How to Ace the Intern Interview at Bank of America?
Congratulations on getting an opportunity to interview for the position of Intern at Bank of America. The bad news is that the interview process can be quite difficult. This blog article will list out a several tips and tricks to help you ace your upcoming interview.
1. Start by Studying the Interview Process at Bank of America for the Position of Intern
Before going into your interview, it vital to understand the interview process at Bank of America. This will help you plan your strategy and you won't be surprised through the interview process.
The Bank of America Intern interview process is as follows:
The interview process at Bank of America starts with a phone screen or an on-campus meeting with a recruiter.
Once selected, you will be asked to do up to two additional in person screens or phone interviews with different people from the hiring group. One of these will be with the hiring manager for the position. Questions in these interviews are a combination of behavioral, situational and case type questions. Additionally, theoretical finance related questions are an important part of the interview process. Pay special attention to both the case type and finance type questions as it could mean the difference in moving ahead or not. Assuming these go well, you will be invited onsite for a full round of interviews. Expect to have between 5-6 interviews. These interviews are 45 minutes to an hour each and are conducted with various members of the hiring committee. Questions are similar to the initial screen. Focus on case, situational, behavioral and finance questions. The interview process takes 2-3 weeks end to end.
2. Study the Banks and Credit Unions industry in detail.
Bank of America operates within the Banks and Credit Unions industry. So, it is vital to understand this industry in detail before going into the interview.
Here are industry details for the Banks and Credit Unions industry:
Industry Name: Banks and Credit Unions
How large is the industry and what is the projected growth rate of the industry?
The global banking sector is considerably healthier now than it was 10 years ago, at the start of the global financial crisis. The largest banks in the world have significantly improved their capital position in the years since the crisis. While there is lingering debate in some corners that banks are still not sufficiently capitalized, it is undeniable that the dangerously thin buffers of the pre-crisis era — where the Common Equity Tier 1 (CET1) capital ratio was below 4% for some banks — are gone as banks have raised additional equity over the last decade to almost treble their capital. Resilience has also been supported 2,000 by the development of recovery and resolution plans (RRPs) as mandated by regulators globally.
While it is true that the cost of compliance has risen dramatically since the crisis, at the start of 2018 we believe the industry has crested the peak of regulatory-driven investments in systems and LHS talent. Although compliance costs are set to remain elevated from their 2007 levels, we believe the cost of adapting to the post-crisis prudential regulatory framework has stabilized and is set to decline.
Further, most banks have resolved the vast majority of legacy conduct issues. Litigation expenses are falling (Figure 2), and although banks continue to reshape their footprints (Figure 3), they are also signaling that the associated restructuring costs will soon peak.
Revenue for the Commercial Banking industry finally returned to growth, after declining every year since 2008. Declining revenue over the first three years of the period is attributable to the effect that the subprime mortgage crisis had on the banking sector. Despite a strong 2015 and 2016, the industry struggled over the five years to 2017, increasing sluggishly; however, profit margins have been on the rise. Significant consolidation in the industry over the past five years has resulted in many unprofitable banks exiting the market.
Total Revenue in the industry stands at about $600B (+0.9% Year over Year), employing 2M people across 80,300 businesses.
Bank of America
Customer Centricity: Long-term sustainable growth in the banking industry seems only possible with a radical departure from a sales-obsessed and product-obsessed mindset to one of genuine customer centricity, and further rationalization of strategies to target the right markets, customer segments, and solutions.
Although banking has undoubtedly improved in many ways in the last couple of decades, most organizations have not gone through the customer-centric transformation that other industries have undergone. With widespread digital disruption, banks may even risk losing control over customer experience.
Of course, many banks, global and local, large and small, have changed their market and customer strategies since the financial crisis. Many of these decisions may have been forced upon them by regulatory expectations, and perhaps are not necessarily grounded in a refined understanding of markets and customers. As figure 3 shows, banks’ focus on customer experience, at least in the United States, does not appear as widespread as one might expect.
Fortunately, most banks seem to have realized that a growing fintech ecosystem, once perceived as a threat, can actually be a boon for helping them serve their customers, both through emulation and collaboration. Fintechs, with their laser-sharp customer focus, have shown that it is possible to meet, and arguably even exceed, customer expectations.
But technology is typically only part of the solution. The core objective for most banks is to achieve organizational agility, and to do so they should consider embracing innovation, managing talent differently, and pursuing key partnerships within a broader ecosystem to manufacture and deliver solutions for customers.
Regulatory Recalibration: 2018 presents an opportunity to modernize regulatory compliance and bring together disparate silos created for individual compliance goals.
After a decade of intense scrutiny by regulators globally, banks seem to be sensing some stabilization. At least in the United States, new rulemaking appears to have abated. There are also signs of divergence among national regulators, who, after a period of unprecedented coordination following the financial crisis, appear to be pursuing paths suited to regional and national priorities. For example, many global firms are dealing with varying local market needs and regulatory mandates, and more recently, with differing views on key prudential regulations, such as the still-pending aspects of the Basel III regime.
But expectations of a broad regulatory pullback could be misplaced. Some US regulations are being reviewed and may be amended, such as the Volcker Rule, regulations around governance expectations of bank boards, and the size threshold for systemically important institutions. However, higher capital and liquidity requirements, stress testing, and recovery and resolution planning will likely remain intact. Compliance expectations, especially around fair treatment of customers and executive accountability, are expected to stay elevated. Regulators are also expected to maintain vigilant enforcement programs and to demand more data from banks to test the operational integrity of complex institutions—especially when under stress.
In Europe, the Markets in Financial Instruments Directive II regime and proposed EU rules to establish intermediate holding companies—similar to those required under US regulation—should continue to be significant priorities for global banks. Additionally, the second Payments Service Directive (PSD2) regime could have spillover effects across geographies. Data protection rules, especially the General Data Protection Regulation, should further add to the compliance burdens.
So how can banks operationally achieve this modernization? Consider integrating regulatory compliance goals—from the standpoint of ownership and accountability—with strategic initiatives such as growth, operational simplification, risk management, and cost efficiency. Simply put, regulatory compliance should be aligned with business strategy. Not doing so could put banks at risk of unmet regulatory expectations and subpar performance.
Regulatory compliance should also figure prominently into the “portfolio of change” that banks need to make and manage—at both the individual business and enterprise level. This portfolio of change requires leaders to consistently apply a standard of due care in managing businesses. Heightened focus on executive accountability is also being codified in regulatory expectations such as the Senior Managers Regime in the United Kingdom.
Technology management: To help banks become more agile, bank chief intelligence officers (CIOs) should manage their portfolio of technology assets to emphasize activities that truly differentiate the bank. Externalization efforts should be focused on generic functions with an emphasis on cost efficiencies.
Technology resources at most banks are becoming difficult to manage, with a hodgepodge of systems, platforms, software, and tools—much of it legacy infrastructure that demands significant resources and capital to ensure that operations run smoothly. As such, modernizing core operating infrastructure is an obvious priority. Modernization ranked as the most important information technology (IT) trend for nearly a quarter of global banking respondents in the 2016 Ovum ICT Enterprise Insights survey.
To “change the bank,” CIOs have to simultaneously ensure that new solutions sourced from multiple external vendors are integrated to maximize value creation, while minimizing internal disruption. To make this happen, tech budgets at banks will likely continue to expand; Gartner’s research shows the global banking industry will spend $519 billion on IT in 2018, up 4.1 percent year over year from $499 billion in 2017.
Money itself is not typically enough. In their drive to simplify and modernize, and to build technology agility, banks should ask themselves three important questions:
· How can they best manage the portfolio of technology assets to deliver the most impact for businesses?
· What is the right level and type of technology externalization (i.e., the use of third-parties to design, develop, and manage technology solutions)?
· How do they direct development resources toward only the activities that truly create competitive differentiation?
Fortunately, the proliferation of technology vendors and platforms, and the maturation of cloud solutions, has made technology externalization more viable. Of course, this is not a new concept for banks, but there is often a need for a significant ramp-up in externalization to ensure that the institution remains competitive in the marketplace. Banks’ technology groups can play a key role in orchestrating this new model of externalization, and ensure that these efforts have the greatest business impact.
Admittedly, externalization is not the answer for every core activity—there will still be some activities, such as compliance and risk management, that will usually be maintained internally, and for which internal technology support would remain critical.
Managed services for mission-critical activities that require specialized technical talent, but offer limited competitive differentiation to the firm, are one example of externalization. Additionally, external service providers could automate compliance processes to eliminate hours of manual labor, but with bank employees handling the final layer of analysis and reporting to maintain accountability to regulators.
An externalization strategy typically also means more discipline in selecting technology vendors, with greater emphasis on high-quality software asset and business expertise (in mortgage servicing versus demand-deposit-account processing, for instance). Multi-business institutions may prefer a hub-and-spoke model—with a wide variety of domain-specific third-party relationships—and reconfigured vendor contracting, risk management, and oversight practices, accordingly.
Externalization can also play a pivotal role in application modernization—in the form of rationalization, re-platforming, refactoring, or rewriting code, and enabling platforms to migrate to the cloud.
In 2018, we expect a “modest step to a big leap” in the way technology units within banks begin to transform themselves and redefine both their role and value within the organization. Breaking institutional barriers to such change may prove to be a big challenge.
Mitigating cyber risk: The potential for cyber risk has been increasing with greater interconnectedness in the banking ecosystem, rapid adoption of new technologies, and continued reliance on legacy infrastructure designed for a different age.
These challenges are generally well-recognized—cyber risk is a top concern for financial services risk managers.12 Staying ahead of changing business needs and addressing threats from increasingly more sophisticated actors are top challenges for executives.
This level of maturity is also reflected in the way cyber risk is currently managed at many banks. In particular, funding for cybersecurity continues to increase and there is greater cooperation among banks, counterparties, and regulators, including sharing of information and best practices. Also, many banks have been able to recruit specialized talent into their cybersecurity units.
Yet cyber risk is only getting more complex, and in ways that are not fully understood and predictable by many. Hence, there is more to be done to make sure that cyber risk is baked into the bank’s operations ex ante, as opposed to ex post. That begins with building a robust culture of due care across the organization, and ensuring that cyber security is a key consideration in the design of business processes, strategy, and innovation.
Since the transformation underway in many banks is largely technology-driven, they should ensure cyber risk is explicitly considered and managed in every aspect of change—whether overhauling legacy systems or adopting new technologies. This focus on cyber risk as a critical element in almost every aspect of business will have numerous benefits. This includes the ability to improve speed to market and the ability to make firms more resilient and responsive to market needs, which is the very definition of agility. In short, cyber risk should be a core decision-making factor in everything banks do to transform and become agile.
For example, as automation kicks into high gear through robotic process automation (RPA) and cognitive technologies, developing cyber security protocol in the design and oversight of these systems will be key. Similarly, as banking inevitably intersects with the Internet of Things (e.g., smart watches, artificial intelligence (AI) devices); cyber risk will have to become a dominant component in every decision. Open application programming interfaces (APIs) are another example of cyber vulnerability that will need particular attention.
As it relates to regulations, banks could be leaders by exceeding mandatory state and federal regulatory compliance directives and ensuring robust cyber risk management systems.
Fintechs and big techs: Fintechs continue to lead innovation in the banking industry by sharpening their focus on customer experience. Banks face a number of choices: replicate what fintechs are doing, respond with equally innovative solutions, become more symbiotic and less competitive, or pursue a mix of these strategies that fit their unique capabilities and market positions.
Although fintechs have undeniably made their mark on the banking industry, many would agree that they have “failed to disrupt the competitive landscape.” It seems premature to view fintechs and other nonbank players through the disintermediation lens. Incumbents will likely maintain market leadership due to three factors that work in their favor:
· Regulatory barriers to entry
· The natural inertia of customers to switch
· The capital to absorb, partner with, or replicate fintechs
· However, it should be acknowledged that many fintechs have created innovative solutions that “are setting new and higher bars for user experience.” But what these fintech and other nonbank tech players in the banking space appear to represent is perhaps a changing ecosystem.
As for technology behemoths’ acquiring banking charters and posing a threat to incumbents, achieving regulatory compliance and inducing customers to switch can be daunting tasks. Instead, these firms will likely be more successful servicing and partnering with banks, especially in the area of data sourcing, data analytics, and cognitive technologies.
Learning from fintechs and technology firms could also help banks rethink their competitive benchmarking. As fintechs and other nonbank players encroach on various business lines (e.g., lending, payments, trading, wealth management), it may behoove incumbents to compare with those they consider best-in-class in terms of the capabilities and solutions. This expansive view of competition can make them less vulnerable to future threats.
To this point, banks can develop a more nuanced approach to fintechs by disaggregating the impact of fintechs on various business functions, including operations, finance, and marketing. Exploring open APIs can also be important, as open banking would speed the integration into the rapidly morphing fintech-based ecosystem. The all-important byproduct of all of these efforts would be that incumbents become more adept at developing solutions that customers (existing and prospective) want and need.
Reimagining the workforce: Banks should consider rethinking their workforce strategy given how work is evolving—with increasing automation and greater diversity in the labor pool.
There is little doubt that automation is rapidly transforming work, and advances in technologies such as quantum computing will likely only accelerate this change. A seemingly natural reaction to the inevitability of an increasingly automated world could be to speculate about the impact on jobs, yet alleviating “automation anxiety” in banking is far from new. For example, ATMs allowed banks to reorient tellers to sales and advisory roles from purely transactional activities.
The future workforce is expected to also be more diverse than it is today. In addition to permanent employees and contractors, it will likely include freelancers who work with multiple banks, fintech hackathoners to generate novel solutions, and even robots that work alongside humans.
While it is tempting to think that technical talent might be all that a bank really needs to succeed in a technology-driven world, it would be short-sighted to ignore the value of enduring human skills. Banks should continue to align the organization more deliberately with the values of employees as part of corporate social responsibility and environmental, social, and governance (ESG) efforts.
How prepared are institutions for this transformation? So far, only 17 percent of global executives across all industries, let alone banking, responding to the Deloitte Human Capital Trends survey say they are ready to manage this diverse workforce of people.
Bankers would need upskilling to work more effectively in a digital environment, according to the MIT Sloan Management Review and Deloitte Digital’s global study. One global example is Singapore’s DBS Bank, investing SG$20 million to train its existing workforce in digital banking and emerging technologies, via an AI-powered e-learning platform, curated curriculum, and module delivery.
As part of this transformation, banks will likely need to reorient existing workforces to be collaborative and inclusive, while providing them with more integrated employee experiences—from recruitment to retirement—to mirror the richer customer experience that the workforce is enabling. This workforce experience would have to be designed to accommodate a work-life balance, a purpose-driven career, and of course it should be digitally enabled.
3. Study Bank of America in detail.
Next you must ensure you understand Bank of America in detail. You will be asked tons of questions regarding Bank of America, so it's best to be prepared. Here are company details for Bank of America that you must prepare for:
Target Company Name: Bank of America
“We are positioned to deliver long-term value to our shareholders, thanks to the straightforward way in which we serve our clients through our responsible growth strategy.”
“Our purpose is to help make financial lives better, through the power of every connection.”
“At Bank of America, our culture comes from how we run the company every day. At the heart of our responsible growth strategy is our commitment to “act responsibly,” which includes our commitments to ethical behavior, acting with integrity and complying with laws, rules, regulations and policies that reinforce such behavior.”
“Our purpose and values form the foundation of our culture — a culture that is rooted in integrity, disciplined risk management, and delivering together as a team to better serve our clients, strengthen our communities, and deliver value to our shareholders.”
List of Products/Services:
List one Favorite product and give 3 reasons why that product is good?
· No annual fee
· Low introductory APR on balance transfers
· No foreign transaction fees
List one disliked product and 3 reasons why it is bad.
· $2.50 transaction fee for using non-Bank of America ATMs
· $35 fee per overdraft or returned item
· Monthly checking account maintenance fees if you do not meet qualifications
Target Customer Segments that Bank of America is targeting.
Bank of America targets all 50 US states, the District of Columbia, the US Virgin Islands, Puerto Rico, and in more than 35 countries. It targets customers ranging from individual, to small business to multinational companies. Bank of America's retail banking serves some 47 million customers and small businesses in the US, and is within reach of 80% of the US population.
Target Customer Demographics for Bank of America.
Bank of America is currently targeting wealthiest clients, with plans to add more than 100 financial advisers who cater to the super-rich. It is also targeting millennials who are office goers.
What do customers like about their Products/Services?
· As the third largest bank in the U.S., it offers a variety of financial products and services for individuals and businesses.
· Along with basic banking products like checking and savings accounts, Bank of America customers also have access to investment products like IRAs and CDs.
· There are thousands of Bank of America locations, which is just one of the bank’s many highly convenient offerings.
What do customers dislike about their Products/Services?
Bank of America overdraft fees is negative feature. A 2015 analysis by SNL Financial and CNN Money showed that Bank of America was one of three top banks that made a combined $6 billion off their customers’ overdraft charges.
It competes with banks, thrifts, credit unions, investment banking firms, investment advisory firms, brokerage firms, investment companies, insurance companies, mortgage banking companies, credit card issuers, mutual fund companies, and e-commerce and other Internet-based companies.
What do Competitors’ do better than Bank of America?
Ally Bank offers 1% APY for their savings account, while Bank of America offers 0.01% to 0.03% APY.
What does Bank of America do better than Competitors?
· Bank of America offers fraud monitoring and $0 liability protection in the event customer’s card or information is used without authorization. There are thousands of Bank of America locations, which is just one of the bank’s many highly convenient offerings.
· Bank of America offers a variety of channels through which customers can contact bank representatives. The bank’s FAQ section on its website also offers answers to non-specific questions about accounts.
Management Team (CEO, COO etc.)
· Brian Moynihan - Chairman of the Board, Chief Executive Officer
· Dean Athanasia - President, Preferred and Small Business Co-head, Consumer Banking
· Catherine P. Bessant - Chief Operations and Technology Officer
· Paul M. Donofrio - Chief Financial Officer
· Thomas K. Montag - Chief Operating Officer
Revenue this and last year: $93,662M (2016) and $93,056M (2015)
Gross Profit this and last year: NA
Gross Margins this and last year: NA
Net Profit this and last year: $17,906M (2016) and $15,888M (2015)
Net Margins this and last year: 19.12% (2016) and 17.07% (2015)
Growth Rate: 1% (2016) and -2% (2015)
Which products/services contribute to the most growth? Consumer Banking (38%); Global Banking (22%); Global Wealth & Investment Management (21%); Global Markets (19%)
Any other metrics e.g. Active Users: NA
Company’s Future Growth Plans (Where are they investing?)
Plans nearly $200 million in philanthropic investments in communities around the world
Invest in their workforce and create an environment where they can thrive.
Bank of America today introduced industry-leading person-to-person technology to its award-winning mobile platform, as part of its broader strategy to propel the industry into the next generation of digital banking services. 22-Feb-2017
Plans to add more than 100 financial advisers who cater to the super-rich as part of its strategy to grow wealth-management revenue, 31-May-2016
4. Study the Job Description for the Position of Intern at Bank of America.
The job description is a vital piece of the interview process at Bank of America. The job description can be used as the language of the company. Here is what we recommend.
1. Print out the job description.
2. Highlight the key responsibilities within the job description.
3. Think about times in your career or personal life where you've shown or performed those responsibilities.
It is almost guaranteed that you will get questions related to these responsibilities, so why not prepare for them in advance.
You can practice with the job description below:
Note: This is a sample Bank of America Intern position. Please get the appropriate JD for the position you’re interviewing for and conduct this exercise.
Do you love following the markets? Are you interested in evaluating risk and making real time decisions? Our Global Markets summer internship program offers you the opportunity to be part of one of a leading Global Markets business offering sales and trading services, including research, to institutional clients across fixed-income, credit, currency, and commodity and equity businesses.
Global Markets Summer Associates will have the opportunity to be placed with a specific team. Roles and responsibilities vary per desk but offer summer associates the opportunity to interact across the team, partnering closely on key projects and develop a deep understanding of each group’s core business practice.
Your responsibilities as a Summer Associate may include:
· Developing and maintain financial cash flow models, using proprietary and industry standard software
· Supporting various financial analyses, including bond structuring
· Performing comprehensive and in-depth client and credit research
· Preparing presentation and other materials for clients
5. Practice the Top Questions and Answers consistently asked.
Finally, you must practice the top questions that have been consistently asked as part of the Intern interview at Bank of America. Here is a list that you should be prepared for:
What are Financial Statements of a company and what do they tell about a company?
Explain Cash Flow Statement in detail
Explain three sources of short-term Finance used by a company
Define Working Capital
A company buys an asset; walk me through the impact on the 3 financial statements
What is EPS and how is it calculated?
Different types of EPS
What is a difference between Futures Contract and Forwards Contract?
What are the different types of Bonds?
What is a securitized Bond?
What is Deferred Tax Liability and why it might be created?
What is Financial Modeling in Corporate Finance?
What are the most common multiples used in valuation?
Describe WACC and its components
Describe P/E Ratio
What are Stock Options?
What is DCF method?
What is a Stock Split and Stock Dividend?
What is Rights Issue?
What is a clean and dirty price of a bond?
Hope this helps.
Till next time,
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