Investment Banking vs Financial Services-What is The Difference? (2024)

Investment Banks act as advisors or consultants to businesses and governments on how to meet their financial challenges. They also help their clients with financing, research, wealth management, asset management, trading and sales, Initial Public Offerings (IPOs), mergers and acquisitions, hedging, and more whereas Financial Services are a broad range of financial industries such as banking, investing, and insurance. It is a process to acquire financial goods or it involves a process or transaction to obtain the financial goods. We are going to look at Investment Banking vs. Financial Services in detail.

Investment Banking vs Financial Services are related fields in the same financial industry but they serve different functions and have different activities. Below are a few key differences between Investment Banking and Financial Services:

Services: Investment Banking Vs Financial Services

Investment Banking invests their customers’ money on their behalf for deals like mergers and acquisitions, underwriting, advisory services, and various types of loans and other financial transactions whereas Financial Services offers a broader range of activities that includes banking services, commercial services, insurance, wealth management, and many other financial services.

Clientele: Investment Banking Vs Financial Services

Investment banking serves large corporations, high net-worth individuals, and investors whereas Financial Services serves a broader client base such as individual customers, small and medium enterprises (SMEs), as well as large organizations.

Risk and Reward: Investment Banking Vs Financial Services

In Investment Banking higher returns come with higher risk, especially in areas like mergers and acquisitions, underwriting, and advisory.

The more successful transactions, the more growth of the financial firm whereas Financial Services are more into the traditional way of banking where there is less risk with medium profit. It is a very stable set of services that includes banking, insurance, and wealth management.

Regulations: Investment Banking Vs Financial Services

Investment Banking deals with specific regulations like trading, mergers, and acquisitions whereas Financial Services deals with a broad range of regulations that vary by sector.

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Investment Banking Vs Financial Services – Definition And Responsibilities

Who is an Investment Banker?

An Investment Banker is an individual appointed by as an advisor to advise high-net-worth clients on their capital investments. The major responsibility of an Investment Banker is to manage portfolios of individuals or organizations to get profitable returns.

The history of Investment Banks in India traces when European banks dominated investments and merchant banking in India. Indian Banks came into existence to stop the overpowering of foreign banks in the Indian market.

Some of the Key Responsibilities of Investment Bankers Are:

Deal Structuring: It is a process to organize and design business transactions with a minimal amount of risk involved. It involves the terms and conditions required for completing any deal mutually. Deal structuring plays a major role in mergers and acquisitions, partnerships, and other types of transactions.

Client Relationship Management: Maintaining a strong relationship with the clients is one of the major roles of an Investment Banker. Understanding and providing services as per their client’s needs will help them excel in their job which will also help their company to grow along with giving profitable returns to their clients.

Due Diligence: Due diligence and its categories are:

Legal due diligence
Financial due diligence
Commercial due diligence

Regulatory Compliance: Investment must ensure that all the transactions have complied with relevant financial regulations and legal requirements such as securities and disclosure law.

Financial Modeling: It is a process of creating a summary of a company’s expenses and earnings that is their profit and loss account in the form of a spreadsheet to calculate future decisions.

Major components of Financial Modelling are:

Income Statement
Balance Sheet
Cash Flow Statement
Debt Schedule

Presentations And Pitching: Preparing and delivering presentations, pitching the services, and delivering them to the clients is a prime role of an Investment Banker.

Work Pressure: As an Investment Banker, a professional should be able to survive in a high-pressure job with long working hours.

Mergers and Acquisitions: Providing advice to clients on mergers and acquisitions, assessing the value of the transactions, and designing and structuring the deal for financial growth.

Underwriting: Assisting in issuing various loans with all the necessary documents required is taken care of by the Investment Banker.

Risk Management: To minimize the risk through managing fluctuations in interest rates, currency exchange rates, and other commodity rates.

Research: Analysing the company’s growth, and analyzing market trends and economic indicators to assist clients in making informed decisions.

The above key responsibilities will help the readers to find a slight difference between Investment Banking and Financial Services.

List of some Investment Banks:

State Bank Of India Capital Markets
ICICI Securities
HDFC Bank Ltd
Axis Bank
Goldman Sachs
JP Morgan
IDBI Capital
Barclays bank
Central Bank Of India

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Investment Advisory Services

What are Financial Services?

Financial Services is a broad term used to describe the various offerings within the finance industry that involve how to manage money, invest wisely, protect against risk, and plan for their plans.

Why Financial Services are Important?

Financial Services are important and play a major role in the financial market as they enable people to make big investments and save for their future.

Investments are done via some representatives from the banks for which a commission or fee is charged, which is a common method of earning income for the financial service firms. It is one of the highest growing sectors with ample job opportunities.

Some of the top Financial Services companies are:

Mahindra and Mahindra Financial Services Ltd.
HDB Finance Services
Bajaj Finance Services Ltd
IDFC First Bank Ltd
Muthoot Finance Ltd
Tata Capital Financial Services Ltd
Aditya Birla Finance Ltd
Cholamandalam Investments and Finance Services Ltd.
L&T Finance Holdings Ltd
Edelweiss Financial Services Limited

Below is the List of Some Types of Financial Services:

Professional Advisory
Banking
Wealth Management
Mutual Funds
Stocks Market
Insurance
Treasury or Debt Instruments
Tax or Audit Consulting

Some of the key points of Financial Services are:

Banking: Banking Services like savings and current accounts, various types of loans, and financial products including electronic funds transfers and payment systems. Remittance, consultancy, or advisory services are also important parts of banking services.

Insurance: The main purpose of various types of insurance such as life insurance, health insurance, general insurance, property insurance, etc. is coverage against any risk. The process involves customers paying the premium amount to the insurance company and receiving the agreed amount in case any event occurs.

Investment Services: These services involve providing advisory services to its clients for investing in stocks, bonds, mutual funds, and other securities. These firms are called Investment banks, brokerage firms, and financial advisors.

Asset Management: Asset management can be explained as managing day to day running of a wealth portfolio. An investment manager also known as a relationship manager or wealth manager is assigned to advise some sets of customers and help them to solve their financial challenges resulting in some profitable investments.

This includes assessing risks and finding opportunities. More simply it can be explained as managing clients and growing that money at the same time, mitigating the risk.

Real Estate Services: Suggesting and assisting customers on mortgages, real estate transactions, and property management. These services are assisted by professionals assigned by the financial companies.

Credit and Lending: Credit and Lending facilities include services like personal loans, credit cards, mortgages, and many other loans.

Financial Planning: Retirement planning, income budgeting, tax strategies, and investment advice are essential parts of financial planning services. These services are provided by qualified professionals hired by financial firms.

Wealth Management: Managing and growing the wealth of high-net value customers by offering them financial advice, and investment strategies.

Financial Education: Giving proper financial education to the customers to help them understand the financial market through conducting webinars, seminars, and workshops.

Technology and Innovations: New technology and innovations help in efficient financial transactions. Developing and continuously improving mobile banking and online banking services through new technologies and innovations.

Corporate Finance: Through corporate finance, businesses raise capital through Initial Public Offerings (IPOs). We are also advising businesses on mergers and acquisitions, underwriting, and various financial services.

Government Relations and Compliance: Compliance can be maintained by maintaining proper government relations and proper reporting of financial activities should be reported to the stakeholders.

Risk Management: Risk management can be assessed to manage various financial risks, credit risks, market risks, and operational risks. Insurance products are helpful in mitigating risks related to health, life, property, and more.

Check These Investment Banking Courses in India Near you:

Investment Banking Courses in Noida
Investment Banking Courses in Chennai
Investment Banking Courses in Ahmedabad
Investment Banking Courses in Nagpur
Investment Banking Courses in Guwahati
Investment Banking Courses in Patna
Investment Banking Courses in Varanasi
Investment Banking Courses in Goa
Investment Banking Courses in Lucknow
Investment Banking Courses in Nashik

Who can be a Financial Professional?

There is a difference between the Investment Banking and Financial Services professional categories, the latter has a broader option. As a financial professional an individual must have an experience in various aspects of finance. These individuals work in the fields such as investment, finance, and accounting. Some of the common types of financial professionals are:

Accountants: An accountant’s role is to keep a proper record of the accounting, and auditing and to prepare financial strategies for businesses and individuals.

Stockbrokers: They are financial professionals who buy and sell stocks and bonds in the stock market on behalf of their clients whether individuals or organizations. They also help their customers with investment advice.

Insurance Agents: Insurance products are a little complicated to understand without having theatrical knowledge, this is where an Insurance agent plays a crucial role in helping its customers by guiding them about the right insurance product as per their needs.

Below is the List of Some Top Institutes for Providing Courses on both Investment Banking and Financial Services:

1. IIM SKILLS-

IIM SKILLS is a well-known online institute that offers various courses and the Investment Banking Course is one of them. You can visit the official site of IIM SKILLS for any information about their courses.

As investment banking jobs are on the rise, their courses are designed as per market demands, and in this course, students are taught every detail of Investment Banking and when and how to use them in day-to-day life when working as an Investment Banker in any organization.

What Will You Get in the Investment Banking Course at IIM SKILLS:

Online Investment Banking course
70+ Hours of lectures including training and doubt-solving sessions
Practical Assignments and Case Studies for real-time experience
Guaranteed Internship for 1 month with 100% job support.
Get assistance with LinkedIn profile building.
Recognized Investment Banking Certification.

The Following Modules Covered Here Are:

MS PowerPoint:

Introduction and understanding of MS PowerPoint.
Keyboard shortcuts and their importance
Creating, managing, and designing the slides
Adding transitions and animations
Creating the slide master
Inserting pictures, and links and editing them
Working on illustrations and shapes
Building different kinds of graphs and charts

MS Excel:

Introduction to MS Excel and Ribbon
Uses of many different functions
Rules of conditional formatting
Font and Number Formatting
Data validation, sorting, and filters using Excel functions as well as formulas
Table functions and dynamic arrays
Data presentation.
Introduction to Macros

Fundamentals of Financial System and Market:

Basics of the financial system
Money market
Market participants and Regulators
Stock Exchange and Financial Centres
Meaning of depository receipts
Characteristics, Securitisation, and types of bond
Yield to maturity
Forex and its features
Quotes and Trades

Derivatives Market:

Introduction to Derivatives Forwards, Futures
Discussion of Call and Put options
Different Pricing in the Derivative Market
Meaning of Hedging and Speculation
Overview of Credit default swaps

Technicals of Investment Banking:

Overview of Investment Banking
Role of Investment banker
Vertical and Horizontal Mergers
A sell-side deal lifecycle
Concept of due diligence
Overview of Greenshoe Option
Understanding of Corporate Restructuring and Turnaround

Different Marketing Collaterals:

Buyers list / Investors list
Non-Disclosure Agreement (NDA)
Pitchbook / Pitch deck
Teaser
Confidential Information Memorandum (CIM)
Financial Models

Technicals of Financial Modelling:

Introduction to the financial model
Preparation of different schedules, including equity, depreciation, debt, working capital and fixed assets.
Addition of cover page

Business Valuation:

Difference between GPC and GTM
Criteria to screen peers
Valuation multiples to be used
Ideal time to focus on, including Last Twelve Months (LTM), Next Twelve Months(NTM),
historical and projected years.
The related concept of NOPAT, changes in working capital, Capex adjustments
Concepts of controlling premium
NAV approach for valuation
Relevance of the approach
Presentation of valuation output
Concepts of pre-money and post-money valuation.
Different ways of calculating Beta

Module 1	MS PowerPoint	Module 5	Technicals of Investment Banking
Module 2	MS Excel	Module 6	Different Marketing Collaterals
Module 3	Financial System and Market	Module 7	Technicals of Financial Modeling
Module 4	Derivatives Market	Module 8	Business Valuation

Other Professional Courses from IIM SKILLS

Financial Modeling Course
Digital Marketing Course
SEO Course
Technical Writing Course
GST Course
Content Writing Course
Business Accounting And Taxation Course
Data Analytics Course

Course Details:

Course Details: 4 months + 2 month Internship

Course Fees: INR 49900 + GST

Contact No. +91 9580740740

Email: [emailprotected]

2. Corporate Finance Education (CFI)-

Corporate Finance Education is an online institute that helps its students to have a basic understanding of finance for any successful business growth. Well-designed courses with proper training in Investment Banking are given to the learners who opt for this course.

The Corporate Finance Education (CFI) training programs are designed in such a way that will also help you gain all the knowledge about Investment Banking vs Financial Services.

Financial Modelling Using MS Excel:

Financial Modelling and Valuation Analysis Program
Classroom/ Live Online Class/ Self-paced
CV Preparation and Mock Interviews
100% placement assistance
Weekend and Weekday batches

Financial Modelling Using MS Excel Curriculum Highlights:

MS Excel Training- Basic to Advance
MS PowerPoint Skills
Financial Statement Analysis
Business and Financial modelling
DCV Valuation
Comparable Company Analysis
Comparable Transaction Analysis
Introduction to Project Finance
Company Profile and Pitchbook
Capstone Project
Soft skills Training and Resume-building

Certificate in Investment Banking:

Financial Modelling And Valuation
Merger & Acquisition, Pitchbook, Fund Raising
Company Profiles and Industry Analysis
Equity Research Report Writing
Interview Soft Skills and CV Building
Weekend and Weekday Batches

Certificate in Investment Banking Curriculum Highlights:

MS Excel Training- Basic to Advance
MS PowerPoint Skills
Financial Statement Analysis
Business and Financial Modelling
DCV Valuation
Comparable Company Analysis
Comparable Transaction Analysis
Introduction to Project Finance
Company Profile and Pitchbook
Industry Analysis, Benchmarking and Charts
M&A Merger Modelling
Introduction to Credit Analysis
Introduction to Stock Market Investments
LBO Modelling (Optional)
Soft Skills and CV building

The Investment Banking Certificate from CFI Will Help You to Perform the role Successfully:

Investment Banking Research
Equity Analysis Research
Financial Advisory
Credit Analysis
Project Finance Modelling
Financial Analysis

Contact Details: +91 93542 66554

3. Indian Institute of Management Indore-

IIM Indore is an autonomous business school that ranks 8^th in the country for its world-class training courses designed to give placement opportunities to its students by helping them enhance their skills.

Their courses are designed in such a way that you understand the basic difference between Investment Banking and Financial Services of the financial market, which will help you understand your job better as an Investment Banker in any firm.

Highlights Of The Course:

Alumni executive education
Campus immersion module

Content Of the Course:

Financial Reporting, Analysis and Valuation
Financial Management
Investment and Portfolio Management
Investment Banking- 1 and 2
Mergers & Acquisitions
Options, Futures and Derivatives
Economic Environment
Spreadsheet Modelling for Finance
Industry lecture

Courses and Training Offered at IIM Indore are:

Accounting Fundamentals
Financial Statement Analysis
Financial Modelling
Corporate Valuation
Excel skills
Corporate finance
Mergers & Acquisition

Eligibility For The Course Completion:

Diploma or Bachelor’s degree or equivalent or 2 years Master’s degree or equivalent from a recognized university with minimum 50% marks of all the years.

Course Duration: 12 Months

Course Fees: INR 4,00,000

4. The Wall Street School-

The Wall Street School is a renowned Institute for Investment Banking. The syllabus is designed to help its students compete with the market standards with a deep understanding of Investment Banking and Financial Services.

It was founded in 2009 to provide world-class courses with the rise in Investment banking demand.

Highlights of the Course are:

Hands-on case studies and projects for training
Pay only 40% of the fees on the enrolment and 60% after the successful placement.
Batches are available as per individual convenience- weekday and weekend batch

The Modules Covered in this Course are:

Module-1Essential to Intermediate Excel:

Using the mouse in Excel
Sorting data to use advanced filters
Cell freeze, row freeze, and column freeze
Using conditional formatting
Linkages used for financial modeling
Match function
CAGR Calculation
Transpose function
Usage of the IF function
Table function
Pivot function
IRR Calculation
Cell referencing
Interest function as EMI calculator
Sum if, Count if, Sumifs
Sum product functions
Multiple usage of Vlook functions.

Module-3 Basic Finance Concepts:

Ratio Analysis of Financial Statements
3step and 5step Dupont Analysis

Module-4 Feasibility Study/Business Modelling:

Building dynamic business models from scratch

Module-5

Here you learn how to build a detailed trading comp right from selecting peers to analysing the final output.

Investment Banking Courses Abroad Near You That You Must Not Miss:

Investment Banking Courses in Nigeria
Investment Banking Courses in Thailand
Investment Banking Courses in Canberra
Investment Banking Institutes in Zurich
Investment Banking Courses in Rockhampton
Investment Banking Courses in Poland
Investment Banking Courses in South Korea

The Following Highlights of These Points Are:

Possible reasons for why different companies in the same sector are trading at different multiples and how to analyze those differences before jumping to the conclusions that a particular stock is undervalued or overvalued
Role of multiples in IPO valuation
Running regression analysis on multiple
How to select peers in case other listed companies are unavailable in the same space.

Module-6 Discounted Cash Flow Valuation:

Projection of free cash
How to calculate WACC
Different ways of calculating beta

Module-7 Merger Model:

Everything about the M&A Process
Why we need to learn PowerPoint
Basics of PowerPoint
Learning Letter of Interest
Learning Letter of Intent full
Learning Merger of Model Basics
Merger Model Files
M&A Notes

Module-8Leveraged Buyout:

LBO Model (Valuation)
LBO-Transaction assumption
LBO-Debt assumptions
LBO- Goodwill calculation
LBO- Closing Balance Sheet
LBO- Income Statement
LBO- Balance Sheet
LBO- CFS
LBO- Key metrics
LBO Files

Course Duration:

6 Weeks / 180+ Hours /Mon-Fri/ Rs 45000+GST
2.5 Month weekend/ 120 Hours/ Sat-Sun/ Rs 42000+GST

FAQs

1. What is the difference between Investment Banking and Financial Services?

Investment Banking and Financial Services are somewhere related but also have some distinct features as well. Some of the key differences include the scope of services, they have different client bases, different functions and rules and regulations of the financial market.

2. Are the skill set required for Investment Banking vs Financial Services similar?

The skill set required for Investment Banking focuses more on financial modeling, deal structuring, valuation, and strong analytical skills whereas Financial Services have a broader outlook and focus more on specific roles such as customer service, risk management, asset management, and more.

3. What is the career path in Investment Banking and Financial Services?

In the Investment Banking and Financial Services career path, an individual initially starts as an analyst progressing to the associate, vice president, and director then Managing Director whereas in Financial Services it depends on the type of organization, such as a teller in retail banking will be promoted and will be known as a loan officer in corporate banking.

4. What are the educational qualifications required for Investment Banking vs Financial Services?

Both fields Investment Banking and Financial Services requires typically a bachelor’s degree in finance, business or economics and a Master’s in Business Administration. The educational requirements vary with the specific role and might require some additional certificate.

Conclusions:

Investment Banking vs Financial Services are more or less the same field where financial services have a broader and wider aspect of the financial market. Investment Banking is a part of Financial Services. Investment Banking professionals mostly work in a team, collaborating with

financial experts to provide a fruitful solution to their clients. They should have a deep understanding of the financial market whereas Financial Services individuals may work independently or in a team, totally depending on the nature and requirements of the job. These individuals may be employed by insurance firms, banks, insurance companies or financial institutes. Appropriate credentials and experience are important for professionals to work as Financial Service professionals.