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Investment Banking vs Transaction Services – Detailed Comparison

What do aspiring analysts consider Investment Banking vs Transaction Services and get confused between choosing any one? If you don’t know the answer, you are about to find it. These two streams are in high demand in the current world and offer essential services to businesses and individuals. However, their nature of operations is different. The difference between these two fields and the career opportunities for aspiring employees along with the benefits of joining these realms is discussed below for your understanding. 

Investment Banking vs Transaction Services

Investment Banking

Investment banking is a part of the financial sector that takes the responsibility of raising capital for corporations, municipalities, or other entities alongside performing complex transactions like mergers and acquisitions. They also handle a company’s IPO. Underwriting is one of the ways to raise capital for companies. 

Forms of Investment Banking

There are different kinds of investment banking based on the nature of services offered and the location of the banks. 

  • Bulge bracket banks
  • Middle market banks
  • Boutique banks

Bulge Bracket Banks:

The banks that operate under this category offer worldwide services which is why they are huge in size. 

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Middle Market Banks:

The banks are smaller compared to the bulge bracket banks. Their business dealings are on a small scale. 

Boutique Banks:

These banks are further divided into regional, industry-specific, and elite banks. Elite banks are considered the largest of the rest and handle mergers and acquisitions of massive businesses. Industry-specific and regional banks have smaller dealings in certain industries and regions respectively.  

Transaction Services: 

Transaction services are third-party services provided by a firm to facilitate a business transaction. These firms are efficient at performing due diligence and submitting the reports to the clients to help them make a business decision like entering a merger and acquisition agreement post review of the viability and value of the company in question

Types of Transaction Advisory Services

Though the transaction services are primarily concerned with the conduct of due diligence, there are a few more kinds available for the clients. 

  • Valuation services
  • Transaction structuring services
  • Debt restructuring services

Valuation Services:

The professionals follow a set of procedures to find out the financial value of a company and identify the price offered by potential buyers to take over it. The valuation must be done in compliance with the rules set by the regulatory bodies. Valuation of intangibles like trademarks, goodwill, patents, copyrights, and brand value is also carried out on request from the clients. 

Transaction Structuring Services:

The transaction advisories may also be involved in the creation and execution of appropriate transaction structures to help the companies meet the taxation and related implications. There is no standard transaction structure as every client has different needs and requirements. Therefore a professional must keenly understand and develop one for each client. 

Debt Restructuring Services:

The debts of the parties involved in amalgamation are analyzed in this kind of service. Debt restructuring services are required to help financial institutions and banks promote the recovery rehabilitation process.

Investment Banking vs Transaction Services

Transaction services are focused on performing due diligence for clients to complete a business transaction whereas investment banks are involved in assisting investment-related aids to their clientele. 

Investment bankers assist the whole process required for mergers and acquisitions but the transaction analysts focus only on one part that is mentioned in the deal. For example, if the potential buyer needs information about the other party before proceeding to the acquisition, he may ask for the conduct of diligence by a transaction services firm.

Nevertheless, both services have a high demand which is why many young minds and professionals are interested in acquiring the required skills and entering the streams. Speaking of skills, do you know what skills are essential to become an investment banker or a transaction professional? If not, let’s learn about the qualities and skills needed to thrive in the respective fields. 

Skills Required for a Transaction Service Associate

It is important to have sufficient knowledge and certain qualities to become a transaction service associate. A few of the mandatory faculties are shared below.

  • Commercial awareness
  • Communication
  • Attention to detail
  • Tenacity and ambition

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Commercial Awareness:

understanding operations in the industry and business transactions are key elements to success in the transaction services sector


Good presentation and communication skills will be helpful to share and explain complicated financial information with the concerned parties. 

Attention to Detail:

Missing to spot a single error can lead to loss of ransom. This is why a transaction service associate must have the ability to pay attention to every detail. Being able to identify and fix mistakes will reduce or eliminate the scope for losses. 

Tenacity and Ambition:

Candidates having determination and an ambitious mindset are highly valued in the firm. That’s because only a dedicated and career-hungry person can give their best. 

Apart from these qualities, an individual with an MSC or BA with a specialization in subjects like economics, business studies, and finance will have a possibility to have a high salary package in the financial sector. 

A graduation scheme is mandatory to enter established firms. Companies like KPMG, Deloitte, EY, and PwC offer graduation schemes for their employees. Having a certificate of completion in financial modeling can make your application stand out.  

Responsibilities of a Transaction Service Executive

There are a few duties that have to be performed by a transaction services associate. Let’s look at them to understand how the above-mentioned skills are useful. 

  • Transaction service professionals offer client advice and carry out linked support services for financial services transactions like investments. 
  • They perform competitive analysis, financial modeling, and other kinds of data analysis and utilize the data to provide strategic recommendations. 
  • They are expected to assist with risk mitigation and assessment, follow financial due diligence, and provide suggestions on financial strategies to align with client objectives. 
  • They create market research summaries, presentations, reports, and other required material for internal collaboration and client meetings. 
  • They assist client executives and firm leaders to offer financial due diligence for international businesses.
  • They take part in site visits and client meetings while gathering information for financial analysis from top-level management.
  • They need to perform financial due diligence for strategic clients and private equity to assist them in evaluating the financing requirements and acquisition decisions. 
  • Interacting with functional areas of the pratices like audit, tax, and related consulting services is their key responsibility. 
  • Reviewing, understanding, and abstracting complex documents linked to real estate as part of the due diligence process and team’s underwriting. 
  • Ad hoc and general reporting to support essential transaction activities. 

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Skills Required for an Investment Banker

A set of qualities and skills are essential to become an investment banker. Some of the commonly required skills are mentioned below. 

  • Strong analytical and numerical skills
  • Interpersonal and communication skills
  • Problem-solving skills
  • Leadership and teamwork skills
  • Networking
  • Time management and project skills
  • Cooperation and Adaptability
  • Work ethics
  • Market Analysis

Strong Analytical and Numerical Skills:

Bankers must have the ability to analyze data and predict the results of implementing their decisions. Clarity about their tasks is important to avoid giving inaccurate advice to their clients. 

Interpersonal and Communication Skills:

Having knowledge is not enough; a candidate must have good communication skills to share their thoughts and findings with clients and management. Good interpersonal skills allow the candidate to build and maintain healthy professional relationships with management as well as clients. 

Problem-solving Skills:

Complex problems can arise at any time in any field. A banker with good problem-solving skills will handle any issue with ease. Having the ability to utilize the available resources to come up with effective solutions is highly valued in the banking sector. This skill not only helps in the elimination of problems but also involves minimum costs for fixing them. 

Leadership and Teamwork Skills:

Only a leader can motivate others and bring out the best in them. Bonding with the whole team will facilitate the identification and utilization of the potential of each person to fix problematic situations. For example, if a team member has a problem, the other person can take care of it. It is always fruitful to divide work among people instead of burdening one or two people with critical activities. 


Any individual will thrive in their career if they create good professional links and connections. Healthy relationships with clients will open doors for future opportunities. Exposure to international businesses will smoothen the professional conversations between clients and bankers. This skill is especially useful when clients from different parts of the world have different problems. In simple words, international exposure and relationships promote confusion-free communication. Networking will also boost the self-esteem of the employee. 

Time Management and Project Skills:

It is crucial to estimate the amount of time required to complete each task. When a banker has a clear idea about the required dedication and effort to complete the assigned tasks, they can meet the deadlines of all the projects. A good schedule to complete projects in their order of priority will eliminate the scope for escalations from clients.

Cooperation and Adaptability:

Flexibility to grasp new knowledge and skills is very important to survive in a challenging environment. Another aspect is open-mindedness which is needed to accept feedback from clients as well as management and make necessary changes to meet their demands. In short, a dynamic personality will progress at a faster pace in the banking sector. 

Work Ethics:

Transparency must be followed to avoid miscommunication among clients and management. This also sheds light on one’s integrity to manage the interests and money of clients to promote an integral workplace. 

Market Analysis:

Professionals are supposed to keep themselves updated with new trends in the markets so that they can utilize them for bringing out the best outcome of the investments for clients. Thorough research about markets is essential to handle investment accounts in an efficient and simple way. 

It is to be noted that work ethics, cooperation, adaptability, time management, and teamwork skills are also required for a transaction services associate. These aspects confirm that investment banking and transaction services are more or less the same and it’s not Investment Banking vs Transaction Services

Responsibilities of an Investment Banker

It is important to know the key difference between transaction services and investment banking .i.e Investment Banking vs Transaction Services. One sure way to differentiate them is by understanding the responsibilities of the employees in those sectors. We have understood the duties of a transaction service associate, now, let’s know the responsibilities of an investment banker in brief. 

  • Perform research and review market trends and financial information.
  • Issue trade equity and debt to increase capital
  • Develop and implement models to review financial dealings and thereby determine profitability.
  • Oversee acquisitions and mergers
  • Supervise private equity settlements and IPOs
  • Support and lead clients through the expansion of personal and corporate enterprise.
  • Prepare financial and legal records to complete acquisitions, purchases, and investments.
  • Examine potential risks and provide financial advice
  • Identify and attract potential investors
  • Maintain knowledge of legal and regulatory issues in the financial industry.

Career Prospects for Transaction Services

As transaction services involve financial modeling, due diligence, and transaction structuring tasks. Here are a few career opportunities for individuals who enter this stream.

  • Investment banking
  • Equity Research Analyst
  • Restructuring
  • Corporate development
  • Transaction due diligence

Investment Banking:

The professionals in investment banking deal with transactions such as mergers and acquisitions, underwriting equity, and leveraged buyouts. The investment banker has the responsibility to create financial models to assist governments, private corporations, and large public companies. In simple terms, valuations are also carried out in investment banking. 

Equity Research Analyst:

Individuals who have the skill to develop financial models conduct research on the markets. They create stock market reports to help clients make investment decisions such as purchasing, selling, or holding certain investments. 


This is one of the key opportunities for a transaction service professional as it involves extending a helping hand to failing businesses. Turnaround consulting or restructuring has a major role in the divestment of certain business operations, cash flow forecasting, and business stabilization.

Corporate Development:

Corporate development deals with joint ventures, mergers and acquisitions, and related growth opportunities for established businesses.

Transaction Due Diligence:

Main part of transaction services is performing due diligence. That aspect opens doors for the associates to enter another entity as a senior consultant for carrying out due diligence. Analysis of financial statements, coordinating with investors, and offering inputs to debt and purchase agreements are some of the responsibilities of a senior consultant in the due diligence field. 

Career Opportunities for an Investment Banker

Let’s look at the career-linked difference between transaction services and investment banking, i.e. Investment Banking vs Transaction Services

  • Investment consultant
  • Investment strategists
  • Portfolio manager
  • Private wealth manager
  • Financial data scientist

Investment Consultant:

An individual who utilizes his finance and accounting expertise in advising clients who may be fund managers, asset owners, and trustees is an investment consultant. They share their investment suggestions on asset classes, funds, and nations. Their main responsibilities include facilitating portfolio construction processes and asset allocation strategies

Investment Strategists:

These individuals’ work is to assist portfolio managers with tactical and strategic trading strategies and asset allocation by utilizing their analytical skills. They conduct analysis on economic indicators like currencies and rates to gain insights and thereby advise the concerned managers. 

Portfolio Manager:

A manager who designs investment portfolios by using his expertise in the financial industry is a portfolio manager. They have the skills to understand the investment objectives of their clients and create investment portfolios for them. They are responsible for managing a basket of assets; minimizing risk and maximizing returns. 

Private Wealth Manager:

A professional who is assigned to advise high-net-worth entities about the diversification of their portfolios to meet their financial goals is a private wealth manager. Portfolio management, tax services, retirement planning, and estate planning are some of the other services offered by them. 

Financial Data Scientist:

A candidate who is hired to apply data science techniques to financial data and relevant customer data is a financial data scientist. They collect data from various sources like financial technology, retail banking, hedge funds, and investment banking. Their main focus is to perform statistical analysis and create financial models to understand and interpret data. 

Final thoughts on Investment Banking vs Transaction Services

Investment banking is a branch of finance that primarily deals with raising capital for companies, governments, and individuals. The other crucial activities that take place in investment banking are the issuance of securities and the performance of complex transactions like mergers and acquisitions. There are three kinds of investment banks based on their nature of operation and location: Bulge bracket banks, Middle market banks, and Boutique banks.

Transaction services are another part of the financial industry that involve financial due diligence of one part or a segment of a transaction as requested by a client. Most individuals consider that there is competition between investment banking and transaction services (Investment Banking vs Transaction Services) but the fact is the latter is a part of the former. Transaction services include other facilities for their clients like valuation services, transaction structuring services, and debt restructuring services. 

To understand the actual Investment Banking vs Transaction Services concept, it is necessary to know the skills required to enter both fields. 

An individual who aspires to enter transaction services needs commercial awareness, good communication skills, attention to detail, tenacity, and ambition. Whereas a candidate with an intention to thrive in investment banking must have knowledge and expertise linked to strong analytical and numerical skills, interpersonal and communication skills, problem-solving skills, leadership and teamwork skills, networking, time management and project skills, cooperation and adaptability, work ethics, and market analysis.

A transaction service executive must have a degree in finance and accounting or should have completed MSC or BA with a specialization in subjects like economics, business studies, and finance. Anyone with a graduation degree in finance and accounting can enter investment banking. Another approach to make a way into these streams is by joining relevant courses like financial modeling and accounting-related programs. 

The responsibilities of a transaction service executive are similar to the duties of an investment banker. However, an investment professional performs a wider range of operations compared to a transaction service advisor. 

The career opportunities for both realms are different. However, the prospects available for transaction services can also be availed by an investment banker except for the due diligence part. 

  • Job opportunities for a transaction service associate are investment banking, equity research analyst, restructuring, corporate development, and transaction due diligence. 
  • Job opportunities for an investment banker are investment consultant, investment strategist, portfolio manager, private wealth manager, and financial data scientist

Note: There are a range of career opportunities for both sectors. However, limited profiles have been shared to understand the difference and scope of the chosen fields. 

There is no such thing as Investment Banking vs Transaction Services (competition) as the individuals who enter transaction services can also thrive in the investment banking sector. In simple words, these sectors are interlinked. You can choose any of the fields and excel at your work and explore several career opportunities available for both. 

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FAQs on Investment Banking vs Transaction Services

Q. Are Investment banking and transaction services completely different?

No. They go hand in hand. However, investment banking is a wider sector and has transaction services as part of it. One thing to note is that transaction services are third-party services provided by an established entity whereas investment services are usually offered by banks set up to help clients meet their financial objectives. The belief that there is competition between the two (Investment Banking vs Transaction Services) is a fallacy. 

Q. Which field is best for my career progress? Investment Banking vs Transaction Services?

You can enter transaction services and serve the investment banking field as well. That’s because investment banks offer whole transaction services for their clients. That being said, you may easily jump from an investment bank to a transaction advisory firm as it has limited activities compared to the transactions services industry. 

Q. How different are the qualifications required for joining an investment bank and a transaction advisory firm?

If you are comparing eligibility for both i.e., Investment Banking vs Transaction Services, then it is important to know that a degree in MSC, BA, or relevant finance accounting domain is sufficient to become a transaction service executive. On the other hand, having a degree in finance and accounting will let you intern at an investment bank and render your services. That being said, with the advancement of technology and modernization, many educational entities are offering crash courses to encourage candidates to join any sector with ease and a valid certificate of completion.

Anuja Maniyala is a intern at IIM SKILLS. She worked as a creative content writer for AADOX and Quoteslyfe in the past. She has identified her passion for writing after working as a banker in some well-known companies like Wipro and HSBC. Her current target is to become an author of a unique and creative self-help book. Her enthusiasm and curiosity to learn about the human mind and behavior makes her different from the rest of the world.

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