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7city Poll Finds Financial Institutions Lack Focus on Live Transaction Training for Investment Banking Analysts

- Survey finds that the majority of I-banking training programs evaluate through standard case studies and exams, as opposed to live transaction testing

7city Learning, a leading provider of global learning and development solutions for the financial services industry, released findings today from their Investment Banking Training poll, which surveyed Human Resources Executives from various global financial institutions. The poll dissected the content and objectives of Investment Banking training programs, surveying the general trends for such analyst programs.

According to the results of the poll, the majority of HR executives believe that the main objective of training is to produce desk-ready analysts. Similarly, 82% responded that their training programs have a strong emphasis on real-life and live case studies. However, 77% said their primary use of assessment is case studies and multiple choice exams, as opposed to utilizing live transaction evaluation which requires students to provide valuations and modeling of live M&A deals. Based on real events pulled from the news and company activity, live deal scenarios provide students the opportunity to apply the skills learned in training to deal scenarios they could potentially work on as part of their roles as analysts.

The results highlight the incongruence between the objectives and the practices of leading firms’ training programs. The advisory component of Investment Banking may suffer due to a lack of live transaction and authentic valuation, in comparison to the practice of standard examinations.

“Being a desk-ready analyst requires the ability to practically apply technical knowledge absorbed during training day one on the desk,” stated Geoff Robinson, head of 7city’s Investment Banking Division. “Investment Banking is an advisory profession which places heavy emphasis on judgment and analysis rather than stating a static black and white answer. In order to create the most efficient desk-ready analysts, training programs must rely on exercises that develop one’s ability to advise and demonstrate judgment, which cannot be fully obtained through the limiting practice of hypothetical scenario-based exams and multiple choice questions.”

7city’s Investment Banking training program incorporates cutting-edge techniques with a focus on real-life application. Analysts are presented with the task of completing a live valuation, with the expectation of providing advice and justification for their final recommendation. This interactive approach creates analysts who are prepared and ready to perform from day one.

“The process of incorporating a ‘virtual desk’ atmosphere, whereby the analysts have all the desktop resources in the training room, helps bridge the gap between training and the desk environment,” commented Mr. Robinson. “Creating desk-ready analysts is the cornerstone to designing and working with banks in creating world class investment banking programs.”