Gain Expert Insights & Discover Bespoke Solutions for your Investment Banking Operations Needs

Posted on September 9, 2021March 22, 2024 by Imarticus Learning

Reading Time: 3 minutes

The global investment banking industry is experiencing a boom, which means that the demand for skilled professionals has never been higher. Investment banking is a fast-paced, demanding job where you’ll be working with highly knowledgeable individuals. You will need to have the right skills and knowledge of the industry to succeed in this field, making it an excellent career choice for anyone who wants to work in finance.

With so many new opportunities opening up every year, now is the perfect time to start building your professional network and getting ahead on your plans for a successful career.

This blog post will provide you with insights into gaining expert knowledge to land your dream job as an investment banker!

Why Should Investment Banking be your Career Choice?

The investment banking industry has seen a boom in the last decade. The world is moving towards digitization, and so are all industries along with it. Investment banks deal in stocks, bonds on both the macroeconomic level of the country and the microeconomic level of a company. All transactions between two companies or even countries need an intermediary to ensure a smooth process that ensures better growth for the economy and trade relations between countries/companies etc.

This role can be fulfilled by only an investment bank with proper research resources for analysis at its disposal. They use these insights to advise clients accordingly, ensuring the best decisions leading to maximum returns from the said transaction(s). This ever-growing demand for executives within this field has led many professionals across various sectors to change careers and join investment banks.

This is the perfect time for you to grab this opportunity as an Investment Banker, especially with so many openings in various fields like equity research analyst, corporate finance associate, or mergers & acquisitions banker, etc. While working your way up through each hierarchy of different job profiles, there is no dearth of opportunities waiting for you.

Key Skills required for Investment Banking Job

Analytical skills: A banking job requires a lot of number crunching. You need to make sense out of volumes and tonnes of data, analyze it within no time, sift through important information and facts from the irrelevant ones ensuring that you provide actionable insights.

Communication skills: Investment banking professionals are required to write reports for their clients in order to provide them with valuable insights and help them in decision-making.

Attention to details: Investment banking requires a lot of focus on minute and important tasks because the smallest error can lead to millions of dollars in losses for your company.

Networking: Investment banking is all about building relationships, you can have the best ideas, but if you don’t know who to sell it to or introduce your client’s needs and services into the system, then no one will ever come across them. It’s all about knowing who to talk to and how.

Problem-solving skills: Investment banking professionals are expected to have good problem-solving skills as they need them regularly to produce accurate reports, analyze data, assess client requirements, etc.

Start a Lucrative Investment Banking with Imarticus Learning

Imarticus Learning Institute offers an investment banking course that imparts knowledge, skills & techniques which are necessary to succeed in today’s competitive financial world. This comprehensive training program is designed by industry experts who have years of experience and exposure in the field.

If you’re looking forward to jumping start your investment banking careers with exciting job opportunities, then Imarticus Learning’s course is your best place to start!

For more insight, connect with us through the Live Chat Support system or visit any of our training centers based in – Chennai, Mumbai, Thane, Pune, Bengaluru, Hyderabad, Delhi, and Gurgaon.

Entrepreneurial Finance & Investment Decisions in Seed-Stage Ventures: An Overview

Posted on September 3, 2021September 4, 2021 by Imarticus Learning

Reading Time: 2 minutes

Startups and Typical Funding Path

There are many ways to finance a new startup, and finance is one of the most important aspects to consider when launching a business. There are several sources of finance available for startup ventures, which include public finance, private equity finance, venture capital finance, and self-funding (called bootstrapping).

Public finance is very broad in scope and typically includes funds raised by companies from government agencies or government programs designed specifically for entrepreneurial purposes.

Much of this activity takes place at the local level, where city governments work with entrepreneurs through various programs to help launch new businesses within their communities. These programs can vary widely from location to location; however, they generally offer technical assistance on all stages of company creation as well as financial support such as low loans or seed money grants.

What is Seed Financing?

Seed financing (also known as seed money, or seed funding) is the first stage of a startup’s capital-raising process. Seed financing is a form of equity-based finance. In other words, investors give money in exchange for an ownership stake in a firm. This is generally done in a looser formal setting when compared to other types of equity-based capital investment.

How is Seed Capital Used?

Seed capital is typically used to cover the company’s initial operations. Proceeds from seed financing might be spent on market research or early-stage product development (e.g., the formation of a prototype), as well as on essential operating expenditures such as legal fees.

The majority of the funding comes from family, friends, and angel investors. Angel investors are the most important participants in seed investment since they might supply a large quantity of money.

Seed Financing as an Investment Vehicle

The riskiest type of investment is seed financing. It entails putting money into a firm that has just begun to generate revenue or profits. Venture capitalists and banks, for example, typically avoid seed financing because of these reasons.

Seed investment, on the other hand, is one of the most complicated types of financing. This is due to a lack of information on the part of a potential investor. Because it’s crucial for determining whether or not your company has a viable concept and strong management that can implement it, you’ll have to do some research yourself.

The executive’s soft skills, as well as the company’s management abilities, also have an impact. Management expertise isn’t always crucial, however. Many internet giants like Facebook and Google were created by people with virtually no prior business administration experience.

Looking for finance courses with placement?

MBA in investment banking and equity research can skyrocket your career! Join Imarticus’ exclusive program in association with JAIN University and up-level your career in finance in no time.

What are the Features & Benefits of Security Lending & Borrowing?

Posted on September 3, 2021March 22, 2024 by Imarticus Learning

Reading Time: 3 minutes

Securities Lending and Borrowing is a system that allows investors to borrow and lend shares to other market players. For many reasons, the platform is a potential alternative to the derivatives market. Short-sellers are the most common SLB borrowers. On the other hand, Lenders are investors who purchased shares for the long term and have them sitting dormant in their demat accounts.

In most jurisdictions, securities lending and borrowing is an OTC (over-the-counter) commodity where custodians allow borrowing and lending transactions between institutions. SLB, on the other hand, is an exchange-traded product in India.

SLB Features

Clearing Corporations guarantee transactions in the SLB section and hence do not include any counter-party risk.
Contracts with durations ranging from one month to twelve months are available.
Turnover fees from the STT and SEBI are not applicable.
The market value of the equities determines the loan amount pledged as security.
This SLB allows retail and institutional investors to lend and borrow assets.
The securities can be lent by investors who have Ideal Shares in their demat account.
This approach allows investors or traders who have short-sold stocks to borrow the securities.
National Securities Clearing Corporation Limited ensures that stocks are delivered after the rental period has ended. As a result, there is no chance of the stock being lost.
When the borrower returns the stock, any dividends, stock splits, or bonus shares are paid to the lender of the securities.

Benefits

Both the lender and the borrower benefit from SLB.

For Lender

SLB delivers an extra return on an idle portfolio for Lenders. So, if you have 1000 shares of xyz that you intend to own for a long time, you can lend them out anytime there is a demand. Where NSCCL is the guarantor, the lender receives loan fees.

The potential to make additional money through the fee charged to the borrower to borrow the security is one of the benefits of securities lending from the lender’s perspective. It could also be considered as a way to broaden one’s horizons.

For Borrower

From the borrower’s perspective, it permits them to engage in activities such as short selling. It also provides investors with more perspectives on the market. As previously said, it aids in the increase of liquidity in the market as a whole. As the difference between the bid and the ask narrows, increased market liquidity tends to tighten spreads, which is favorable to all market players.

A borrower is most likely interested in one of the following opportunities: stock price between two exchanges, reverse arbitrage when futures are at a discount to stock, covering short positions to avoid settlement failure, mispricing in options, and other hedging strategies, SLB could be used to borrow stocks from a lender for a fee.

Become an Investment Advisor

Investment advisors provide advice on a wide range of trade finance topics, including retirement planning, insurance alternatives, and investment techniques. To work as an investment advisor in India, you’ll need a degree in finance or banking as well as a SEBI certificate of registration.

MBA program by Imarticus

A diploma in banking and finance is Designed Specifically for Future Investors. Your ultimate doorway to New Age Investment Banking and Finance.

Imarticus collaborated with the acclaimed JAIN Online to improve its rigorous diploma in banking and finance, covering every paradigm of New Age Banking Operations

The program is designed to give you in-depth exposure to essential parts of the trade finance Investment Banking sector,

Such as Master Accounting, Financial Analysis, Principles of Economics and Markets, Investment Banking Operations, and more.

Emerging Worldwide Market Trends and Events with in-depth Financial Analysis in Investment Banking Operations!

Posted on September 1, 2021March 22, 2024 by Imarticus Learning

Reading Time: 3 minutes

Financial analytics is an operational function of financial services and financial markets that uses various mathematical, statistical, economic, and financial models to forecast the financial position of individuals and corporations.

Financial analytics professionals provide clients with financial forecasts for multiple purposes, such as investment banking operations. For those wondering “why investment banking,” this blog explores the latest global trends in Investment Banking Operations, making the field apt to explore opportunities.

The global investment banking market is segmented:

By Type: Financial Sponsor/Syndicated Loans, Mergers & Acquisitions Advisory, Debt Capital Markets Underwriting, Equity Capital Markets Underwriting
By Enterprise Size: Small, Medium and Large Enterprises
By End-Use Industry: Financial Services, Retail & Wholesale, Information Technology, Manufacturing, Healthcare, Construction, Others

Emerging global market trends in Investment Banking Operations:

High-frequency trading

Research indicates that the global high-frequency trading market will nail a bullish growth from 2020-2026. HFT platforms use complex algorithms, analyze needs, and spot emerging trends in a fraction of a second. The investment firms implementing HFT can expect high favorable returns on trades, giving a more systematic approach to active trading.

Virtual IPOs

Lockdowns accelerated the demand for remote connections & transactions. The pandemic has forced companies to opt for virtual IPO. Automation of the process during pandemic decreased the time to 50 percent.

Digital technologies

The COVID-19 pandemic pressed for digital transformation, i.e., consolidation & automation of mid-and back-offices. Some digital technologies redefined recently include:

Robotic Process Automation (RPA) for budgeted operations
Mobile payment methods
Cyber hygiene
Use of AI & smart technologies
Investments in the hybrid cloud from popular service providers
Confidential computing for data & communication privacy
Automation of data distribution with big data analytics & real-time reporting
Monitoring & tracking compliance & regulations
Increased security with blockchain technology

Scope of Career in Investment banking with the shifting trends

With the advancement of investment banking with recent financial analysis trends, job redesign is the next step. Organizations ensure that they build a talent pipeline that understands regulations, new technologies, risks, and new changes. Since this job profile demands face-to-face client servicing, the nature of jobs is also changing.

IB professionals need to upskill & augment their understanding of technology. It is crucial to keep yourself updated in the domain through recent investment banking certifications and primary courses in trending technologies and explore financial, technical, & interpersonal skills to stay above the mark.

Grow and Explore with Imarticus Learning:

The Certified Investment Banking Operations Professional course fully equips you with the skill-sets required to begin a career in investment banking operations, treasury & clearing services.

Upon completing the CIBOP course and related assignments, students receive an industry-recognized, internationally accredited Certificate of Excellence. Additionally, they can also take up the CISI certification (CISI IOC) exam.

Apart from access to the placement portal, all available leads & references from networks, students also get up to five assured interviews with leading firms in the banking & finance sector with the Imarticus Learning placement assurance program.

The CIBOP program stands out in expertise with relevance to the investment banking industry.

It is a valuable pathway to gain industry-relevant domain knowledge and get placed in a leading global bank.

Contact us through the Live Chat Support system or visit training centers in Mumbai, Thane, Pune, Chennai, Bengaluru, Hyderabad, Delhi, and Gurgaon.

Fascinating Insights into the Investment Banking Industry!

Posted on August 30, 2021April 5, 2024 by Imarticus Learning

Reading Time: 3 minutes

The world of investment banking has undergone a huge transformation in the last decade. Gone are the days when investment bankers were professionals who worked for one or two banks and made multi-million dollar deals. In today’s time, this is a highly competitive industry with many more people vying for lucrative positions. In fact, there was an increase in demand by 66% in the last decade, as Bloomberg reported.

The boom in this sector has resulted from increased demand for investment bankers, and it’s not slowing down anytime soon. This article will discuss some of the fascinating insights Into how investment banking works, what an investment banker does, and how to start a successful career as an investment banker.

How does investment banking work?

Investment banking is a lucrative profession as it involves various stages of the financial sector. An investment banker offers its services to organizations and individuals in need of funds for their business, such as startup companies or international conglomerates with projects that require large sums of money.

Investment bankers are often involved in raising capital either through an IPO (initial public offering) or via private placements along with many other activities like mergers and acquisitions. They also provide advice on corporate strategy, securities offerings, etc., based on their current knowledge about domestic markets.

Key insights into the boom in the investment banking industry

– The investment banking industry is experiencing a boom as the demand for bankers has increased. As of now, there are more than 250 new jobs available in this sector, and banks like Goldman Sachs have advertised 130 positions ranging from analysts to associate-level managers. Investment Bankers earn average salaries that range from $69k-$200k depending on their rank

– A graduate degree can help you stand out when applying for these jobs—students who hold master’s degrees or higher make up almost 40% of all newly hired investment bankers each year. Graduates with MBA degrees get paid an average salary of over $100K per annum. Graduates who have a bachelor’s degree earn about $70K per annum.

– The demand for investment bankers has risen because of the changing market dynamics and global climate that is forcing more investors to hedge against riskier assets like stocks or commodities. This increase in investments requires banks to expand their operations. Hence there are increasing numbers of new jobs being created all over the world

What does an investment banker do?

Investment bankers are financial professionals who work to provide advice on raising capital for businesses. They are typically employed by large banks or other companies, although they may be self-employed if working in the private sector.

There are various types of jobs within the industry – an analyst will research potential markets before making recommendations, a trader will attempt to buy and sell stocks at the most profitable rates, while investment bankers often work with clients on mergers and acquisitions before concluding transactions.

Investment banking courses provide students with an in-depth understanding of these specific roles to select one that best suits their skill set.

Have a lucrative investment banking career with Imarticus Learning

Imarticus Learning Institute offers a variety of certification courses to help you succeed in your investment banking career. These Investment Banking Courses are designed for beginners, intermediates, and seasoned professionals who want to learn the latest industry trends or brush up on their skills. The courses are taught by expert instructors with decades of experience in the industry.

Fast-track your career into the investment banking industry through Imarticus Learning’s expert network & become an investment banking expert!

For more insight, get in touch with us through the Live Chat Support system or visit our training centers based in – Mumbai, Thane, Pune, Chennai, Bengaluru, Hyderabad, Delhi, Gurgaon, and Ahmedabad.

Financial Analysis Data Tips for Beginners

Posted on August 26, 2021March 22, 2024 by Imarticus Learning

Reading Time: 3 minutes

Financial analytics involves the process of evaluating a company’s financial data to assess its performance and recommend improved ways of moving forward. Today’s business environment is more competitive than ever. While finance forms a critical part of every business, companies need more than basic financial statements and reports.

They need progressive, predictive, and actionable insights that can help mould future business strategies and improve routine decision-making processes.

The sheer ability of financial analytics to address critical business problems has led to an acute demand for skilled Financial Analysts and courses for Financial Analysts.

So, here’s a beginners’ guide on financial analysis and where you can find the best Financial Analyst course.

Types of Financial Analysis

Out of the several financial analysis types, we’ll briefly talk about the three most important ones:

Horizontal Analysis

Horizontal analysis helps an analyst identify important trends and determine whether the company is growing or facing decline. It is done by taking financial data of a specific period and comparing them to calculate the growth rate.

Vertical Analysis

In this type of financial analysis, various components of the company’s income statement are divided by the revenue and expressed as a percentage. The results are then compared against those of other companies within the industry to evaluate performance.

Financial Ratios

Financial ratio analysis helps to track and make comparative judgments about the company’s performance. This quantitative analysis assesses a company’s leverage, liquidity, growth, profitability, margins, valuation, rates of return, and more.

Financial Statement Analysis

Every company creates and monitors the following three main financial statements:

Income Statement/Profit and Loss Statement

The income statement reveals a company’s revenue and breaks it down against the business expenses. In other words, it shows the company’s net profit or loss after incurring costs.

Balance Sheet

The balance sheet reports a company’s assets, liabilities, and shareholder’s equity at a particular point in time. It is the basis for calculating the rates of return and evaluating the company’s capital structure.

Cash Flow Statement

The cash flow statement summarizes a company’s cash flow from investing activities, operating activities, and financing activities. It shows a company’s ability to function in the short and long term based on the amount of cash flow into and out of the business.

Techniques of Financial Analysis

An organization’s financial performance can be assessed using a variety of analysis techniques. Here we’ll cover four common financial analysis techniques:

Comparative Financial Statements

This technique involving the income statement and balance sheet compares two financial statements from different periods in time.

Trend Analysis

In this analysis technique, metrics of one period are compared with another to reveal the financial health status of the company.

Statement of Changes in Working Capital

The total current liabilities are deducted from the total current assets to calculate the net working capital in this technique.

Common Size Statements

This vertical analysis technique helps in the comparison of two similar statements between companies or different periods.

Financial Analysis Best Practices

Identify critical business problems and work out how financial analytics can help.
Start with a small pilot program requiring minimum effort and investment.
Organize, structure, and manage data sources.
Continuously monitor and improve data and tools for increased impact and relevance.

Financial Analysis Prodegree Course

There are a lot of financial analysis courses available online. One of the more popular courses is the Financial Analysis Prodegree, in collaboration with KPMG. It is a 180-hour skill-building Financial Analyst Course covering financial modeling, accounting, valuation, corporate strategy, and equity research. One of the most rigorous project-based courses for Financial Analysts, it prepares individuals for careers across sectors like corporate finance, investment banking, and private equity.

Importance of Financial Analytics Courses in New-Age Careers!

Posted on August 25, 2021October 15, 2021 by Imarticus Learning

Reading Time: 3 minutes

The banking sector is getting smarter. This digital transformation includes the integration of banking business with digital technology. With a significant aspect of finance happening to investment banking, it has become a significant factor in the banking industry which proposes a substantial career opportunity to many.

Here are some career paths a finance degree can prepare you for:

Fintech business analyst

Fintech companies provide consumer services like business loans or digital banking and work with traditional financial institutions to modernize technologies. Fintech companies look for business analysts with strong financial knowledge. If you’re a fintech aspirant, gain some business operations or data analysis experience for a competitive edge.

Impact investing analyst

Impact investing and closely related socially responsible investing are budding methods of investing, which lets investors choose to place funds in projects that align with their value proposition. Investors screen portfolios for companies that are working to alleviate social issues. Analysts work for companies focusing on responsible investing.

Financial analyst

Financial analysts describe data & help investors make sound decisions. Financial analysts work for investment banks & businesses to find new business or investment opportunities. They are responsible for studying the big-picture phenomena like market trends and competitor movement, devise models & predict sales and guide business decisions.

Commercial banker

Commercial banking has gone through a massive transition in recent years, adopting digital technologies to enhance its services while evolving to accommodate new players in fintech. But commercial bankers play an active role in the economic health of local areas.

Financial advisor

A financial planner guides clients to achieve short & long-term financial goals. An advisor counsels a client on investment structure or prepares plans to help pay for college for a client’s children. Personal finance advising is a rewarding career, with immense opportunities for face-to-face interactions.

Why get a finance degree?

A finance degree equips aspirants with an understanding of accounting, statistics, and economics and prepares for a career in managing money in various forms. Finance is a crucial aspect of most organizations, making the industry more versatile and steadily in-demand across many sectors.

Studying finance opens scopes for careers with significant financial rewards, but that’s not the only benefit. Finance powers the economy, and professionals drive the economy on the right path. Finance in the right hands is a powerful force for innovation, prosperity, and social benefit.

Finance degrees: Bachelor’s, Master’s, and Online degrees

Bachelor’s degrees in finance

Before courses for financial analysts, a bachelor’s degree in finance is the first step for a finance career. Undergraduate coursework in finance includes introductory courses like accounting, macroeconomics, microeconomics, and statistics. Some courses may demand calculus or other mathematics.

Master’s degree in finance

A master’s in finance builds an understanding of finance basics. Coursework includes financial modeling, pricing theory, data analytics, and financial ethics. A master’s degree enhances earning potential & prepares you for tasks needing a deeper understanding of financial principles.

Earning online finance courses

Online learning fits the quantitative and analytical nature of finance degrees. The online financial analytics course syllabus has multiple perks, are affordable and flexible. Online courses specifically cover skills like financial modeling or accounting.

Additionally, chartered financial analyst courses & financial analyst courses are other ways to build a finance career.

Getting started in finance with Imarticus Learning

If you’re ready to get started, take a look at Imarticus Learning’s accounting, business, and finance degrees. Since the role of data and financial analytics is clear for the Fintech industry, professionals must strive for a better career in analytics. A financial analyst course is the first step to pave the path into the world of big data.

Imarticus Learning empowers students with Financial Analysis Prodegree (FAP) that experts professionally tailor to use proper data analytics applications efficiently. The financial analytics course syllabus comprises theoretical and practical knowledge through workshops with industry experts, which provides an excellent opportunity to learn.

Please send us an inquiry today through the 24×7 Live Chat Support System and request virtual guidance from experts!

Technology Investment Banking: Take Over the World with Zero Earnings and Negative Cash Flows

Posted on August 21, 2021April 5, 2024 by Imarticus Learning

Reading Time: 3 minutes

When it comes to technology, investing in companies that are not making a profit might seem unreasonable. However, let’s assume the case of Amazon or Tesla where both these companies had negative earnings during certain quarters which scared investors immensely. In the long run, these two are highly profitable companies, but even then, they still sometimes manage to astonish their investors with poor earnings in a few unfortunate quarters.

There are many emerging technologies that have been and can be invested upon during their negative phases where they end up losing more value (or money) as compared to their earnings. Good investors take these risks with technology and software companies when they see a certain amount of hope or trust that these companies will certainly become profitable in some time.

Massive investment banking firms such as Ernst & Young, Morgan Stanley, Goldman Sachs, and others have dedicated technology divisions, focused only upon investing in technology that will be important in the future or companies that have been estimated to become household names.

A Certified Investment Banking Operations Professional (CIBOP) course can definitely assist in transitioning to investment banking jobs.

What are Negative Cash Flows

Negative Cash Flows occur when companies spend more money than they generate within a stipulated duration. However, Negative Cash Flows do not necessarily mean the company is running at a loss, it is simply a status that equates to imbalances in the revenue stream.

Though it means that the total expenditure outweighs the net income for the specific period, companies can still make a net profit in the long run. In areas such as technology, the initial phase is spent on research and development, thus, actual profit cannot be seen till products or the software is deployed and available to the public. So, investors and firms can still make a profit by looking at the gross margin.

Products should sell for more than their production cost in order to make a profit. However, in the case of Tesla, during the first quarter of 2021, the company lost $970 for every Testa automobile sold (which they covered up with credits and bitcoin sales). Without their credits and BTC sales, they would actually end up losing $181 million.

Amazon, one of the biggest names now, took 14 years to cumulatively turn up the net profit that it earned in just the 4th quarter of 2017. In fact, until the early 2000s, Amazon incurred negative returns during every quarter.

Why are Zero Earnings Beneficial for Investors?

Many technological companies suffer from negative earnings quarter after quarter, however, some always end up achieving blue-chip status or acquiring massive value. This is especially true for biotechnology, IT, semiconductors, hardware, and aeronautical innovations. Investing in early-stage firms from these industries that are currently suffering due to difficulties can promise massive rewards that far outweigh the associated risks.

The possibility of invested companies discovering extremely important technology that assists medical science or AI systems that are capable of running entire cities is far too alluring to miss out on. Zero earnings or negative earnings can be a short-term situation and smart investors rely on the gross margin for longer durations.

It is a high-risk investment, however, large investment banks and investors are generally willing to be patient with temporary problems for an earnings recovery in the future. When wondering about what are the career options after graduation, one can definitely look into investment banking.

Conclusion

A certificate in investment course details shows the way to become a budding investment banker for helping investment firms. Valuation methods such as Discounted Cash Flow and Relative valuation take a company’s temporary problems and the future profit into account to determine if it is worth taking the risk.

So, what are the career options after graduation? Candidates are first recommended to definitely enroll for a Certificate in investment course, details are available here.

How Do I Get Into Investment Banking

Career As An Investment Banker

Difference Between Commercial Banking and Merchant Banking!

Posted on August 16, 2021April 4, 2024 by Imarticus Learning

Reading Time: 4 minutes

Commercial Banking :

Commercial Banking refers to the form of the banking service where commercial banks offer various types of monetary services to anyone who wants to avail its services including the public as well as corporations whereas Merchant Banking refers to the form of the banking service where the merchant banks offer financial services to a large company or wealthy individuals.

When you are looking to build your career in the banking industry, the terms commercial banking and merchant banking will sound familiar to you. In this article, besides discussing the differences between commercial banking and merchant banking, we will guide you about the educational prerequisites to succeed in these both banking sectors.

Both of these are essentially two-key banking services that offer many students good rewarding career choices in finance. They are separated mainly based on the nature of offered services and the clients they serve.

Commercial banks verify and uphold savings accounts of individuals; provides loans and mortgages to individuals or small-scale businesses. But merchant banks operate as fiscal consultants to large-scale companies. Commercial banking is usually reachable to everyone for elementary banking requirements, whereas merchant banking is concerned to hand out primarily to large corporations and very wealthy persons.

What is Merchant Banking?

Merchant banks provide financial services for corporate entities, including trade financing and a whole range of international financial activities. They usually cater to mid-sized corporations and can assist with the underwriting of securities, raising venture capital, and offer a host of trade advisory services depending on the specific needs of their clients. They primarily earn through the fee paid for their advisory services.

The main focus of the merchant banks is to invest the depositor’s assets in a financial portfolio which suits best their various requirements like return, risk-taking capacity, etc., and then appropriately manage these investments. Other services offered by merchant banks include providing counselling and advisory services to wealthy individuals and large corporations. As these banks offer various investment functions, they are typically called investment banks.

Commercial Banking Vs Merchant Banking

● Definition

By definition, commercial banks are banking establishments that offer basic banking services to the general public like providing a loan and deposit money. By definition, merchant banks are financial institutes that provide various financial services to multinational clients with higher net worth, and they have specialization in international trades.

● Accessibility

Commercial banking is accessible to anyone who needs basic banking services. Merchant banks’ accessibility is limited to big companies and affluent individuals.

● Earning

The main source of income for a commercial bank is the interest received on various loans issued. Apart from that, for various banking services they provide like ATM and mobile banking, they charge certain service fees. The key earning in the case of merchant banks comes from the fees received for the advisory services they offer.

● Effect in economy

Local operation areas of the bank are the economically impacted areas for a commercial bank. Large corporations, the clients of merchant banks are impacted by merchant banks. Hence, stock market prices and the national economy are impacted by merchant banks.

● Risk exposure

Commercial banks’ risk exposure is less in comparison with merchant banks.

● Nature of loan extended

Loans that a commercial bank provides are more debt-related. On the other hand, merchant bank-provided loans are more equity-related.

● Role

Commercial banks serve their clients as financiers but merchant banks serve their clients as financial advisors.

● Governing act/body

Commercial banks are under Banking Regulation Act, 1949. Merchant banks follow the rules and regulations composed by SEBI (The Securities and Exchange Board of India).

● Engagement type

Commercial banks engage in the general banking business buch schreiben lassen. Merchant banks are more of a consultancy service providers.

● Target clients

Commercial banks are established to fulfil the banking needs of the general public Google Agentur. Merchant banks are established to accomplish the financial needs of corporate firms.

Education required

Commercial banking

An accounting, finance, or mathematics degree could help you if you are looking forward to working in the commercial banking industry seo texte schreiben lassen. Strong knowledge and a Postgraduate Program in Banking and Finance you can look at depending on the role you are trying to pursue.

Merchant banking

Merchant banks mainly hire Postgraduates in Banking and Finance. Certifications like Postgraduate Program in Banking and Finance could add great value to your profile Amazon Agentur. Fluency in a foreign language also could be a great add-on.

Commercial Banking

Pros:

Commercial banks offer some of the most popular career options in banking. Job roles in this field accommodate people with widely differing skill sets, and compensation is also adequate.

Advanced educational qualifications or practical experience is not a must for some entry-level positions in commercial banking ghostwriter Husarbeit, which makes it more of an accessible career option for an average individual.

Merchant Banking

Pros:

One of the best banking career options in terms of package and bonuses, along with exciting and challenging work roles. Merchant banking is more of a high-profile career where professionals help secure major deals and facilitate raising funds for corporations.

Remuneration is quite competitive right from entry-level positions. Growth prospects are excellent, making it possible for a dedicated professional to rise through the ranks to become a vice president or managing director in a firm.

The Reason why Credit Under Writing Can’t be 100% Automated!

Posted on August 16, 2021March 22, 2024 by Imarticus Learning

Reading Time: 3 minutes

Over the past decade, AI & ML have transformed the Fintech industry in different ways. Whether examining use cases such as general robotic process automation (RPA), chatbots and Robo-advisors, personalized banking, cybersecurity & fraud detection, or numerous others, AI has streamlined processes for financial institutions & consumers. One of the most complex applications of AI is predictive technology for credit underwriting & risk monitoring.

But, some benefits of both AI & ML notwithstanding, several obstacles hinder the comprehensive automation of credit underwriting. Here’s all you need to know on why Credit Underwriting can’t be automated 100%.

Regulatory barriers, restrictive black-box algorithms, and other challenges

While there exists a seemingly infinite list of benefits, expecting swift & 100 percent automation of credit underwriting could go wrong for a while. There are technological shortfalls & regulatory roadblocks due to which 100% automation may not be achieved yet. The most significant barrier is the lack of explainability within AI. As a result of meticulous regulations the financial institutions face, AI models need to produce a definite explanation & reason for each decision, prediction & risk assessment.

While ML applications grow in specialized ways, the models become increasingly opaque and are challenging to interpret. The ability to define the black box, non-linear models, is critical, especially in finance, which makes both the predictive output & accuracy of prediction critical. To satisfy the regulatory demands, AI models should render plain-text & interpretable explanations, which is currently a challenge.

Another common barrier hindering wider adoption & complete automation of credit underwriting is data access. Lack of quality datasets may create issues in smooth functioning that may hamper operations as well. Minimal or compromised datasets are factors that are responsible for derailing a successful model. This is why predictive models must have access to global, varied & diverse datasets to achieve the highest levels of prediction accuracy.

Other hurdles include limiting third-party data silos that need administrative permission and overall prediction accuracy, which notoriously varies among different models & AI technologies.

The Future Path to Automation

In the upcoming decade, AI isn’t eyeing to replace credit risk officers. Instead, credit risk officers who utilize AI will replace those who aren’t handy with these tech-based solutions. We are currently in the latter stages of those initial decades when it comes to AI-assisted credit underwriting.

But automation will not sweepingly eclipse the work of fintech professionals. The expert human overview will be required to assure accuracy for cases of outliers & eliminate self-selection & biases.

For those eyeing a career in Banking and Finance, it is an opportunity to clinch the technology and fly high with the aspirations. A certificate course in banking and finance is an excellent option for employment after graduation or after B. Com!

Learn and Grow with Imarticus Learning:

Get an in-depth understanding of the dynamic banking and non-banking financial corporations (NBFC) loan markets through the Credit Risk and Underwriting Prodegree offered by Imarticus Learning.

In this Credit Risk and Underwriting Prodegree, students are empowered to acquire a powerful toolkit that helps you understand India’s credit landscape, learn the entire loan assessment process and due diligence and conduct financial analysis.

They get a hands-on learning experience as you explore five comprehensive case studies. Each case study is linked to a different aspect of the curriculum, providing you with an opportunity to apply your skills and gain an in-depth understanding of how credit risks and underwriting works.

For further details, contact us through the Live Chat Support system or visit our training centers in Mumbai, Thane, Pune, Chennai, Bengaluru, Hyderabad, Delhi, Gurgaon, and Ahmedabad.