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How Much do Scrum Masters make?

Posted on by Imarticus Learning

With the influx of business and artificial intelligence, the world around us has changed. Due to this change, a lot of new roles have come up in the job market. People are coming up with a simpler solution to complex problems using technologies like data analysis and machine learning. However, these technologies are implemented with a proper framework and the companies are advised to adhere to these standards so that a professional atmosphere is maintained.

What is Scrum?

A scrum is a framework with the help of which solutions are developed for complicated and complex problems. These solutions are brought up by a lot of creativity. A Scrum Master ensures that the product delivered through the process serves the purpose and is of the topmost quality. Scrum also ensures effective utilisation of teamwork in coming up with innovative automated solutions. With a scrum master certification, you can understand the technicalities of the field and seek a career in the same. Being a relatively new field, scrum has found its place and a lot of companies are now looking for a scrum master. With proper training, you can easily understand the subject and with a lot of practice, you will be able to master it.

Who is a Scrum Master?

A person who generally develops an algorithm to come up with solutions to complex problems is called a scrum master. They know the implementation of agile methodologies to come with solutions from which a company can benefit. With a scrum master certification, you will understand the roles and responsibilities in a better way. These people are also called the drivers of change as they help the companies in upgrading their solutions concerning the change in the market scenario. These scrum masters are experts in their fields and they have the technical know-how to implement these agile scrum methodologies to bring out a successful solution.
A scrum master has to be good with the work he does. He needs to be aware of different processes and he must know how to work them out. A scrum master takes up the back seat and acts as a backbone in any project implementation. They bridge the gap between the business owners and the product managers and build comprehensive solutions to address different problems. They must have a proper experience of dealing with the tools and technologies as the work involves a lot of technical brainstorming.
He helps businesses in understanding the technical dependency of a particular project and tasks. A good scrum master must be a persuader and should influence people. With a scrum master certification, you can be market-ready for taking up scrum master roles.

How much do scrum masters make?

With automation, the demand for scrum masters has increased but only a few professionals are employable in this field. This factor makes it a very high paying job. In America, a scrum master earns about $100,000-$125,000. This pay is very high as compared to the average pay of the people working in different companies. In India, these scrum masters earn around Rs14,00,000 and can also be paid as high as Rs. 25,00,000. A master’s degree is not mandatory to become a scrum master.
Also, this pay increases with the level of training a person takes. A person with multiple certifications is more likely to earn a higher amount as compared to the base salaries. Companies like IBM pay Rs.16,00,000 per year which makes it a high-end product. Scrum masters are paid quite high and are considered to be one of the highest paying roles of all times. Companies are now moving towards Agile systems and they need someone to drive this change.

How Do I Start a Business Analyst Career?

Posted on by Imarticus Learning

Businesses run differently today. They have evolved to a great extent and are constantly looking out for professional who can sustain these changes and also become drivers of these changes in most cases. Businesses have to analyse a lot of aspects daily and they are constantly looking out for professionals who can help them out with the same.
With automation, times have changed. Everything has moved to an online platform and the things are now worked out from the same perspective. For making sure that all the automated work is carried out smoothly, companies have started hiring business analysts. A business analyst can look after the general affairs of the company. However, a lot of companies hire a business analyst to look after a particular domain and excel in the same.

Who is a Business Analyst?

A Business Analyst bridges the gap between technology and the operations of a business. His primary job is to automate business processes for ease of operations. You can choose a business analyst course from the multiple courses available both online and offline. These analysts play a major role in formulating digital products and offerings of a business.

They are responsible for streamlining processes through the implementation of conclusions drawn out from data analysis. Their job is data-oriented. They have to give out data-driven results. Due to its nature, these results can be quite conclusive as they give out the quantitative aspects of a decision made by the company.

A lot of companies are hiring business analysts due to ongoing automation of all the processes that are carried on inside a company. BAs manage data and are responsible for data-driven results. They use these results to make changes in the existing system. Their main job is to look for automated solutions to all problems.

They work with data regularly. Therefore, it is their responsibility to check the technical feasibility of a plan or a business idea. They have to create new models which would support business decisions. The job of a business analyst is quite result-oriented. They also make use of a lot of online tools. Business analysts are well aware of the technical know-how and also have experience with coding and programming.

A good business analyst must have a sound understanding of regulating businesses and business reporting. He is also expected to be proficient in budgeting, forecasting, analysis etc.

How to Become a Business Analyst

Business Analyst has become a trending role in the job market. Therefore, if you want to become one you must have t6he right skill set and knowledge to excel in the field. You must have a degree in business administration or must be aware of how processes and finance work. A business analyst course will give you a better understanding of the things you can expect to work on.
For becoming a successful analyst, the first step is to educate yourself. Read and understand about businesses and how they work. You can take up a business analyst course and understand the requirements. You can then practice and become certified in a particular field. A certification takes you a long way.
For an analyst learning never stops. Therefore, keep up with your learning and improve continuously. Learn different computer programming languages like R, Python, SaaS, etc. It is also important to be in touch with professionals who are already working in the field. Getting a mentor could also be useful.

Conclusion

You can become a successful business analyst if you constantly strive and achieve what it takes. It is important to keep up with technical skills as well to become a successful business analyst.

Also Read: Business Analyst Career Path

Functions of Accounting

Posted on by Imarticus Learning

A lot of transactions take place daily in all kinds of businesses. Therefore, it is really important to keep a tab on all of these exchanges and transactions. This makes recording and keeping a track of transactions important. Accounting helps in keeping a tap on all of these transactions.

What is Accounting?

Accounting is a comprehensive process of recording transactions that goes on in a business. Accounting is done by all kinds of businesses: be it a large company or a person running a small store in his colony. It is primarily concerned with keeping a record of all the transactions but it serves various other purposes too.

It includes analyzing, summarising, and classifying the information recorded in the form of different types of transactions. Accounting process can be done both online and offline. Keeping a tract of transactions by maintain a register and writing things down is a conventional way of doing things. A lot of companies have now switched to an online system of accounting which is much more convenient and easier to use. A lot of software like Tally, Oracle, SAP, etc. are now dominating the market and have made accounting process a cakewalk. To become an accounting professional, you can take up an accounting course which will give you a better understanding of how things work.
An accountant has to prepare different financial statements. These financial statements form the basis of a lot of major and minor business decisions. These financial statements include income and expense statements, cash flow statements, Profit and Loss account, balance sheet etc. Documents like balance sheet are very important as they give you a picture of your financial standing at the end of the year specifying the value of assets you hold and the liabilities you owe. You can enrol in an accounting course to understand all of this in a better way.

What are the functions of accounting?

Accounting plays a major role in all kinds of businesses. It has different functions:

  1. Accounting serves as a basis of financial planning: All the statements prepared by an accountant give you an understanding of your financial position. You also get to know about the profits earned and losses incurred from these statements. Therefore, with the help of this information, you take different business decisions. In the case of profits, you formulate ways to utilise it and reinvest in your business. In case of a loss, you find ways to get back on track
  2. Prepare budgets: Accounting acts as a base for budget formulation. Budgets are made in line with the accounting statements. These statements give an overview of the sources of income and the areas of expenses. These can be helpful while you are planning or preparing a budget for your company.
  3. Controlling cost: With the regular recording of transactions, you can keep your costs in check. You can avoid wasteful expenditures and spend money wisely keeping these statements in your mind.
  4. Prevents errors and frauds: A lot of things might not come in your radar or slip off your mind in case you are not recording all the transactions. Therefore, accounting is important. With accounting, you can eliminate the errors which can be caused due to negligence or forgetting of transactions. Also, if you keep a record of all the transactions, you can easily detect any fraud which is going around in the business.

Accounting serves a lot of other purposes like evaluating the performance of the company, providing data of past performances for performance evaluation, etc. With an accounting course, you will be in a position to understand all of this better. You can build up the required skills and become a successful accountant.

The Best Online Fintech and Blockchain Courses to Take in 2020

Posted on by Imarticus Learning

You been searching for the best Fintech course or the best Blockchain course online? Are you unable to find an interesting course that covers the fundamental concepts and at the same time, offer interesting placement opportunities? Then breathe a sigh of relief, you are at the right place! We are going to discuss the best courses among the two – Fintech and Blockchain. Fintech and blockchain are two popular interrelated concepts that offer lucrative career opportunities. The recent incidence of COVID-19 and its impact on the employment landscape has positively impacted Fintech. The fintech companies are now more willing to consider remote working as Have an option to reach out to new talent pool located miles away from them. This adds more employment opportunities in these domains and thus, more scope to fintech and blockchain courses. Imarticus has an exciting course to offer in Fintech and Blockchain. Let’s discuss that.

PRODEGREE Professional Certification in FinTech (Created in association with Barclays Mumbai)

Designed in association with Barclays Mumbai, this125-hour-long Prodegree Fintech course takes you to a world of opportunities. This is the best Blockchain course as far as the best content and training are concerned. Industry-relevant curriculum and placement partners make this a gamechanger for every learner. The learning process is designed through relevant case studies and capstone projects along with opportunities to interact with Fintech entrepreneurs and industry leaders.

How Good a Fintech Course is This?

• You will learn job-relevant skills like blockchain, ML, robotics and advanced analytics through projects – both industry projects and in-class projects
• You will be certified by Barclays Rise Mumbai initiative. Getting endorsed by a Fintech market leader will give you a competitive edge in the job market.
• You will receive an unparalleled learning experience through live instructions in a state-of-the-art virtual learning space.
How Good a Blockchain Course is This?
This course offers detailed training in blockchain. You will receive in-class training as well as industry training that will help you build blockchain skills. Three weeks blockchain deep dive is a major highlight of this program. You will learn both theory and practical during this session. By the end of the semester, you will master the basics of blockchain technology. You will know the practical application of blockchain-based systems across industries by mastering the development of blockchain framework and implementations. You will get to learn about Ethereum smart contacts, cryptocurrencies, advance concepts and implementations.
Benefits of this Course
• A globally recognized certification with an industry-oriented curriculum with the latest trends and best practices in fintech space.
• You will receive live training from fintech experts from Rise Mumbai and Imarticus.
• You will be getting an incredible opportunity to develop a business framework and to pitch your business idea. If qualified, you will be mentored by an expert.
• Identify areas and use cases for implementation and develop a framework and business model.

Prospective Job Roles
• Cybersecurity analyst
• Compliance expert
• Design thinking specialist
• Design thinking training provider
• Process automation lead development
• Robotic process automation project manager
• Bitcoin blockchain developer
• Bitcoin mining associate
• Process automation lead development
Placement Partners
• Reliance Capital
• Religare
• Axis Bank
• Bajaj Finserve
• Bank Bazar
• Bank of Baroda
• Larzen and Toubro
• Muthoot Finance
• ICICI Bank
• HDFC Bank
• Policy Bazaar
• Edel Weiss

Conclusion
Professional Certification in FinTech is the best course if you aspire a career in blockchain or fintech. The best part is that this is designed in association with Barclays Mumbai. 125-long-hours of rigorous training from this Imarticus will help you land on your dream job. You have access to an amazing alumni network and wonderful placement programme to help you with this.

How Do You Become a Fintech Professional?

Posted on by Imarticus Learning

Finance has emerged as a strong field in recent times. Due to the growing needs of handling and managing finances, it has become this giant which is taking the world with a huge storm. Fintech is one such field which has emerged as one of the major drivers of this change. Fintech is a common term which is interchangeably used for Financial Technology.
Technology has touched our lives in ways one could have never imagined. It has impacted all sectors like automobiles, insurance, healthcare, etc. The finance sector has not been left untouched. Technology has brought about some very important and required changes in the field of finance. And this integration of finance with technology is referred to as Fintech.

What is Fintech?

Fintech is the application of technology in the field of finance. Technology has brought about some significant positive changes in finance and has also automated a lot of financial services eliminating the cumbersome physical transactions which are exhausting and confusing at the same time. With Fintech, the finance sector has been brought under a synchronised and well-managed system. Fintech has found its use in all companies which are looking forward to optimising their finances.

It makes use of different financial software to optimise and consolidate financial processes. It has also made the management and working of the stock market much simpler and hassle-free. It is being increasingly used to serve customers faster and better. With Fintech, managing different kinds of financial risks has also become quite easy. Fintech has now found its use in industries like education, retail, banking, food and beverages, etc. It has also been the backbone of the emerging modes of currencies like cryptocurrency. These inventions have been made possible with the help of fintech.

Due to the ongoing shift of operations from an offline mode to an online mode, Fintech has become popular. You can opt-in for a fintech course to understand the complexities of the subject in a better way. It has also found its use in the way money is being handled. It has streamlined a lot of processes and has made online payments a dream come true. With the use of this financial technology, you can easily transfer money from one account to another, make different payments online and do several other things with ease.

How to become a Fintech professional?

To become a successful fintech professional, you must know the subject matter. Fintech requires you to understand the technicalities of finance. Also, it needs you to be technology-oriented i.e. you must know the basics of information technology and understand how to put it to use. A fintech course might help your cause. Even if you know about the field, a fintech course will strengthen your expertise in the field. There is a huge demand for professionals who have in-depth knowledge of fintech and its application.
To become market-ready, you need to lay your hands on these techniques. To become an expert in this field, you must have a degree in financial management. Also, you must have a certificate in managing computer systems. An ideal fintech candidate is a blockchain expert and he knows how to work these things around. He must have sufficient knowledge about distributed and electronic ledgers as a lot of companies are demanding these skills from professionals right now.
He must also understand basic programming, machine learning and artificial intelligence.

Conclusion
With proper training and guidance, anyone can become a fintech expert. Along with the technical skills, the professional must have the soft skills required to excel in the field.

What is Credit Analysis Process?

Posted on by Imarticus Learning

The credit analysis process is all about evaluating the credit risk of borrowers to determine their eligibility for loans and other credit facilities. Before jumping into the details of the credit analysis process, let’s understand the meaning of credit risk to have a comprehensive understanding of how the credit analysis process works.

Understanding Credit Risk

Credit risk can be simply understood as the risk of default by a borrower on his loan repayments. It is the risk of loss that will result if the borrowing party fails to meet its contractual obligation. If the borrower is unable to repay the money during a specified period, he can be categorized as a credit risk. Traditionally credit risk amounts included the principal and interest amount due on the loan taken by the borrower.

Credit risks can lead to heavy losses and decreased cash flow for banks and financial institutions whose major source of income is the interest amount earned on loaned out funds. To reduce the proportion of high-risk borrowers most banks and financial institutions charge a higher interest rate on the amount lent to the borrowers. This deters the borrowers who have no intent to repay the loan or who might not have sufficient earning to repay the borrowed funds.

Credit Analysis Process

Lending money to high credit risk borrowers can result in lower revenue and cash flow for banks or other lending institutions. To mitigate the credit risk from borrowers who might not repay the loans, the banks have a credit analysis process in place to evaluate the financial standing of the borrower and check whether they meet the criteria specified by the banks or other lending institutions.

The credit analysis process is all about evaluating and assessing the loan request of the borrowing party to determine whether they have a good cash flow to service their loan payments promptly. It helps to determine the creditworthiness of the borrower based on their historical financial track record and also identify the level of credit risk associated with loaning the money to the borrowers.

Now to evaluate the creditworthiness, the lending parties have various credit analysis techniques that will help to find out the facts. Some of the most prominent credit analysis techniques include ratio analysis, risk analysis, cash flow analysis, trend analysis, financial projections, etc. This technique helps to effectively evaluate the amount of loss that will occur in case the borrowers default on their loan payments. Primarily the credit risk analysis process is distributed in three stages.

These stages include the following.

Information gathering

In this stage of analysis, the lender intends to collect as much historical financial data available on the borrower as possible. Different factors are evaluated to assess the credit history of the borrower; this includes repayment track of the borrower, financial solvency, cash flow, personal or organizational reputation, etc. In addition to this, other information such as purpose and feasibility of the loan is also collected to have a comprehensive understanding.

Data Analysis

This stage deals with assessing the relevancy and accuracy of information gathered in the initial stage. It is carried out to detect any anomalies of false presentation of information by the borrower. All relevant documents are also analyzed to detect any fraudulent practices. Important financial statements of the borrower such as balance sheet, profit and loss statement, cash flow statement, etc. are also analyzed to evaluate the ability of the borrower. The purpose and relevancy of the project being undertaken are also analyzed to compute the feasibility.

Approval or Rejection of the Loan

The last and final stage is all about decision making. A decision is taken by the lending party based on all the information collected and analyzed as to whether it will be profitable to loan out the money to the borrower. If the credit risk limit is acceptable by the lending party standards, the loan is granted to the borrower or else it is simply rejected.

Also Read: What is Credit Risk Analysis & Why It is Important

How Can Data Analytics Improve Remote Learning?

Posted on by Imarticus Learning

Introduction

Data Analytics has transformed how we work today. It has brought in the automation we need. Big Data has found a lot of use in Industries like Healthcare, Finance, Retail, Real Estate, etc. It has made analysis and crunching of data a cakewalk. Earlier, analyzing and sorting information from data sets was a cumbersome task.

It required a lot of people and long working hours to analyse and extract information from those data sets. This got complicated as the amount of data increased and due to an increase in the number of data sets, the results were prone to errors.

Big data transformed and brought in a wave in the process with which companies handle data sets and data. Big Data and Data Analytics have not left any stone unturned.

They have even brought about a significant change in the education sector. It has become a hot career option and you can take up an online or an offline Big Data Analytics course to become a part of this transformation.

Data Analytics is creating new learning opportunities daily. It is now transforming the way students’ study and teachers teach. Data Analytics has elbowed its way to the pedagogy and is now setting up a new definition of how people study.

Remote Learning

Remote learning is the online way of studying where technology becomes the source or medium of knowledge exchange. Remote learning eliminates the use of traditional classrooms removing the barriers of place and time. The Internet has become an essential and Remote Learning is making the best use of it.

Big Data Analytics CourseRemote learning is now been done through a lot of platforms and mediums such as Video conferences, online tasks and assessments, discussion boards, webinars, etc. These platforms allow free flow of information and are equipped with all kinds of features like screen sharing, system control sharing, whiteboards, annotations etc. Remote learning is a new way of learning.

Remote learning generally translates to the face to face mode of studying using technological resources. You can initiate or have access to remote learning from the convenience of your homes.

Data Analytics and Remote Learning

Data Analytics has transformed the education industry. With a lot of data present, one can easily assess the demand for education and tap those markets. Big Data has made it possible for the education industry to move online.

A Data Analytics online training programme would give you insights on how things are working. Also, during a pandemic, the educators and school have easily moved to an online mode with the help of Big Data. With Data Analytics, the teachers can easily keep a tab on the performance of all the students. This would make use of different parameters to show conclusive results.

With Data Analytics, access to information has become easy. Also, the education system has been handled with a systematic approach and all the elements have now been automated.

These practices are now being standardised by trying different strategies and understanding what exactly would work in case of Remote Learning. Also, data analytics make learning safe.

Data Analytics make sure that the adoption of the system is done easily and also the students stay engaged. With data analytics, a lot of applications have been developed with simple and understandable user interface keeping in mind the demographics of the audience. Also, these applications take care of the safety of the student who is accessing remote learning resources.

Using Data Analytics, you can keep a tap on the activities of the students and how they are performing in class. It also manages attendance records, class files, etc with ease.

Conclusion

Big Data has brought about significant changes in the way students learn. With a little more up-gradation, Big Data will now drive this new model of education.

In The Face Of Job Uncertainty, Can A Career In Big Data Protect You?

Posted on by Imarticus Learning

Big data involves extracting, analyzing and processing vast amounts of data using different techniques. With electronic apps proliferating through sectors and geographies, data is generated from various sources every day, everywhere, by everyone.

While big data entails sifting through unstructured data in multiple formats, the insights derived from these data dumps are invaluable to business or societal goals. Detailed knowledge of the business, through big data, will build greater efficiencies and give them an advantage over rivals in a data-driven environment.

The importance of big data has come further into light during the novel corona virus pandemic. Although the world is far away from a cure, the use of big data has allowed organisations and governments to manage the crisis, mitigate the impact as far as possible and maintain lock downs at a national level.

That said, healthcare is not the only sector that benefits from big data. Nearly every industry known to humans today can derive actionable benefits from big data, should they use it to its maximum potential.

The burning question, then, is if a big data career can keep you safe from job cuts, layoffs and furloughs. It just might, for the following reasons:

Big Data CareerA Shortage of Big Data Talent

Although there are many complexities involved in incorporating data-driven perspectives into traditional business practices, recruiting the best talent has become a consistent frustration across industries. Both as a result of this and as a precursor to this, companies have been failing to realise the full potential of big data and have been able to extract only a limited amount of insights.

A Breadth of Possibilities

Companies and industries are only just realizing the potential of big data across the board. Therefore, there is a myriad of paths to explore within the field in the coming year. This makes today an opportune time for those in looking to kickstart a big data career. Companies will be on the lookout for those with solid core competencies as well as a willingness to learn and experiment. Much of big data’s capabilities are hitherto undiscovered; big data analysts and scientists can help industries derive as much value as possible.

Evolving Technologies and Software

Technology continues to change and transform, which means new sources of data are being added into the mix. For traditionalists, this amount of data can look daunting and be misconstrued as useless. However, big data professionals can interpret these data dumps, extract value and engage in data storytelling such that big data drives business goals from the get-go. Additionally, new software is being introduced to handle niche requirements; a big data analyst or scientist with some experience in this will prove to be invaluable to a company exploring big data possibilities.

A Surge in Big Data Courses

If the number of enrollment in big data and related courses are anything to go by, then it is safe to say that interest in big data is only increasing by the day. A good big data analytics course, however, doesn’t stop just there.

It also delves into machine learning, Artificial Intelligence and Natural Language Processing because all of these are intrinsic to the process of deriving actionable insights. Any big data analyst worth their salt will strengthen their competencies in these fields first and then apply theory into practice.

Conclusion

A great way to get your foot in the door and strengthen your skillset is to enrol for a big data analytics course. While the job market seems to be bleak the face of a potential recession, you can offset some amount of impact if you’re pursuing a career in big data. It’s most likely to rebound from this depression and create meaning out of the noise even in difficult times.

Why An Unstable Job Market Has Increased Demand For Online Learning?

Posted on by Imarticus Learning

There has been an unprecedented rise in the number of lay-offs, furloughs and companies shutting down over the last few months. Job uncertainty, a bitter pill to swallow, has affected lakhs across the board, regardless of where they stand on the corporate ladder.

In the wake of this phenomenon, working professionals have turned to online courses to upskill themselves and stay ahead of the curve. So have recent and fresh graduates, who find themselves facing an upturned job market with all doors effectively barred for all but the best of the lot.

Analyses have found that the fields of artificial intelligence, data science and machine learning have been most sought out when it comes to online courses of varying lengths.

Data science Online CourseIf you’re looking to get trained online in the same fields, you’re in the right place. If you’re still on the fence about online courses in general, here is a comprehensive list of benefits that you can expect to reap:

Flexibility in the time and place of learning

You get more flexibility in studying online. You can study more easily around your existing work schedule (and your hobbies). This benefit is much better felt when you’re taking a class that allows you to learn and do assignments at your own pace. You can also choose your preferred work environment as well as use your own technology to furnish your learning as you see fit. The only prerequisites to online learning are a stable internet connection and laptop, computer or smartphone that you can attend your courses on.

Lower costs

For fresh graduates and new professionals, it can be difficult to justify dropping thousands on yet another college course or diploma. However, choosing online courses reduces costs by a significant level. You might need to pay fixed costs– such as tuition fees and book purchases– but you’ll find that the costs of travel, transport and additional day-to-day expenses reduce significantly. This is especially beneficial if you’ve got your eye on a course from an international university but haven’t been able to justify the costs of accommodation, stay and visas.

A wider range of courses

Opting for online courses gives you a more comprehensive range of topics and industries to choose from. Additionally, online learning has made courses from international universities and institutions available to those in virtually any country. By making education globally accessible, online learning significantly raises the scope of curriculums as well as the standards of teaching.

An overarching benefit of this wide range is also that graduates and professionals are able to connect with industry experts in other countries, especially if the country they’re from does not currently have the resources or the demand for such niche courses.

Building specializations

Traditional education systems often work to teach the basics of a domain or topic; however, not many offer specializations that are both useful and affordable. This gap is one that online learning can fill. Professionals and graduates can fill gaps in their skill set or pursue an education in a niche topic through online courses. This is especially useful for professionals who have sound core competencies and are ready for a higher level of analyses or research. This is also beneficial for anyone who wasn’t able to pursue a topic out of pure passion; it allows hobbies and personal interests to be catered to without the risk of jeopardising your existing career.

Conclusion

Whether its working professionals looking to invest their time in bettering their skillset, fresh graduates hoping to add a little extra to their resume or individuals finally getting around to learning what they’re passionate about, more and more people are turning to online courses to upskill and supplement their existing knowledge.

What do Investment Bankers Really Do?

Posted on by Imarticus Learning

Investing banking division is a specialized segment in the banking and finance industry that primarily focuses on raising funds for companies by connecting them with investors.

The investment banking field has shown exponential growth in the last few decades as we progress towards a more globalized world where funds can be free transferred between economies of different nations. The role of investment bankers is also very crucial as a lot depends on the performance of investment banks.

So what do investment bankers really do? The role of an investment banker is very dynamic and encompasses a range of activities such as helping clients to raise money, analyzing the market, networking with prospects, financial analysis, financial advisory, etc.

Let’s understand this more contextually by analyzing the functions of investment banks and how they add value to the economy’s growth prospects.

Investment banks as underwriters

Investment banks provide underwriting services to companies who are about to go public with their Initial Public Offer. Underwriting can be explained as a process in which an individual or institution takes a certain financial risk for a premium or fee. The risk element might include loans, insurance or investments. Now, before taking such risk the modern-day investment banks conduct thorough research to find out the degree of risk associated with a particular deal.

This extensive research will help to set an optimum premium amount on the financial transactions. In case of investment banks working as underwriters, they are required to raise the capital amount for their clients from investors by issuing either debt or equity securities. There are three types of underwriting commitments provided by investment banks to their client these includes firm commitment, best efforts, all or none. Let’s explore this in details.

• Firm Commitment
In case of a firm commitment underwriting service, the underwriter has the full responsibility to buy the entire stock issue at a fixed price decided in advance based on the research. Even if the underwriter fails to sell the entire issue they have a legal obligation to accept the deal.

• Best Efforts
In case of best efforts, the underwriter commits to sell as much of the issue as he can but without any legal financial obligation. This means that if the stock issued is not fully subscribed by the public then the investment bank will not have a legal obligation to pay for the unsubscribed shares to its client.

• All or None
This is a very special case of underwriting where the deal stands canceled if all the stocks issued are not sold out. If the stocks are not sold to the buyers are the predetermined price then the underwriter will not receive any form of compensation for their services.

Mergers & Acquisition services
Investment bankers play a significant role in facilitating mergers and acquisition deals between two or more companies. The investment bankers play a crucial role by determining the fair price or value of companies involved in the M&A deals. This requires conducting extensive research, studying the industry and competitors, identifying the financial position of the company, and a lot more.

A strategic plan is needed by organizations who want to acquire or merge with companies in the same domain. This is where investment banks come into the picture and add value by leveraging their network and professional expertise to find out potential target companies.

In addition to this, the investment bankers also guide their clients involved in the deal on how to finance the M&A deals. They study and design a suitable capital structure for their clients and also guide on financing methods to maximize profitability without diluting ownership.

Also Read: Prerequisites For Becoming an Investment Banker

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