Just accepted a top MM SA ’27 offer, but I’ve increasingly been thinking about AI and how it might affect investment banking, day-to-day work, return offer rates, and even the risk of offers being pulled.
Would really appreciate you guys sharing your perspective on how AI could impact the role and what it means for someone starting out in IB.
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AI is undoubtedly reshaping the investment banking landscape, but here's what you need to know based on the most helpful WSO content:
Impact on Day-to-Day Work:
AI and automation are already being used to handle repetitive, time-consuming tasks like building financial models, running valuations, and processing large datasets. This means analysts will likely spend less time on grunt work and more time on higher-value activities like deal sourcing, relationship management, and providing strategic insights. While this shift can enhance productivity, it also means you'll need to focus on developing skills that AI can't replicate, such as interpersonal communication, critical thinking, and nuanced judgment.
Return Offer Rates:
While AI might reduce the need for some entry-level roles, it doesn't mean return offers will disappear. Instead, firms may prioritize candidates who demonstrate adaptability, technical proficiency, and the ability to leverage AI tools effectively. Building expertise in areas like data science or machine learning could give you a competitive edge.
Risk of Offers Being Pulled:
The risk of offers being pulled due to AI advancements is minimal in the short term. Investment banking is still heavily relationship-driven, and firms will continue to need talented individuals to manage client interactions and complex negotiations. However, as AI adoption grows, the industry may see a gradual reduction in headcount, particularly in roles that are more easily automated.
Long-Term Outlook:
Over the next 5-10 years, AI is expected to significantly enhance efficiency in investment banking. Some estimates suggest that the M&A workforce could see reductions of 20-50% due to automation and machine learning. However, senior bankers and those in client-facing roles will remain critical, as AI cannot replicate the human element of relationship-building and tailored advice.
What You Can Do:
In summary, while AI will change the nature of investment banking, it won't eliminate the need for talented individuals. By staying ahead of the curve and focusing on skills that AI can't replicate, you'll position yourself for long-term success in the industry.
Sources: Google partners with Goldman Sachs in automating Investment Banking, Future of Banking, Will robots replace your consulting or financial career?, Thoughts on AI and the future of the job market?
It will change the shape of the pyramid fs as current solutions pretty much overlap with current analyst work. I think there will def be less juniors. Would imagine this will materialize first in smaller SA before any layoffs
However, the industry itself is safe. No bank has ever won a deal because its juniors are good at making decks
Imo this actually makes the industry more interesting. Would imagine for the remaining junior, there will be more work using brain cells and less busy work.
I also think BBs will be hit sooner than EBs, as they typically has more juniors that does more busy work and BB are usually more cost-conscious
This path imo makes the most sense given where the tech is at rn, but no one knows where the tech will be in 5 or even 1 year. If you asked a New Yorker from the 1700s what life would look like living in skyscrapers, they would never be able to imagine elevators.
I'm also in college, so take my opinion with a grain of salt.But have been reading a lot recently on the topic as I'm also super concerned about starting FT in IB. Think the best we can do rn is to diversify our skills with the time we have left in college. It will be increasingly difficult when we start on the job.
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