Banking
Conquering outdated cultures in investment banking
Global Banking & Finance Review®
Company
By Theo Williams, Managing Director at UpSlide
Theo Williams, Managing Director at UpSlide
There are three things that immediately spring to mind when we think about investment banking: long hours, challenging workloads and high salaries. But this merely scratches the surface of what’s going on under the metaphorical hood of the industry.
In such a busy and resource heavy sector, investment bankers are inundated within spreadsheets, presentations, and pitchbooks, all having to be meticulously produced, going through multiple rounds of reviews before being sent off to other departments and clients.
Naturally, the responsibility of making manual changes to these documents falls onto the shoulders of junior employees, with senior staff sometimes requesting edits late at night with a deadline of the next morning.
This is a heavily ingrained culture, so it’s going to be a significant challenge to introduce a shift in the sector. But before any genuine change can happen, we first need to understand three of the main barriers that would need to be overcome.
1.High expectations
Like all industries, there is a pressure on junior staff to go above and beyond their usual responsibilities. From both a personal growth and promotion standpoint, this is common practice for all ambitious workers. And Investment Banking is no different.
Junior bankers can be expected to be on-hand, even later in the evening, to handle urgent client requests that come in. Often there will be tight deadlines attached to such requests with the expectation that these are met. Ultimately this means a late night for the junior banker looking after the request. An example of such a request could involve adjusting assumptions in a model and then updating the relevant data points throughout the corresponding pitchbook; an uncomplicated but arduous task for junior bankers whose time could be better spent on tasks that generate more value for the bank’s clients.
Quite often, various senior figures will also have different preferences on how pitchbooks and reports should be formatted and styled. One individual may want their tombstone titles in bold, but another may prefer them to be underlined. This means junior bankers will need to manually alter each report, model, and pitchbook to fit the style of each banker – and again, such requests could come late in the day.
2.The rite of passage
In some cases, there is also the feeling that it is okay for junior bankers to work late nights and complete manual tasks because this was something more experienced senior bankers had to go through too. If there is a view that these more time-consuming and manual tasks are necessary for junior bankers’ progression, it’s understandable that there could be a reluctance to look for solutions that would make junior bankers’ lives easier.
There is of course great value in junior staff understanding processes on a granular level, which is why the solution cannot be to solely introduce new, innovative tools to replace the manual work – it needs to be accompanied by a more general shift in culture across the bank. Technology will undoubtedly play a crucial role however, as it can facilitate this cultural shift, as well as provide immediate relief for overwhelmed colleagues.
3.Live to work
Finally, there exists a certain pressure for work responsibilities to be prioritised over other areas of life. This in turn can make it harder to maintain a healthy work-life balance.
For example, there can be occasions where a senior banker may ask a junior banker to complete a client request over the weekend, despite other personal plans they may already have. Last minute jobs for clients are part and parcel for most industries, but there should of course be some consideration for staff resources, and client expectations can be managed more realistically. Again, wherever new tools are able to help in this regard can only be considered a positive and necessary step.
Changing the culture
Change, however, is coming to the industry, with retention, productivity, and employee wellbeing increasingly becoming front of mind for leadership. The addition of extensive media coverage on banker burnout last year further intensified the interest and resolve to enact real change, with committees now being introduced to give analysts more influence.
But there’s still a way to go and shifting the culture of an entire industry is a lengthy task. However, in the meantime, many junior bankers are still expected to meet these same expectations in high-pressured work environments.
Evidently, technology, and specifically automation, will play a crucial role in triggering immediate improvements. Tools that reduce the number of manual tasks will not only allow employees to focus on value-added responsibilities, but will also streamline processes, and remove the risk of human error, which, when staff need to make last-minute adjustments late at night after an intensive 15-hour day, is fairly high.
At the end of the day, everyone must start somewhere, but it doesn’t need to be the same starting point as it was for those who joined the industry 30 years ago. Times change, technology evolves. Ultimately, the question the industry must ask itself is: ‘why spend hours completing manual tasks – restricting staff productivity levels – if there’s a viable alternative?’
Investment banking is a financial service that helps companies raise capital by underwriting and issuing securities. It also provides advisory services for mergers and acquisitions.
Automation in finance refers to the use of technology to perform tasks that were previously done manually, such as data entry, transaction processing, and reporting.
Organizational culture refers to the shared values, beliefs, and behaviors that shape how work gets done within a company. It influences employee engagement and overall performance.
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