We’ve Cracked the Code on the New Investment Banking Interview that Everyone Hates

As companies resort to technology to find more convenient processes, new alternatives to traditional procedures like recruitment interviews start to rise.

HireVue is an example of that. Thanks to this digital recruitment alternative, large investment banks such as Goldman Sachs and JP Morgan can review more candidates in less time.

The process is quite simple. You get the HireVue invitation, you sign up to the software, and get video questions resembling a traditional interview. You will have 30 seconds to assess the question and three minutes to reply the best you can — all of this without having an actual person talk to you.

However, the lack of human interaction is why most people hate this new alternative. Even though it might be great for shy people that would avoid one-on-one conversations, a lot of people also think this method is dehumanizing.

But why has this software been so successful, then? The truth is that it’s a great advantage to companies. HireVue not only records your answers, but they also mix video interviewing and artificial intelligence to get the most out of that first contact with a candidate. Algorithms collect non-verbal cues such as body movements, details of clothes, tone of voice, eye movements, and facial expressions. The software turns this information into data points and analyzes them to provide insight to HireVue clients.

Besides, it saves time, transportation, and it helps them find the best talents for further one-on-one assessment. As we can expect with these pros, this new method of recruiting is not going anywhere. Regardless, it still puts candidates into a pretty uncomfortable situation, so you have to be ready for when it knocks on your door anytime soon.

These are our top tips for acing investment banking HireVue interviews.

Before The Interview

  1. Get everything ready.

You will want to have everything ready before your interview. Even though you’re the one who chooses the time of the meeting, finding out that you’re not entirely prepared right before it is a massive inconvenience. Before clicking that invitation link, make sure you have the following things in check:

  • Adobe Flash Player

  • A webcam, an external one will offer better quality, but a built-in one will also get the job done. Try to keep it at eye level to avoid awkward angles.

  • A microphone.

  • A static chair. If you use a swivel chair, you will tend to move because the chair allows it, and this will only make you look nervous throughout the interview.

  • Appropriate attire. Even though this is a video interview, you will still have to look professional and well-manicured.

  1. Find a great spot with no distractions.

To have an excellent backdrop for your video, you have to make sure you have a clean and well-lit background with no distractions. Some common disturbances are:

  • A messy setting

  • Pets in the room

  • Loud noises

  • People walking into the room

  • Your phone being too close to the mic, either vibrating or ringing.

Distractions create bias in the recruiter reviewing your performance, and they take away the focus away from you. They could ruin your chances if you don’t take care of them before your interview.

  1. Let people know you will have an interview.

If someone lives with you, let them know when you’ll be recording your answers, this way they won’t create some of the previous interruptions. However, if you live alone and have pets, ask someone you trust to take care of them while you have the interview.

  1. Prepare for the questions.

Prepare as if you were taking that interview in an office inside your dream firm. Look for sample questions and study hard, always practice your answers. Try saying them looking directly at the camera for practice, that way you will feel more comfortable during the actual interview.

Ask a friend to have a Google Hangout with you so that you can practice even further. Google Hangouts will record your conversation and upload it to YouTube so you can later review it. Thanks to this option, you will be able to not only check your answers and delivery, but you can also make sure your background looks perfect.

If you tend to forget a specific point in your answer, you can use sticky notes around your computer screen to keep reminders at eye level. This way, you won’t have to look down while answering.

  1. Get to know the software.

Spend some time getting to know HireVue and how it works. You don’t want it to be an obstacle while you record. You’ll likely get practice questions that will allow you to record yourself with no pressure at all. Then see how well you performed to correct minor details. This practice round will polish your delivery and make you look more prepared.

When you’re finally ready, just click Continue to Interview.

During The Interview

  1. Look at the camera.

You will only have one chance to record your answers, so you have to knock it out of the park. This is why it’s so important to practice your responses before your interview. Remember to look straight at the camera while your answering to make it seem like you’re keeping eye contact with your recruiter, this is crucial. If you find it too difficult or awkward, just ask a friend to sit behind the computer while you answer the questions. This will make it feel like you’re talking to someone else; however, you will still have to look into the camera.

  1. Relax.

The bankers examining your performance will expect you to be uncomfortable, so they will understand if you look a bit awkward in front of the camera. You don’t have to carry this massive weight over your shoulders trying to look like a YouTube star.

Relax and be confident about your answers, try to show your personality during the video. Your attitude will shine through the screen and get you that face-to-face meetup. Also, check out https://soundcloud.com/wallstreetmastermind for more in-depth info about investment banking interviews. They have a great podcast about it there.

Even though the HireVue interview is becoming more and more popular, they still don’t replace traditional meetings. HireVue will only be a convenient and time-saving opportunity for you to showcase your personality and talent to investment banks. Follow our advice to make the most out of it, and you’ll surely get that second interview.

5 Tips to Master Investment Banking Interview Questions

Investment banking (IB) interview questions are not an easy deal. In fact, preparing for them can be quite overwhelming once you realize how much time and effort you will have to dedicate in order to learn how to answer them all.

However, it doesn’t have to be like this.

Finding the right answer to every possible question is not hard. There are almost too many resources on the internet teaching you how to answer these IB questions, word by word. But you have to think about the person on the other side of the table as well.

Your interviewer won’t see anything special in you if you just say everything you found on the Internet. Truth is that they’ve interviewed hundreds of candidates, and most likely a lot of them prepared the same way you were planning to, memorizing the WSO/BIWS guides from front to back, or reading the 300+ pages of Rosenbaum. If your plan is to do exactly that, you will just be reciting an outdated script your interviewer has probably heard too many times already.

You don’t have to memorize 400+ answers and questions in order to succeed. The key is to prepare smarter, not harder. Keep reading and get the job of your dreams with these 5 tips to master investment banking interview questions.

1. Know what questions to expect

Before you can prepare to ace an interview, you need to know what to study for. Yes, technically there are an infinite number of questions your interviewers could ask you, but in reality, not all questions are created equal. Spending your time memorizing 400+ questions when your interviews are only going to be 30 minutes each is plain silly. 80% of those questions are probably questions you’ll never see… so what’s the point?

Make sure you start with the guaranteed questions, such as tell me about yourself/walk me through your resume, why investment banking, and why our bank. From there, be ready to go deep on every single item on your resume, talk about your strengths and weaknesses, and have examples of times when you’ve exhibited the qualities that investment banks look for.

Similarly, on the technical side of the interview, different types of questions have a different probability of showing up in your interview. More on this in the next point.

If you prepare the right way, this doesn’t need to take a lot of time.

2. Study your technicals in the right order

When it comes to technical questions, you should study the concepts in order of increasing difficulty. There are two reasons for this:

1) The easiest concepts are most likely to show up in your interview, because if you don’t even know the basics, the interviewer is not going to bother testing you on the more advanced concepts.

2) All the concepts are actually related and build on top of each other. Without having a strong foundation on the easy stuff first, you’re not going to be able to master the more advanced concepts. You’d simply be building a house of cards that eventually comes crashing down. Learn to walk before you run!

So what is the order, you ask? Learn the accounting and three statements first. Understanding how all the different line items flow and relate to each other is the foundational knowledge you need to understand everything else. Next, move on to valuation methodologies, because that’s the core of almost everything you do in banking, regardless of whether you’re working on a capital raise or M&A deal. Once you understand how both the three statements and valuation works, then you can learn about M&A. The three statements allow you to understand accretion/dilution, while valuation allows you to understand how the purchase price is determined… which is also an input to accretion/dilution!

And lastly, you can learn about LBOs, which is really just a variation of M&A, except the buyer is a private equity firm instead of an actual company. Again, here you need to have strong knowledge of the three statements to actually understand how an LBO model works, and you need to understand valuation to determine the purchase price.

If you do these out of order, a lot of these concepts won’t make sense to you. Do you see how everything is all related yet?! Which brings me to my next point…

3. Don’t use brute force memorization, connect the dots instead to achieve physical mastery

Most people struggle with technicals because they are just using brute force memorization, where they memorize all the different formulas, but have no idea how they are related to each other. If you’re just memorizing things, the interviewers nowadays are way too sophisticated for that anyway. They know the questions that are in the most popular interview guides, and they know if they just ask the exact same questions, they won’t be able to distinguish the good candidates from the mediocre ones. Instead, they are going to change things up, disguise the questions, ask a different variation, change the numbers and assumptions, to apply pressure and test if you really understand what you’re talking about.

With that said, the key to really mastering the technicals is to CONNECT THE DOTS. When you connect the dots across the different concepts, you start to see the big picture and everything starts to make sense. And when everything starts to make sense and that light bulb goes off in your head, you no longer need to memorize anything. Everything clicks, and the technical knowledge becomes something that’s ingrained in your long term memory.

Never again will you have to say things like “oh I haven’t reviewed my technicals in a week, I need to refresh myself on it because I’ve forgotten everything.” That’s the difference between brute force memorization (not sustainable) and physical mastery (permanent knowledge).

4. Know where you are along the curve for behavioral questions

Once you have your technicals nailed down, you need to understand that’s just the minimum requirement. In other words, technical questions can get you eliminated, but it won’t be what gets you the job. This is because even if you nail all of your technicals, chances are many other candidates are also doing the same. So from there, the thing that separates the winners from the losers is actually behavioral questions.

When it comes to behavioral questions, the first thing to understand is that unlike your technicals – which are being graded on a “pass/fail” basis – your behavioral answers are actually being graded on a “curve” instead. This is because unlike technical questions, there’s no “right” or “wrong” answer per se. That’s why it’s extremely silly when everyone just recites the “standard” behavioral answers that they read in the popular interview guides, as if everyone should just say the exact same things. If only it were that easy!

In reality, when it comes to behavioral questions, the interviewer is trying to determine who really stands out as a candidate, so feeling good about the answers you’ve come up with for yourself isn’t quite good enough. Having spoken to hundreds of investment banking candidates, I can tell you that 9 out of 10 people always think they’re pretty good at behavioral interviews. This is not surprising, because people often feel like talking about themselves is a pretty straightforward thing to do.

However, it doesn’t matter that your answers are “good” if all of your competitors’ answers are “better” or “best.” Considering the acceptance rate in investment banking, we know that statistically, 9 out of 10 people are actually going to fall short! So the only way to really know if you’re set on the behaviorals, is if you know for certain that your answers are better than everyone else’s answers. In fact, I’d aim for 95th percentile or higher to be safe.

Problem is, most candidates simply have no idea how they stack up against the competition. Because they’ve never interviewed other people, and don’t know what other candidates are saying, it’s impossible for them to know.

Unfortunately, there are no magical shortcuts around this – the only way to accurately assess is to have someone with A LOT of experience interviewing candidates do it for you.

5. Base your area of improvements on a large sample size

And that brings me to my last point. If your behavioral answers aren’t quite where they need to be yet, you need to get constructive feedback on how you can improve them. You cannot and should not try to figure this out on your own, because whatever mistakes you have in your answers are most likely going to be hidden in your blindspots. It’s why you made those mistakes in the first place.

Your answers are by definition already your “best effort” – so someone else needs to point out the flaws for you. Please don’t think “oh I just need to think about this a little more and then I’ll be able to come up with something better.” It really doesn’t work like that.

Ideally, this feedback should come from the same person that’s grading your answers along this “curve.” The main thing to keep in mind before you seek out this advice, however, is that whatever advice this person is giving you needs to be based on a large sample size of data – i.e. someone who’s interviewed a lot of candidates before. Oftentimes, candidates tell me they will just ask the upperclassmen in school for advice. Sure, that is a good place to start, but it doesn’t always help, and sometimes can even backfire.

This is because even though the upperclassmen you’re talking to may have gone through the process once themselves, that is still a very small sample size. They are basing their advice on their own experience, which is basically the experience of one candidate. A sample size of one is not enough to accurately place you on a curve of any sorts.

Lastly, an answer that worked for any single upperclassman may not necessarily work for you, because no two candidates are the same. Sometimes when you talk to multiple different upperclassmen, they’ll give you conflicting advice regarding the same answer. In that scenario, you actually become more confused about what you should do, and start to question yourself even more. Less certainty leads to less confidence, which results in worse results.

To avoid this, it is ideal to have a single source of feedback, and to ensure that person is experienced and qualified enough to be giving you advice. After all, for something as important as your career, you want to make sure you get this right. The analogy that I use is: if you needed heart surgery, would you want an experienced heart surgeon who has operated on hundreds of people? Or would you want the med school student who just started his residency to slice you open?

In conclusion, interviews in investment banking are extremely difficult to come by, and every interview you get should be treated as an opportunity to be handled with care.

If you follow these tips during the preparation process, you will be able to prepare for the big moment in an effective yet efficient way, that will actually help you give the impression you want while letting the bank know that you’re the best person for the job.

Stay on your mission

Never change plans for any distraction. That’s the one thing you should always remember if you ever want to achieve any of your goals. The moment you get distracted and decide to change you entire plan for just a distraction, that’s when you know you have failed yourself.

It doesn’t matter what your goal is – fitness, money, relationships, etc.

You decide what you want to achieve. Let’s say you want to be in the best shape of your life in 10 months. You get after it.

Your friends ask you to come out for a party? Sure, go out. But don’t drink or get hammered. Get home as soon as you can and get back to your training regimen. No days off. No matter what happens, you get your workouts in.

You wait for no one.