How to prepare for online tests in investment banking interviews

If you are applying for an internship or a position in investment banking, you will likely face the crucial step of online testing. These assessments, designed to evaluate your technical, analytical, and behavioral skills, are often eliminatory and represent a significant challenge for many candidates. This article provides you with everything you need to know to approach these tests with confidence and maximize your chances of success.

What types of online tests are common in investment banking?

Online tests vary depending on the banks and platforms used (SHL, Korn Ferry, Talent Q, Maki Assessment, Pulsifi, etc.) but generally include psychometric, personality, and/or technical tests.

Psychometric tests: These time-limited tests assess cognitive abilities and include:

• Numerical Reasoning: Interpreting charts, tables, ratios, and performing quick calculations.
• Logical Reasoning: Identifying patterns or sequences in figures.
• Verbal Reasoning: Analyzing and understanding written texts.

Technical Tests: for investment banking roles, technical questions often include valuation methods (DCF, comparables), financial statement analysis (balance sheet, income statement, cash flows), investment analysis (NPV, IRR),

Personality tests: these measure your behavioral traits to ensure you align with the company culture. There are no right or wrong answers; the key is to align your values with those of the bank.

Situational judgment tests (SJTs): these tests simulate real workplace scenarios to evaluate your judgment, interpersonal skills, and problem-solving abilities.

Video Exercises: some banks, especially large American ones, include video responses. These assess your communication skills, professionalism, and ability to structure clear and concise answers.

How to prepare effectively?

1. Reach out to former interns: contact former interns to understand the content, format, and importance of the tests.
2. Practice online: use platforms like GraduateFirst for psychometric or technical test preparation. You can also ask tools like ChatGPT to generate practice exercises.
3. Review technical fundamentals: focus on valuation methods (DCF, trading and transaction comparables), accounting (financial statements, impact of transactions), ratio analysis (liquidity, profitability, leverage), investment analysis (NPV, IRR)
4. Practice under time constraints: most tests are timed. Train to read charts and tables quickly, perform mental calculations, and solve logical problems efficiently.
5. Prepare for video exercises: to excel: structure responses using the STAR method (Situation, Task, Action, Result), improve oral communication: be clear, concise, and professional, and record yourself to refine your body language and tone.

Success in online tests for investment banking requires thorough preparation and effective time management. These assessments not only measure your abilities but also provide an opportunity to demonstrate your dedication and motivation for joining this demanding sector.