The goal of business financing is not only to properly manage a company's finances but also to find the best practices to minimise financial risk. Both corporate finance ad investment banking is ways in which businesses can ensure better returns to their shareholders.
In the current money market, investment banking and corporate finance are both integral for businesses. And even though these two have quite a few similarities, they are also different in a lot of aspects. In this article, we will walk you through the relationship between corporate finance and investment banking. You can also avail of online banking certification course for a better understanding of financing and banking.
Table of Contents
- 1 What is Corporate Finance?
- 2 What is Investment Banking?
- 3 What are the Similarities Between Investment Banking and Corporate Finance?
- 4 What are the Differences Between Investment Banking and Corporate Finance?
- 5 How to Build a Career in Investment Banking and Corporate Finance
What is Corporate Finance?
Corporate finance refers to functions and operations that organisations use to ensure long-term financial security and success. Starting with sourcing funding for the business, the main goal of corporate finance is to maximize the value of the firm. It is a term used to describe all activities related to funding, investments, and returns on capital.
Corporate Finance has a lot of different designations and job roles within it. Financing a corporation needs a lot of different professionals to work together. Account Managers, Accountants, Treasurers, Advisors, etc are only a few of the job designations found in Corporate Finance.
What is Investment Banking?
Financial institutions like Investment Banks help businesses raise their capital through securities operations in equity and debt markets. Corporate functions like acquisitions and mergers are also done through Investment Banking Firms. If an organisation has a lot of valuable assets, these firms also work as financial advisors to maximize returns on those assets and also keep them secure. It lets businesses safely publicize their securities and raise their funds.
A lot of people working in the finance industry choose to work in Investment Banking. It is one of the most coveted fields and also offers great career growth.
What are the Similarities Between Investment Banking and Corporate Finance?
Investment Banking and Corporate Finance are similar in a lot of ways.
- Firstly, both of them are ways in which a company can safely and organically grow its assets. Both Corporate Financing and Investment Banking help organisations manage their assets.
- Albeit with different structures, both of them also manage a firm’s investment-related repayments and returns.
- Anybody working in these fields needs qualifications like a Bachelor’s or Master’s degree. Sometimes they also need a professional background and experience for some job roles. There are also a few common jobs between the two fields.
What are the Differences Between Investment Banking and Corporate Finance?
Even though there are quite a few similarities between them, Investment Banking and Corporate Finance are different in many ways.
- Firstly, you have to remember that the goal of Investment Banking is the growth of an organisation while the goal of Corporate Finance is to manage and secure finances.
- The main aim of a Corporate Finance professional is to properly handle business goals and perform everyday financial tasks. On the other hand, the main aim of an Investment Banking professional is to raise capital for investors.
- People who want to work in Investment Banking usually need higher education and more professional experience than those who work in Corporate Finance.
- As a result, Investment Bankers usually earn more money than Corporate Finance professionals, especially those in higher positions.
How to Build a Career in Investment Banking and Corporate Finance
Both Corporate Finance and Investment Banking offer great opportunities for career growth.
Corporate Finance Professional:
To become a professional in Corporate Finance, you can choose a lot of different educational paths. Since the field is so diverse and offers so many distinct job roles, it is easy for a lot of people to get into the field and gain experience. You would need a great understanding of how Corporate Finance works and also possess some soft skills like communication and leadership. It also helps to have a Bachelor’s or Master’s degree in a finance-related field.
Having prior professional experience as an accountant or banker can also help you secure a job in Corporate Finance. There are many available job roles in Corporate Finance like, Credit Manager, Cash Manager, Cost Analyst, Financial Analyst, Benefits Officer, Treasurer, etc.
Investment Banking Professional:
Investment Banking is a premium field and requires a lot more academic experience than Corporate Finance. The best way to get into the field of Investment Banking is to get an MBA degree in a finance-related field after your graduation. You can get into the field as an associate and slowly build your career. You can also do internships and work in small-scale banks to gather all the professional experience you need in the field.
There are many job roles available in the Investment Banking field as well. Depending on your qualifications and interests, you can choose to work as a Private Equity Associate, Business Analyst, or Financial Analyst. There are also many online courses available for students and professionals who want to learn Investment Banking.
Corporate Finance and Investment Banking are two fields that are very closely related to each other. Usually Investment Banking firms have a Corporate Finance division to maintain their finances and help large corporations. Since they are so closely related, it is not uncommon for professionals from both fields to work in another field.
But if you want to become a trained professional in Corporate Finance or Investment Banking, then there are many online courses that can help you do so. One of the best Investment Banking courses is the Certified Investment Banking Operations Professional course by Imarticus Learning. With the help of online live sessions, job guarantee, career support and a world-class curriculum, the course can help you get acquainted with Investment Banking and concepts such as Anti-money laundering and foreign exchange, while also offering you great placement opportunities.