Phone interviews in investment banking come in the early stages of the hiring process. At most bulge bracket firms and elite boutiques, phone interviews are typically the first round of the process and serve to filter out candidates. Getting a phone interview at top firms like Goldman Sachs, Morgan Stanley or JPMorgan means your resume, CV and online assessment results have demonstrated your potential. But to move to the next stage, you have to make a good impression during the call and prove you’re the right fit.
So how do you ace the phone interview and secure a spot for in-person interviews? Read on to know why this screening stage matters, how to prepare, common IB phone interview questions, and communication tips.
The investment banking recruitment process involves phone interviews because they work well for the firms. The top IB firms receive thousands of applications for a few roles. So, these first rounds of interviews help them assess qualifications beyond the resume, interest in the role and firm, and communication skills.
The interviews are called screens because the recruiter or company’s team is trying to see if you check the boxes before moving you to the next stages of the hiring process. Here’s a deeper overview of why phone screens matter in investment banking and how you can align with that to present yourself as the most suitable candidate.
➡ Low Cost Initial Screening
In-person interviews are costly for investment banking firms. That’s why they screen candidates using phone calls since it’s a quick and cheaper way of eliminating those who don’t check the boxes. To come off as qualified, you must know what the firm is looking for, which is often on the job description and company’s website, and personalize your responses accordingly.
➡ Testing Your Communication Skills
Part of your job as an investment banker will be articulating ideas to clients and colleagues in a simple, clear, and concise manner. The phone interview tests if you can communicate your thoughts clearly, professionally, and confidently.
Besides assessing your verbal clarity, they also test your active listening skills and responsiveness. This is important in IB because you may have to listen to clients’ or senior bankers’ questions carefully and respond thoughtfully.
➡ Testing Your Technical Readiness
Phone interviews contain a mix of behavioral and technical questions. Even if you’ve said you have the relevant technical skills, experience, and education in your resume, the questions you’ll get during the phone interview helps the interviewer assess how you’re able to put it all into practice.
👉 Check out our guide to Technical Questions in Investment Banking Interviews and prepare effectively.
➡ Checking if You Have a Good Personal Fit
Another reason phone interviews matter is that they confirm if you’re a good fit for the firm. They do this by asking behavioral and fit questions like why you prefer investment banking or about a time you handled pressure at work. This helps the interviewer see whether you'd fit in team and work environment.
One of the benefits of a phone interview is that you can’t see the person you’re talking to, which makes it less intimidating. However, that doesn’t mean you should take it lightly. You still need to be well-prepared for phone interviews by doing self-study, conducting mock interviews, working with expert coaches, and assessing your phone condition.
Do Self-Study Sessions.
To ace phone interviews in investment banking, take some time to prepare alone. Your preparation should include:
Practice with Mock Interviews.
As you practice the most commonly asked questions during your self-study, everything may feel right. But articulating your responses when talking to someone else on the phone is a whole different experience.
So, do mock interviews with peers to get valuable feedback and get comfortable articulating your thoughts verbally. The more sessions you do, the more confident you’ll become, including during the day of the actual interview.
👉 On our Meeting Board, you can find peers to practice with for your phone interview.
Work with an Expert Interview Coach
Once you feel confident enough, you should consider working with an interview coach. Even one mock interview with an expert can help you increase your chances of landing the job because they are more likely to mimic the company’s recruiter or team more realistically. Then they will provide valuable and personalized feedback that lets you know where you’re doing well and where you need to improve.
👉 Have a look at our Coach Directory if you want to work with an expert to level up your skills.
Check That Your Phone Is Working Well.
Ensure your phone is working well, especially the mic. The last thing you want is to keep asking the interviewer to repeat the question or for the interviewer to keep saying they can’t hear you. This can be irritating and cause the interview to end prematurely, reducing your chances of making it to the next step.
You can expect different types of questions during your interview that inquire about your behavioral and technical skills. It’s also common to get market-related questions. Here are a few examples and possible answers. However, you can always tweak the responses to suit you.
Question: Why have you chosen investment banking as a career?
Possible answer: "I knew I wanted to work in finance because of my interest in analyzing businesses, strong numerical and analytical skills, and desire to solve complex financial problems. But my interest in investment banking sparked during my first internship where I saw how bankers help support companies in making strategic decisions that also impact the economy. My other internships that followed confirmed my interest and fit for the fast-paced industry."
Question: How do you cope with high-stress situations?
Possibe answer: "During high-stress situations, I do my best to prioritize tasks, break down complex problems into manageable steps, and increase my working speed. I also rely on teamwork to ensure I meet deadlines efficiently while maintaining high-quality work.
For instance, I got a last-minute request to compile market data for a client pitch during one of my internships. I had to deliver accurate and comprehensive data within three hours. In response, I listed down the steps to follow, prioritized tasks, utilized Excel shortcuts, and communicated with my supervisor at every step to minimize errors and seek clarification. Within three hours and about five minutes, the data was ready and the responsible individual was able to make a successful client presentation."
Question: What is the appropriate discount rate to use in an unlevered discounted cash flow (DCF) analysis?
Possible answer: "The appropriate discount rate for an unlevered DCF analysis is the Weighted Average Cost of Capital (WACC). WACC accounts for both the cost of debt and equity, weighted by their respective proportions in the company's capital structure. It reflects the required return for all investors and is used to discount the company’s free cash flows to determine its enterprise value."
Question: What is a company’s beta and how do you calculate it?
Possible answer: "A company’s beta measures its volatility relative to the overall market, indicating its risk level compared to a broad index like the S&P 500. It is calculated using regression analysis of the company's stock returns against market returns."
Question: Why should we hire you?
Possible answer: "You should hire me because I have a strong foundation in finance, a strong work ethic proven through my previous work experience, and my proven interest in investment banking evident through my course choices and internships. I believe that my analytical skills, attention to detail, and ability to collaborate effectively make me a suitable fit for this bank."
As we mentioned earlier, phone interviews are all about your ability to listen carefully and respond clearly. Some tips to keep in mind include the following:
IB firms use phone interviews to determine if you have the skills, knowledge, and personality they’re seeking. Practicing common investment banking interview questions and doing your homework on the company can help you stand out . The interviews contain a mixture of technical, behavioral, and market-related questions. Listen carefully, respond clearly, and ensure your answers show why you’re the right fit.
