

Data visualisation is a process that makes it easier to analyse, comprehend and observe the data by providing a better and more representative depiction of the data. It means the process of transforming complex data into easily understandable visual representations. Data visualisation helps in analysing specific trends and patterns for overcoming challenging situations.  

Read along to know the multiple best practices when using Python to visualise data.

7 best practices through which data can be visualised with Python

No matter how necessary it is to create visualisations of complex data, there are some points that one should always keep in mind. Here are some of the best practices one cannot miss out on when visualising data with Python.

Select a suitable tool for data visualisation

Choosing the right tools after establishing the objectives of visualisation is important. There are several code libraries and no-code platforms that help in presenting data in a user-friendly format. 

The most common and popular low-code data visualisation tools are Tableau, and Power BI. Tableau is a popular visual analytics platform that allows the designing of representative charts, graphs and dashboards. Power BI is a business intelligence platform enabling users to create multiple interactive representations. 

If you’re directly working with Python code, ‘Jupyter Notebook’ might be the best tool for you.

Cleanse the data properly

Cleaning and processing the data is an integral step as it frees it from anomalies. However, many things are done to make the data error-free, such as standardising it, removing missing or duplicate figures, deleting unpaired data etc.

Let’s say that you have a table consisting of ‘date’, ‘products’, ‘product_id’, ‘number of units sold’ and the ‘name’ of the person who bought the product. You’re analysing the sales on a particular date. You can go ahead and remove the ‘name’ category, as it does not correlate to the outcome you’re trying to achieve through your analysis.

Choose the right visualisation type

One of the most important aspects of data visualisation is choosing the right chart or graph to represent your data. Python has many libraries like Matplotlib, Seaborn, and Plotly that provide a wide variety of chart types to choose from. Choose the one that best represents the data you are trying to convey.

The most used and easily readable type of data visualisation can be in the form of pie charts, line graphs, bar graphs, heatmaps and so on. The linear regression technique is best suited when you want to represent the data consisting of two continuous variables.

Employ brief titles and labels

The visualisation should have proper titles and labels that make the data easier to understand. Make sure to label your charts and graphs clearly so that your audience can understand what they are looking at. Using titles, axis labels, and legends makes data more accessible.

Try to make the visualisation more interactive

Python visualisation libraries like Plotly allow you to create interactive charts and graphs that can be more engaging for your audience. Consider adding interactive elements like hover-over text or clickable buttons to make your visualisation more engaging.

Consider using other interactive elements like sliders, dropdown menus, or zooming features. These can make your visualisation more dynamic and allow the audience to explore the data in more detail. 

Make use of annotations

Annotations can be a powerful way to draw attention to specific parts of your visualisation. Use them to highlight important data points, provide additional context, or explain unusual or unexpected trends. Using clear and concise language in your annotations is a must, along with placing them in a way that does not clutter the visualisation.

Test your visualisation

In the process of creating data visualisation with Python, it is important to adopt an iterative approach that involves testing the visualisation as you go along. To refine your visualisation, use tools like Jupyter Notebook or Spyder to explore and manipulate the data in minute detail.

Once you have created your visualisation, it is important to thoroughly test it to identify potential issues or errors. This might involve checking the data for outliers, ensuring that the visualisation accurately represents the data, and making sure that any labels or annotations are clear and accurate.

Conclusion

The need for data visualisation can never be overlooked. Python is widely used for data visualisation in data science and machine learning fields. A data science course with job interview guarantee can help you understand the concepts of data visualisation with Python in the best way. 

Python contains numerous data visualisation libraries that you can choose from depending on the requirements of your project. A postgraduate degree in data analytics can arm you with the requisite knowledge. Register for the Postgraduate Program In Data Science And Analytics by Imarticus and enrich your knowledge to lead a successful professional life in this field.

Full-stack development program: Get a job-interview assistance or get your money back.

Posted on by Imarticus Learning

No doubt you’ve heard the term “full stack developer” before. While it’s become something of a buzzword in recent years, there is still some confusion about what it actually means.

In short, a full-stack developer is a web development professional who works with both the front end as well as the back end of a website or application. Full-stack developers have a detailed or in-depth understanding of how web applications work and are able to work with all the technologies and tools involved in the development, from HTML and CSS to server administration.

There is no agreed-upon definition of a full-stack developer; there are certain skills and knowledge that are essential for anyone wanting to pursue a career in this field. So, if you’re thinking about becoming a full-stack developer or are simply curious about what they do, read on for an overview of the skill set and knowledge you’ll need to get started. Plus, we will also cover your best learning option to become a Full-Stack Developer.

Skills and knowledge you need to get started

As a full-stack developer, you’ll need to have a solid understanding of numerous programming languages and web technologies. While the exact technologies you’ll need to know will vary depending on the project or company you’re working with, there are some core skills that are essential for all full-stack developers.

Some of the most important skills and technologies you’ll need to learn include:

  • HTML/CSS: These are the foundation technologies of the web, and all full-stack developers need to be proficient in them.
  • JavaScript: JavaScript is a must-have for any full-stack developer as it’s used for both frontend and backend development.
  • Data structures and algorithms: A strong understanding of data structures is crucial for any developer, but it’s essential for full-stack developers who need to optimize web application performance.
  • Server administration: Full-stack developers often need to be able to set up and maintain servers, so a good understanding of server administration is essential.
  • Git/GitHub: Full-stack developers must be proficient in using Git and GitHub for version control.

These are just some of the skills and technologies you’ll need to learn as a full-stack developer. Of course, the exact skills and technologies you’ll need will vary depending on the project or company you’re working with.

Best learning option to become a Full-Stack Developer

While there is no single agreed-upon answer to this question, the best way to learn the skills and technologies you require to become a full-stack developer is by enrolling in a full-stack development program.

Full-stack development programs are designed to offer you the skill set and knowledge base you need to pursue a career in this field. Plus, most programs offer a job interview guarantee, so you can be assured that you’ll be able to get job-interview opportunities after completing the full-stack developer program.

So, if you’re serious about becoming a full-stack developer, enroll in a full-stack development program today. With the right program, you’ll be on your path to a successful career in no time.

Discover Full-stack developer certification with Imarticus Learning.

Our Full-Stack Developer online course teaches students database architecture and algorithms. During this six-month training, students will learn both the technical aspects of frontend and backend programming—as well as data structures.

Course Benefits for Learners:

  • As part of our Full-stack developer certification course, students will learn to build a full-stack application.
  • This Java full-stack development course offers learners a chance to build a solid foundation in programming languages, algorithms, and data structures.
  • Our course offers learners the guaranteed job interviews that they deserve. Our instructors are experts in their field, and they have years of experience teaching programming courses.

Contact us through the chat support system, or visit our training centers in Mumbai, Thane, Pune, Chennai, Bengaluru, Delhi, Gurgaon, or Ahmedabad.

A Guide To Effective Supply Chain Network Design

Posted on by Imarticus Learning

Introduction

Let us start by explaining What Is Supply Chain Management? In simple words, supply chain management overlooks the entire flow of products, data, and finances related to any service or goods. The supply chain management is responsible for the procurement of raw materials up till the delivery of the final product to its destination.

best advanced certification program in digital supply chain management course

Supply Chain Network Design as a whole is the strategic planning of the supply chain operations that ensure long-term benefits. It involves measuring cost, time, location, production facilities, logistics, and the best mix of suppliers, for optimum product manufacturing and distribution. Furthermore, Supply Chain Network Design also takes into account the sources to procure raw materials, transportation of finished products, storage, warehousing, and ways for delivering goods to consumers.

Supply Chain Network Design, thus is a complex and ever-evolving process that uses mathematical models, algorithms, linear programming, and other software to create supply networks for any enterprise and ways to optimise them.

Key Benefits of Effective Supply Chain Network Design

An effective supply chain network design helps a company or an enterprise in visualising and planning their supply chains to derive the maximum profit. It plays a key role in reducing overall costs, reducing risk, enhancing service, and delivering speed-to-market. Below is a list of the key benefits:

Identifying parts that are potential cost savers

Reduction in inventories and purchase costs

Reduction in transport costs

Reduction in both fixed costs (equipment, facilities) and variable costs (labour, handling charges)

Discerning routes for reducing fuel costs and transit time

Optimisation of services, delivery dates, and customer satisfaction

Transparency in the overall process and cost across the supply chain network

Providing opportunities for the performance of the overall supply chain network by evaluating the costs incurred against set benchmarks

Factors that ensure an effective Supply Chain Network Design

As an organisation, you must focus on the planning of the following key areas to build a strong and effective network design in the supply chain:

Gather supporting data

To design an effective supply chain network you need fool-proof data to back up the decisions. This is one of the most crucial and time-consuming parts of the design process. However, the good news is that a lot of details and data can be obtained from the company’s ERP or legacy system. Some intricacies of the data include the type and quality of raw material, source of raw material, warehousing cost, transport container type, transport cost, and inventory cost.

Procurement costs and processes

The cost of the entire process needs to be carefully analysed. This includes the source to procure raw materials, time, distance, location, and shipping method. Other typical information like capacity, flexibility, and lead time must be finalised. Furthermore, the number of manufacturers and suppliers also needs to be identified.

Logistics and transportation

One of the key aspects of effective planning includes transporting raw materials and delivering finished goods. The planning must include route scheduling, optimising logistics, and ensuring timely and systematic transportation of products or goods. This operational procedure determines the smooth functioning of the entire supply chain process.

Inventory management and planning

This is one of the trickiest factors in managing an effective Supply Chain Network Design. The ideal inventory level needs to be identified that will be transported and stored. Also, the response time to fulfil the demand for goods needs to be chalked out.

Placement of warehouses and distribution centres

Supply chain nodes must be defined accordingly for accurate locations. This also includes finalising the optimum number of distribution centres and warehouses that will assist a strong supply chain network.

Implement and refine

The design of the supply chain network is an ongoing process. It needs to be implemented, analysed, and adjusted to changes for increased cost savings. Changes like a large and new customer base, new location, increased demand, increased production capacity, or a swing in prices of raw materials must be considered. Thus, like all efficient planning processes, supply chain network design should be revisited regularly.

Carve A Path-breaking Career In Digital Supply Chain Management with Imarticus Learning

Supply chain management (SCM), review, and design are gaining a lot of traction. To effectively cope with the challenges and rapid changes in this sector, enterprises globally are looking for experts and Supply Chain Management professionals. Imarticus Learning brings an innovative digital Supply Chain Management Course that is backed by IIT Guwahati. This course is designed to teach What Is Supply Chain Management, design modules, modern digital SCM, defining the models of the supply chain, and so much more! Not only that, but through this Supply Chain Management Course learners will get hands-on experience and exposure to managing real-world business operations through case studies.

Wrapping Up

The supply chain network design segment is emerging as a tremendous career growth that comes with ample job opportunities to drive professionals to enter big companies. Sign up for Supply Chain Management Course to learn skills of higher management levels and reap monetary benefits as you contribute massively to your organisation.

5 Reasons Why an Online MBA Program is the Best Way to Advance Your Career

Posted on by Imarticus Learning

Pursuing higher education has become an essential first step for job progression in today’s fast-paced and dynamic professional environment. The Online MBA program stands out among the plethora of possibilities as a game-changer. 

Students may enter industries like banking, railways, teaching, information technology, agriculture, sports, airlines, healthcare, and more with an MBA Salary ranging from INR 4,00,000 to INR 5,00,000 a year after finishing the online MBA programs.

An online MBA program has become the preferred option for ambitious individuals looking to further their careers. This is due to its distinctive combination of flexibility, accessibility, and academic rigor. Join us as we set out on an exciting trip to discover the five compelling reasons why completing an online MBA program is the surest path to success in the contemporary business world. 

Why an Online MBA is the best investment for your career?

mba in fintech course

There is a rising demand for professionals with Online MBA degrees. Employers appreciate the flexibility and value that an online MBA program offers, enabling students to advance their knowledge and abilities while juggling job and personal responsibilities. Companies seek people with the strategic thinking, leadership skills, and specific knowledge that an online MBA gives as sectors grow more competitive and worldwide.

Unleashing Your Potential: The Five Compelling Reasons to Pursue an Online MBA

  • Flexibility and convenience

Studying at your speed and schedule without sacrificing your career or personal responsibilities is one of the online MBA benefits. Source materials are also accessible to anyone with an internet connection at any time. 

You can select from various electives and specializations to tailor your education to your objectives and interest. Distance Learning MBA programs may benefit working people who wish to further their professions but have full-time obligations. 

Most online MBA programs feature thoroughly thought-out curricula that achieve the ideal mix between synchronous (live courses held at a defined time with attendance) and asynchronous (archived classes that students may finish whenever they’re ready) learning sessions. As a result, the timetables for online MBA courses are quite flexible and adjustable to fit your personal and professional obligations.

  • Quality and credibility

In reality, many online MBA programs offer the same curriculum and staff as their on-campus counterparts and are approved by respected bodies. You can count on receiving a top-notch education accepted and acknowledged by employers and peers.

The new age tools, technology, and concepts are introduced to you in online MBA courses, but they also teach you how to use them in practical situations. Because of this, online MBA programs are a great way to support academic learning and hands-on training. 

  • Networking and collaboration 

Online MBA programs don’t isolate or make you feel alone. Instead, they provide many chances to get to know your classmates and teachers, who can be from other backgrounds, professions, or nations. You may learn from their viewpoints and experiences and create enduring professional and interpersonal bonds.

Anyone from any professional or educational background can choose to enroll in online MBA courses from anywhere globally. Students, therefore, get to interact and connect with a large network of people from all backgrounds. Online courses promote peer-to-peer learning just like those in traditional classroom settings.

  • Cost-effectiveness and affordability

As they do not need travel, lodging, or other costs related to on-campus instruction, online MBA programs are often less expensive than traditional ones. Since many online MBA schools provide qualifying students with financial aid, scholarships, and grants, you can also reduce tuition costs.

Online MBA courses are ideal if you want to upskill on a tight budget! It is common knowledge that online MBA schools have substantially lower tuition than traditional MBA programs. 

Candidates that enroll in online MBA programs primarily gain the same knowledge as their on-campus counterparts when comparing the two options (classroom and online courses).

  • Career advancement and satisfaction

 You may develop your career after MBA program in several ways. You may improve your CV, highlight your abilities and expertise, and show dedication to lifelong learning. 

As an online MBA program may prepare you for leadership roles in various sectors and industries, it can also help you increase your career prospects. Additionally, you can improve your job satisfaction by pursuing your passions and realizing your potential with an online MBA program.

Online MBA programs feature a large and diversified peer group that frequently comes from different nations worldwide. The blending and mixing of many cultures, intelligent systems, and experiences happen naturally. 

Students have the opportunity to be open to new options and possibilities. You start to think about adopting unconventional ways of thinking when you meet people from all ages, job trajectories, and country backgrounds. On-campus courses hardly ever offer this type of diversity and intercultural exposure.

The Final Words

Your career may be redefined, your horizons can be expanded, and a world of opportunities can be unlocked with the help of the online MBA program. Accept the life-changing path ahead, and watch your career goals come true.

Why then wait? Take the chance, grasp the moment, and let the online MBA program serve as the engine that drives you toward your ideal job. 

Take advantage of Geeta University and Imarticus Learning’s comprehensive course to learn the fundamentals of the fintech industry and gain hands-on experience with cutting-edge technologies like blockchain, artificial intelligence, machine learning, robotic process automation, the internet of things, and big data.

Here’s to the amazing road ahead of you and your limitless success in business. May your time spent doing your Online MBA be nothing short of remarkable.

We wish you luck in the future and all the opportunities an online MBA program may provide!

Technologies in Investment Banking

Posted on by Imarticus Learning

The financial world is undergoing a  major transformation with the constant evolution of new and advanced technology. Fintech has digitalised the world money market and set new standards for the banking industry, foreign exchange, and consumer finance. 

career in Investment Banking

Traditional investment banks have adopted innovative measures of rendering financial services in real time through technological tools. Artificial intelligence has made mergers and transactions more transparent and informative while also reducing the need for transportation for banking purposes.

Modern technology has immensely improved the efficiency of investment bankers and provides an integrated banking experience to consumers and other professionals. In this article, we have given a detailed explanation of the technological tools that are transforming the investment banking industry.

What is Investment banking? 

Investment banking refers to financial institutions which primarily gather large funds for corporations, governments or other finance houses. Investment bankers are finance experts who handle critical activities like financial underwriting, mergers, Initial Public Offering (IPO), trading, brokerage, asset management and debt financing while also providing consultancy on corporate affairs. Investment bankers also assist companies to sort their debt finance by issuing bonds, loans and other debt instruments.

What changes has technology brought to the field of investment banking? 

The recent advancements in technology and online platforms such as Special Purpose Acquisition Companies (SPACs) have changed the face of the banking industry. Modern tools have brought the banking industry from paper to digital screens. Advanced technology such as Artificial intelligence, blockchain and virtual data rooms are used by investment banks to provide remote financial services. Robo-advisors and chatbots priortise personalised banking experience by targeting the specific financial needs of the consumers. Big Data Analytical tools evaluate consumer investments and compare market trends to build a culture of innovation including expert, data-led and agile financial operations.

Technology Trends in investment banking

Advanced trading platforms are one of the primarily used tools by investment bankers. These advanced platforms use machine learning and algorithms to evaluate and analyse data and help get better margins out of the money market.

Artificial Intelligence

The use of AI systems in Investment banking revolutionises the automation and analysation of this sector. AI analyses and processes vast amounts of data quickly and accurately, making it easier for investment bankers to make informed decisions. It also monitors all data at once on a daily basis and identifies the violations quickly. AI’s ability to fast data processing enables better market forecasting which also improves trading strategies. AI automates all the time-consuming processes like reporting, record-keeping and a wide range of regulations.

Direct listing techniques 

Companies that do not wish the involvement of intermediaries in selling their shares opt for a direct listing process. Investment bank function as a platform for small or medium-sized companies or their promoters to sell their shares directly to the public. Also known as Direct Public Offering, DLP is more cost-effective than IPO but has certain safety and volatility risks.

Natural language programming 

NLP enables you to perform multiple tasks such as News sentiment analysis, trade analytics, equity research, risk management, portfolio optimisation and foreign exchange analysis within a significant time period. NLP transfigures raw insights into analytical charts and uses them to design accurate algorithms and analytical charts. Today, NLP has reduced the manual routine work of financial analysts and sped up the process of financial research.

Virtual data rooms 

VDR enables investment bankers and companies to share confidential data & documents while conducting any kind of merger or acquisition. It creates a secure centralised online platform for companies to store and view confidential documents which are accessible to only authorised parties. VRD reduces the risk of data breaches online. 

VRDs are affordable, save time, and enhance the control of authorised parties by providing a safe medium to exchange crucial financial information online.

Blockchain 

Blockchain technology offers an extremely secure and transparent exchange of funds with a minimum cost of exchange. Blockchain provides an anti-money laundering platform by building a decentralised database that is impossible to tamper. This advanced technology of money transfer is a tricky subject to understand and thus has limited usage. Blockchain offers a distributed ledger that diminishes the need for third-party approval for making payments, the information of which is highly secured and can only be accessed by members with permission. 

Initial Public Offerings 

Investment banks function as an intermediary during an IPO process. The investment banks purchase the shares from corporations that are willing to sell their stocks and bonds to the public. The investment banking platforms buy the available share directly from the companies and then sell them to investors on their online distribution platforms. The investment bankers charge somewhere between 3% to 7% per share based on the revenue generated from the IPO.

Openbanking

Third-party platforms such as investment banks gain access to a wide range of financial data of consumers from banks and other financial institutions. The investment banks then use artificial programming interfaces (APIs) use these accounts and transaction data to reshape the banking experience and tailor financial services to meet the specific needs of the consumers. The consumer banks provide information to third-party platforms with the consent of the consumer. 

Sustainable financial products 

Green loans, green bonds, carbon credits, sustainable mortgages and public institutional equity investing, among others, are some of the sustainable financial products. These are initiatives of banks to meet the Sustainable Developments Goals of the United Nations. As consumers are prioritising commitment to environmental issues, investment banks are designing sustainable financial products to meet those requirements.

Conclusion

Artificial Intelligence and other technologically advanced tools have become an important segment of the modern investment banking industry. Traditional banking investors are feeling the need to adapt to the new methods of investment banking. Being a high-value profession, the demand for skilled investment bankers is very high in the money market. 

If you are interested to learn investment banking, you can check out Imarticus Learning’s Certified Investment Banking Operations Professional Course. This investment banking certification course helps you to learn investment banking from recognised alumni and gain industry-specific skills.