My Spring Insight Programme at RBC Capital Markets

On the first week of April, I had the opportunity to attend the Royal Bank of Canada's Spring Insight Programme. It was aimed at 1st and 2nd year undergraduates studying a STEM degree.

Learning about the interesting AI machines RBC uses in its Wealth Management division.

The programme had two main focus areas - the Wealth Management division (Buy-side) and Capital Markets (Sell-side). I had the opportunity to learn about how these two different functions operate, why they are separated from one another and how each part of RBC ties into the end goal of providing the highest levels of client service. The content of the programme was jam-packed, with various representatives taking time out of their day to discuss their backgrounds, roles and how they ended up working for a top-tier Investment Bank .

Buy-Side Experience

The exciting programme kicked off with an in-depth discussion about what an Investment Bank actually does, who its clients are and how RBC fits into the financial markets world. Both parts of the bank are separated by buildings, owing to the regulations where a Chinese wall was imposed to stop clients benefiting off trade ideas and privileged information.

Being a non-finance student, it was great to see that RBC planned this topic talk, and what was great was that I was given a booklet of key terminology used in the industry. Whenever something such as 'CDO' and 'Subprime' came up in the discussion, I could gain a quick refresher on what they were. Furthermore, I gained an insight into how the financial cycle works between clients and investors, where revenue flows and who ends up buying securities and financial products that Investment Banks produce. Whether that be an IPO, refinancing or debt restructuring, all these sell-side services end up on the buy-side and are then managed by portfolio experts and investment management services. Getting into the nitty-gritty was great, having the chance to answer questions that you simply would not know from Google!

Following this discussion, several Managing Directors (MD's) from Wealth Management, AI, Data and Analytics and Risk services gave up their time to give presentations on their roles and responsibilities. It was truly a great mixture of people from different backgrounds and specialties, reflecting RBC's core values of diversity in a collaborative environment. Given that RBC Wealth Management is rated in the top 5 best wealth managers, it was interesting to see how RBC differentiates itself from its rivals. The answer I discovered was in its highly-talented teams - each working closely with the client to service their needs and commitment to providing the highest levels of advice. The AI MD's, for example, have created specialist AI self-learning machines to track, identify and understand clients' spending and portfolio preferences and have programmed them to adapt suitably to a clients' needs. A key rival in this industry, called AI Borealis and NORA.

Wealth Management Application Task

Me writing down ideas on the board, which we later presented to an MD and the other teams.

After the interesting insights from the MD's came an interactive business change/ transformation task. It was designed to split my fellow interns into 5 groups of around 8 people or so to come up with a plan to a software development task. We were tasked to come up with a Wealth Management application, which my team decided to focus on an app that allowed clients to track their FX trades and convert/transfer currencies to other users. It was great to work alongside so many interns from a multitude of subject degrees, from Neuroscience to Mathematics. All individuals had something insightful and intelligent to add to the conversation, truly gaining an understanding as to why diversity drives team performance. After presentation, we got feedback from the panel and improvements to our suggested ideas.

Risk Management was the key takeaway from the buy-side part of the Spring Insight programme. Whether that be placing a trade in the financial markets, figuring out your loss probability in a game of poker or even if you think your favourite football team are going to win a match or not. Risk analysis is something which we do unconsciously but we never often think about. Hence why when the MD explained it at this level, it was far more relatable. Particularly in a financial transaction where the risks need to be quantified and investigated to the T.

'When you have a solid risk strategy and relevant experience with this mindset, you'll be far more valuable not just in the work we do but your life in general. If you take away anything from this programme, learn to manage risk.' - Director, Risk Services.

This was something I thought about more since the programme and am starting to implement in my paper trading activities and life. It has so far helped me learn from my failed positions (in my paper trading account) and a direction of what to do next time in the future.

Sell-Side Experience

The Capital Markets team, covering Equity Research, Sales and Trading and Global Investment Banking were situated within the Front Office site near Bank. This was the part I was looking most forward to, since the trading floor was something you could only really experience with HR clearance. Most of the traders, regardless, were more than happy to take time off their desks to give us presentations and insight into S&T at RBC.

S&T was not quite what I expected, in the sense that the traders were happy to stop what they were doing and chat to us about their daily schedule and client responsibilities. The trading floor tour lasted a whole afternoon with rotations around the FX, Cash Sales, North American Equities and Exotics (derivatives) desks. What was appealing to me was how close the traders worked together and conversed with one another. An MD was working alongside an Analyst, something I did not quite expect beforehand - the level of responsibility and mentoring you get is huge. My conversions with an analyst from Risk Solutions covered this point well, stating that when you start out in your S&T career, the person who you can assist you is never an email away, they are sitting right next to you.

The atmosphere in the room was buzzing, it was never quiet but not too loud either - every now and then an electronic ticket sound goes off and calls coming and going every few seconds. Traders with multiple screens, with tabs of Bloomberg terminals open was the highlight for me as I was lucky enough to watch a highly-skilled trader from FX navigate across his 4 screens; he was on the phone with a client whilst checking the FX pairs of 3 currencies and providing real-time prices to all 3 pairs. This was something which looked quite complex, but I was rest assured that it never gets as intense as this!

Several MD's across the aforementioned desks gave up their time to discuss what they do and what issues face the industry, including discussions on block-chain and cryptocurrency. It was also fascinating to hear from an MD who specializes in robotics for FO. Giving traders a unique advantage by placing them in bespoke terminals that allow them to process trades faster, taking on more clients and optimize the experience for their clients. It was very interesting to hear the amount of technology and AI that goes into trading, not just by the coding behind it but the cost of keeping a trader in a seat!

Following this, Global Investment Banking was covered in great depth with discussions with analysts, associates and MD's in the field. RBC have been extraordinary in their IB activities, working on major deals such as the Melrose/GKN hostile takeover acquisition (the largest to date in Europe), the Walt Disney/Fox refinancing (Estimated over $45B) and the AIMCO acquisition (Advisory). I was surprised to learn how effective the IB team are, despite their smaller numbers as compared to other Wall Street rivals.

Derek Nelder, global head of Investment Banking, aims to increase this presence throughout USA and Europe and it seems to be working. The afternoon was then followed by panel discussions with directors from EMEA Oil and Gas, M&A Advisory and Leveraged finance. All these operations follow either by Product or Sector teams, with around 15 professionals in each. I learned a lot more about the deals RBC Capital Markets had participated in, meeting the team behind them in a few cases - a far cry from reading about it in the FT!

Overall, the Spring Insight Programme was well-planned, very thorough and enjoyable. I had many opportunities to network with various professionals during the insight events and took part in a few case studies along the way. A massive thank you to the Campus team for putting this all together in a fun and interactive manner! The tea and coffee was excellent, and I must have had a few of those throughout!!

I look forward to be hopefully working with RBC Capital Markets in the foreseeable future, as it truly is an inspiring, collaborative and charitable organisation with great people behind it.

Written by: Shamsher Mann