Why Investment Banking? How to Answer the Most Boring But Persistent Interview Question of All Time

“Why investment banking?” is not only one of the most common questions in interviews but also one of the most incorrectly answered ones.

An older version of this article from ~15 years ago addressed this question, and you can find dozens of other articles that suggest answers.

But most coverage suggests generic answers about wanting to learn a lot, liking financial analysis or valuation, or wanting to “understand different industries.”

These answers are bad not just because they’re generic but also because:

1. They don’t reflect the context of the interview. Your answer changes based on your work experience and the type of role you’re targeting (e.g., a summer internship that converts into a full-time offer vs. a boutique internship in your 1^st or 2^nd year of university).
2. They don’t reflect market changes over time. For example, internship recruiting starts very early for undergrads in the U.S., and there’s now an overwhelming amount of information online about investment banking.

I’ll explain these points here and suggest specific answers to “Why investment banking?” but I’ll start with the short version:

Why Investment Banking: The Short Version

• This article addresses how to answer this question in job interviews, not the reasons why you might pick investment banking as a career. For that, please see the articles on the investment banking career path, exit opportunities, etc.
• Your answer should be short (30 – 40 seconds, or 50 – 85 words spoken at average speed) and should come directly from the last ~1/3 of your story or resume walkthrough, where you explain your Growing Interest and Why You’re Here Today. You should cite a personal experience specific to you whenever possible.
• If you can, mention the specific firm you’re interviewing with in your answer. But if you do not have relevant points, or this makes your answer take more than 60 seconds, leave it out because bankers have short attention spans.
• If you are interviewing for a “steppingstone internship” as a 1^st or 2^nd-year undergrad or an incoming MBA student, you can use more generic reasons/experiences to explain your interest (e.g., student groups, activities, networking, competitions, classes, etc.).
• If you are interviewing for an internship that potentially converts into a full-time role, your answer must reference your work experience, how you liked Aspect X of Experience A and Aspect Y of Experience B, and how investment banking combines both.
• Avoid generic answers, such as wanting to “work in a fast-paced environment,” “learn a lot,” “gain a well-rounded skill set,” or “master Excel or PowerPoint” because you could accomplish these in many roles outside of investment banking.
• And do not mention anything about compensation, bonuses, or exit opportunities. Yes, that’s why 99% of people actually want to do investment banking, but you still can’t cite these reasons in your answer.
• You should also be able to explain why you’re choosing investment banking over other fields, especially ones you previously worked in (e.g., private equity or venture capital).

“Why Investment Banking?” in Interviews for Steppingstone Internships

You normally need at least 1 – 2 finance internships in the early years of university to be competitive for 3^rd year IB summer internships that potentially convert into full-time roles.

These 1 – 2 “steppingstone internships” could be at any firm, but many students do them at boutique investment banks or small/startup private equity or venture capital firms.

In these types of interviews, it sounds fake to present extremely detailed/specific reasons or say that you’re 100% certain you want a long-term career in banking.

You’re a student, which means you will likely change your mind about careers 10 – 15 times, and no matter how motivated you are, veteran bankers will be skeptical.

So, I recommend keeping your “Why investment banking?” answer casual but informed.

For example:

“Sure. So, in my first year at [University Name], I’ve taken a few accounting and finance classes and worked on a stock pitch for [Company Name] in the student investment fund. I liked the valuation work and enjoyed meeting a few alumni bankers at firms like [Firm Names], and I’m interested in working on the types of deals the alumni discussed.”

Another example:

“I got interested in deals when I was trading stocks last year, and one of them, [Company Name], was affected by an acquisition offer by [Acquirer Name] that was announced but then canceled. I wanted to learn more, so I joined the banking club at my university, worked on a case study for [Deal Name], and now I’m very interested in the advisory work bankers do.”

Or, at the pre-MBA internship level:

“Sure. I worked in corporate finance at Johnson & Johnson out of undergrad but switched to the business development team because the work was more dynamic, and I preferred working on partnerships over reporting and budgeting. I want to go beyond the JVs and partnerships to work on more complex M&A deals using my healthcare and finance background.”

The common theme in all cases is that you’re citing specific actions you took rather than simply describing the industry (talk is cheap).

“Why Investment Banking?” in Interviews for Summer Internship and Lateral Roles

If you’re interviewing for summer internships that convert into full-time roles or applying directly for full-time roles (e.g., as a lateral hire), you need to give more specific reasons in your answer.

The general template for “Why investment banking?” here is:

“I’ve worked in or had internships in Fields A and B, and I liked Element X of Job A and Element Y of Job B. I’m interested in investment banking at your firm because it combines Elements X and Y and lets me work on deals [of Type Q or in Industry R], which relates to my previous experience.”

Here’s an example for an undergrad aiming for IB summer internships:

“I worked at [Firm Name], a search fund in my area, reviewing acquisition targets there, and then interned at [Valuation Firm Name], where I worked on purchase price allocations in deals. I liked the analytical work and seeing the entire deal process at the search fund, and I liked working with a range of clients at the valuation firm. Investment banking combines both, and I’m especially interested in your group’s aerospace & defense focus because we had a client in the industry at [Valuation Firm Name].”

Or at the MBA level:

“Out of undergrad, I joined Google as a product manager but became more interested in finance, switched to FP&A, and then moved into corporate development. I liked working on deals more than reporting/budgeting, but I wanted to advise different companies rather than just one, so before my MBA began, I interned at [Boutique Bank Name], a local bank with a TMT focus. I want to combine these skills and my tech background and advise companies in the industry on larger and more complex deals.”

Why Generic Answers for “Why Investment Banking?” Are Bad

There are two “categories of bad” with this question:

• Generic Answers: You want to learn a lot, work in a fast-paced environment, master Excel, or gain a lot of responsibility right out of university.
• Inappropriate Reasons: You want to earn $200K out of undergrad, win a job at Blackstone, or retire by age 40.

I will assume that you have common sense and do not need explanations for why the “inappropriate reasons” are bad.

To understand the issues with the generic answers, imagine the following scenario in an interview:

Interviewer: So, why investment banking?

Interviewee: I want to work in a fast-paced environment where everyone gets a lot of responsibility from day one.

Interviewer: OK. Then, why not work in the emergency room of a hospital or as a firefighter?

Interviewee: Well, I’m a finance major, so I want to do something fast-paced in finance.

Interviewer: But sales & trading is faster-paced than investment banking during market hours. Or, you could do something else client-facing in finance, like corporate banking or business valuation.

Interviewee: Right, but in those, you don’t get to advise CEOs.

Interviewer: Do you understand what Interns and Analysts at our firm do?

Giving these generic answers makes it look like you haven’t done your homework and haven’t done anything related to IB in the past.

Again, talk is cheap: Bankers tend to discount anything outside of work or leadership experience that is related in some way.

If you can’t think of anything, use some of the strategies recommended in the article about how to write a finance resume with no real work experience.

Why Investment Banking Over Other Careers?

If you’ve had internships or full-time jobs in other fields, you should be prepared to explain why you want to do investment banking rather than one of those.

Your basic answer to “Why investment banking?” should also mention these reasons, but the interviewer could always follow up and ask you to expand on them.

Common reasons to switch from other fields to IB include:

• Venture Capital: You want to do deals rather than passing on them constantly, and you want to work with more mature companies and gain broader industry and deal experience.
• Private Equity: You want to do deals rather than passing on them constantly, you don’t like portfolio company management, and you want exposure to more than just leveraged buyouts and bolt-on acquisitions.
• Search Funds: You want to execute many deals instead of acquiring just one company, and you’re more interested in finance than operations.
• Hedge Funds / Equity Research: You prefer to advise companies directly rather than following them and investing small takes or recommending investing.
• Corporate Banking: You like client relationships and deal processes but want to do more than just debt-related deals.
• Corporate Finance: You like working with management and your team but want to focus on transactions rather than day-to-day reporting and budgeting.
• Corporate Development: You like working on M&A deals but want to do so across an entire industry rather than just at one company.
• Big 4 (Audit, TS/TAS, Valuations, etc.): You like the financial analysis and working with clients, but you want to do it on entire deals from start to finish rather than just small pieces of them.

Why Investment Banking: Conclusion

I’ll reiterate the second bullet point from the “Short Version” at the top:

If you have properly outlined your story, the “Why investment banking?” questions should be easy because it’s the last ~1/3 of your resume walkthrough.

If you even get this question, it’s a sign that your story was poor or that the interviewer was not paying attention.

Outside of those, this question is relevant because the interviewer could potentially ask, “Why investment banking?” before requesting your full resume/CV walkthrough.

If that happens, just think about your story outline and how you tie together everything in the ending to answer the question.

And if you truly cannot answer the “Why investment banking?” question with anything other than the generic reasons, you may need to reconsider your plans or gain more experience first.

Although it’s a boring question, it never goes away – because it tests what you have done rather than how well you can regurgitate AI-generated articles.