New finance courses surge after 2008 meltdown

The recovery in hiring in the investment-banking sector continues to be slow five years after the global financial crisis. This, however, does not deter tens of thousands of university graduates every year from dreaming of landing high-flying investment-management careers. Nor does it discourage those who have been laid off from their comfortable bank positions from wanting to get back into the thick of the action.

Though there are no strict compulsory requirements for becoming an investment banker in Hong Kong, there are core competencies and specialised skills that investment banks require, such as the ability to understand industry trends, corporate finance and the different strategies for helping corporations source funding.

Would-be analysts may have already learned these in school, but the pressure is on them to continue to upgrade their knowledge and skill set in order to stand out from the crowd.

Carrie Leung, chief executive officer of the Hong Kong Institute of Bankers (HKIB), believes that it is an advantage for an investment banker to have experience either in corporate banking or in treasury.

“Corporate bankers especially have very close relationships with large and medium-sized corporations,” she says. “They know the industry trends and the cash flows. They know how to formulate strategies to help corporations get funding, prepare them for IPOs [initial public offerings], and advise them on the most appropriate time to get listed.”

Founded in 1963, the HKIB is a not-for-profit organisation that provides continuous learning and development programmes, in the form of professional exams and training courses, to help bankers advance their careers. The group offers a number of qualifications – such as the Associate of the Hong Kong Institute of Bankers (AHKIB) – that serve as stepping stones into investment banking, in lieu of a degree in financial engineering or a Chartered Financial Analyst (CFA) designation.

“We provide platforms for members, not just those already in the investment banking field,” Leung says. “We also help those working in corporate banking and treasury departments gain the knowledge essential to moving on to investment banking.”

Some of the institute’s programmes explain the different kinds of investment tools, while others give updates on new financial products. Since 2008, the institute has also launched courses focusing on investor psychology. “We try to help our bankers understand not just the technical side of investment, but also the psychological side on the client’s part,” Leung says.

Most of HKIB’s training programmes are offered in Cantonese, Putonghua and English to allow members from European and non-Chinese banks to participate. Of late, many of those joining have shown particular interest in risk management and compliance. These programmes typically focus on ethics.

“We invite regulators to explain the different regulations. The regulator dialogue sessions are conducted in either English or Chinese. Those working in foreign banks can choose to attend their desired sessions,” Leung says.

In some programmes, regulatory requirements are highlighted via case studies. One workshop in July examined the effectiveness of supervisory initiatives and offered a generic view of how regulatory changes were driving the evolution of risk management practices.

Bankers between jobs often mull returning to treasury or corporate banking, Leung says. “Their knowledge and competencies are not just applicable to investment banking. They can help banks expand their business,” she says.

Joining the HKIB is another option. “Our institute offers a lot of opportunities. Being a trainer, they can stay in the market, maintain visibility, pass on their knowledge and get the chance to know other banks. There are many different projects where they could assist us,” Leung says.

Another option for those seeking to fast-track their entry into the finance industry, or to fine-tune their skills, is to take the financial modelling training programme offered by the Investment Banking Institute (IBI).

The IBI’s Financial Modelling and Corporate Valuation training programme is a comprehensive course that teaches advanced technical skills such as financial modelling, corporate valuation, mergers and acquisitions modelling, leveraged buyout modelling, and distressed securities analysis.

Zachary Cohen, managing director for global operations at IBI, describes the course as “the exact same training programme you would be exposed to at any major financial institution in New York, Hong Kong or anywhere else around the world”.

Held on weekends, the 30-hour IBI programme comprises lectures based on the practical application of financial models, rather than on just theories. The course is meant to re-create a “work-like” environment, where participants create their models from scratch in the classroom and implement them based on inputs provided by the instructor.

The skills learned in the programme are exactly those needed as a foundation when joining an investment bank, private equity firm or hedge fund, Cohen says. Trainees also have to complete homework to reinforce concepts learned in class.

Though still relatively new in Hong Kong, the IBI has already been asked by various local financial firms to help with the professional-development needs of their employees.

“Our programme has been continuously developed since our inception in 2002, to provide the most advanced training methods to ensure the success of participants,” Cohen says. “Our seasoned instructors are required to be working in finance at vice-president level or higher in their local markets while they teach our training programme. This ensures they are able to provide relevant advice and examples in today’s changing financial landscape.”

Besides teaching technical skills, another goal is to help students get through any IB interview by learning about interview Q&As, pitching, corporate environments and market trends, and by staging mock interviews.

“Students gain confidence by knowing exactly what to say in a real interview, understanding the follow-up process, and knowing what to do during their first month in the job,” Cohen says.

“We have heard numerous success stories from past participants who were able to excel in the interview process and got hired because they were prepared for the interview process and the technical portion of the interview.”

Business education is not the only prerequisite for entry to investment banking. Relevant experience and specialisation is now a necessity and this is a trend seen with many institutions, including business schools.

Still, many experienced investment banking analysts believe that a top MBA programme can give them more credibility with recruiters. In response, some schools have made adjustments to their programmes to accommodate those setting their sights on investment banking.

Ivey Business School – Asia recently held a leadership programme called “Leadership in a Volatile World” which focused on how to recognise, anticipate and respond to volatility. The two-day programme saw participants examine the four main sources of business volatility – economic, political and regulatory, societal and technological – using key insights from case studies. The programme was organised by Ivey Asia in partnership with Manulife Financial. Many of the attendees came from the banking and financial service sectors.

“That’s a programme that we’ve been running for two years now,” says Julian Yballe, director for executive development at Ivey Asia. “It actually goes back to the great financial crisis of 2008, when a lot of our professors started looking into the leadership implications of what happened.”

The programme is especially fitting for banking and financial services in general for dealing with the type of questions that they ask on a daily basis and for promoting organisational resilience.

“On an operational basis, we now see banks building up larger cash reserves and being more hesitant to hire. But they’re still looking to grow. The programme helps build those capabilities for managing the unknowns within the company,” Yballe says.

“You now see a lot of focus on risk management within companies, building certain measures to prevent what happened in 2008 from happening again. Businesses are trying to protect themselves.”

Ivey Asia also runs other programmes that are more focused on the practice of business. Its Consortium Programme is a custom scheme that puts together a group of five to eight companies, each of which sends a team of two to eight executives to learn from one another.

“We’ve been running the consortium for over 10 years now and feature two tracks: one for middle management and one at the executive level,” Yballe says. “Each features 12 days of programmes that focus on leadership, finance, marketing and strategy.” The next consortium runs from September 2013 to January 2014.