Serious Question - Why do banks care about modelling skills?

Why don't these smart people just teach themselves how to make financial models if they know that banks care?

saves money on teaching

I am extremely confused as to why banks care about whether people know how to use excel/make financial models.

Surely they should be looking for the smartest candidates who can pick stuff up and learn quickly rather than those who have experience in modelling (which I think is really easy for a smart person to learn).

In my mind this means that banks end up with loads of people with finance degrees and people from LSE/Warwick (where these skills are taught) rather than the smartest people being hired.

I wonder what people think?

Because you have a degree to do and not enough time to learn a model inside out..

Because you have a degree to do and not enough time to learn a model inside out..

******** excuse. You'll make the time to do something that is important to you. Financial modelling didn't feature in my studies at all, I made a deliberate effort to learn it, just like many do.

Accounting, modelling and valuation is the fitness test of IB. You know what's expected of you and the information is readily available online. If you aren't willing to prepare accordingly then you clearly aren't that interested in the role.

Just to clarify I don't want to do M&A...

I just don't think it attracts the best candidates.

Because you have a degree to do and not enough time to learn a model inside out..

I am extremely confused as to why banks care about whether people know how to use excel/make financial models.

Surely they should be looking for the smartest candidates who can pick stuff up and learn quickly rather than those who have experience in modelling (which I think is really easy for a smart person to learn).

In my mind this means that banks end up with loads of people with finance degrees and people from LSE/Warwick (where these skills are taught) rather than the smartest people being hired.

I wonder what people think?

Among candidates from a top 5 uni doing a somewhat respectable subject, average intelligence does not vary that much. Do you really think an Oxford maths student is vastly more intelligent than an LSE economics student? Also, in terms of learning speed, it seems very unlikely that a top maths student will be able to learn drastically faster than a typical economics/finance student. I don't believe there is that much innate genetic difference in people's ability to pick up banking concepts. Having said this, those that have modelling knowledge already have a head start and have demonstrated their interest by taking an active approach to their learning regarding banking. LSE economics students are busy people too, even if their course is less "intellectually challenging" than Oxford maths.

By the way, there are absolutely no modules at Warwick that directly teach modelling properly, neither in the business school nor in maths/economics. I imagine LSE is similar. If anyone disagrees, please post the module code.

In terms of modelling, IBD interviews typically only cover basic discounted cash flow analysis and leveraged buyout structure. Often the interview won't even cover that. In terms of accounting, questions regarding basic financial reporting, the 3 statements and treatment of specific items such as convertible bonds may be asked.

Among candidates from a top 5 uni doing a somewhat respectable subject, average intelligence does not vary that much. Do you really think an Oxford maths student is vastly more intelligent than an LSE economics student? Also, in terms of learning speed, it seems very unlikely that a top maths student will be able to learn drastically faster than a typical economics/finance student.

In terms of modelling, IBD interviews typically only cover basic discounted cash flow analysis and leveraged buyout structure. Often the interview won't even cover that. In terms of accounting, questions regarding basic financial reporting, the 3 statements and treatment of specific items such as convertible bonds may be asked.

I guess you are right in terms of IBD, but I think when you look at Trading the technical knowledge required can vary massively. I recently had an interview where I was doing university level option theory on the phone.