If you’re going to exhaust yourself working in a junior investment banking job, you might as well choose a sector specialism that will make it worth your while. While technology, healthcare, and financial institutions group (FIG) are the darling sectors for M&A in 2021, their career potential doesn’t necessarily match their hairstyles. FIG, in particular, is notorious for being a sector that can involve particularly long hours and be very difficult to escape from if you subsequently decide you’re more interested in something other than mergers between asset management firms.
The best sector for early career differentiation, according to bankers who work in it, is instead a hybrid between technology and FIG: fintech. Business Insider spoke to a plethora of top fintech bankers, all of whom enthused about how their sector is best dressed for the future and most likely to equip today’s aspirational young banker with a great career.
After a decade of slow evolution, fintech is, “coming of age,” said Jigar Patel, head of fintech and digital finance investment banking at Morgan Stanley. Fintech’s focus is changing over time and bankers coming into the sector need to anticipate this, he added: “Five years ago, everyone might have said, ‘You need to understand payments… Now, everyone is going to say, ‘You need to understand software.’ Five years from now, everyone may say, ‘You need to understand decentralized finance.’ It’s being able to identify these things within a company early on.”
Most of the fintech bankers interviewed (all but one of whom were men), were excited about the impact of COVID on their specialism (“While no one wants to profit from a pandemic, I think COVID has served as the ultimate use case for the application of fintech”), and excited again about the sector’s potential growth (“I see a lot of open road ahead.”). Most interesting, though, was the suggestion that if you specialize in fintech you can make a reputation for yourself early-on in a way that’s not as possible for bankers in more mature sectors.
Fintech is “a space where younger bankers can be successful in pursuing the business, and in some ways, being a career banker with 30 years of experience can sometimes be perceived as less helpful in building relationships,” said Brennin Kroog at Lazard. “It provides you an accelerated path to have the ear and dialogue with very key and senior decision-makers,” Koog added. “- A lot of clients that I have the benefit of knowing or having relationships with, if I were to work at that company, it may take me 20 years to be in a position of confidence to have those relationships.”
This is a claim made for jobs in most M&A sectors. In fintech it may be more true than for others.
Sarah Butcher – Read more on efinancialcareers.com