If you are financially astute and have a basic awareness of how money and markets operate, or if you possess an understanding of financial products, then choosing a career in banking could be a wise and fruitful move.
Luckily, If you’ve ever considered working in this lucrative and often misunderstood industry, we have everything you need to know right here.
This is how to become a banker…
1. Research the Profession
Before you commit, you should always research any potential decisions thoroughly. This will enable you to get a clearer, more unbiased picture of what you’re getting in to, as well as give you a better idea of how to get involved.
There are several different types of banks and, therefore, bankers; generally, they are split into two broader specialisations: retail/high-street bankers and corporate investment bankers.
As the name suggests, retail bankers work in high-street banks and building societies and interact directly with individuals and small businesses. Generally, they give out financial advice, authorise loans and set up bonds and savings accounts.
Corporate investment bankers work with large businesses, institutions and even governments to manage corporate and strategic activities, including mergers and buyouts, the issuing of bonds and shares, and the raising of capital.
Typically, corporate investment bankers are split into three main areas:
- Corporate Finance – Primarily advising organisations on strategic plays and transaction processes. Corporate finance bankers are usually experts in a particular industry.
- Debt Capital Markets – Designing and restructuring the debt obligations of organisations.
- Equity Capital Markets – The how, when and where of raising capital through research and analysis of markets.
The responsibilities of retail bankers are similar to other management roles, and involve:
- Implementing and selling products and services offered by the parent bank
- Building relevant contacts and networks, while representing the bank within the local community
- Serving customers as appropriate and processing the relevant paperwork
- Managing, training and recruiting staff, as well as ensuring the smooth running of the premises
Corporate investment bankers, meanwhile, work alongside other business professionals, focusing on specific projects across different market sectors. Their main responsibility is to advise organisations on how to achieve their short- and long-term goals. They do this by:
- Conducting in-depth research and analysis of market trends and developments
- Identifying and suggesting potential business opportunities
- Building financial models and presenting the results to clients
- Liaising with the chief financial players of client organisations
- Coordinating project teams of other business professionals, including accountants, lawyers and PR consultants
Essential Skills and Qualities
In investment banking, employers usually require you to demonstrate commercial awareness and a knowledge of financial markets and sectors. You will also need to possess the following:
- Strong numerical and analytical skills – usually backed up by a relevant degree
- Excellent teamwork and leadership skills
- Effective communication and interpersonal skills
- The ability to manage time effectively
- The self-confidence and decisiveness to make difficult decisions
- The ability to work within a stressful environment and remain calm under pressure
In retail banking, the focus is more on sales-oriented and customer service-based skills, although a basic level of commercial and financial awareness is also needed.
Working Hours and Conditions
In retail banking, you will typically work the 9-to-5 opening hours of the branch, including weekends, although as banking moves ever deeper into the digital domain, it is possible to take on shift work for 24/7 online and telephone banking services.
Corporate investment banking is a different story, however. Hours are often long and unsociable, and it is not uncommon to work 15-hour days (including weekends) – especially during the critical stages of a deal. You should bear in mind that although the financial rewards can be great as you progress up the ladder, corporate banking requires a lot of commitment and personal sacrifice.
In retail banks, graduates can expect to start at around £21,500 ($29,930), depending on the location and the employer, with additional bonuses and benefits on offer throughout their career. Once qualified, branch management roles can rise to around £40,000 ($55,680), while senior management positions can go as high as £60,000 ($83,520). Regional and specialist managers can earn in excess of £80,000 ($111,360) per year.
For corporate investment bankers, the average starting salary is around £35,000 ($48,720), reflecting the longer hours. After around three years of experience, salaries can reach the £50,000 ($69,600) mark, while those with significant experience can easily earn six-figure base salaries. The majority of an investment banker’s income is through performance-related bonuses, though; these can be as much as four times the base salary, with exceptional performers earning even more.
2. Get the Qualifications
In the UK, most high-street banks and building societies offer graduate-specific training programmes. Although a finance-related degree is not a requisite, courses such as economics, business studies or mathematics may increase your chances. Alternatively, it is possible to gain entry-level employment as a clerk or cashier and progress internally into a management role. Corporate investment banks also require at least a 2:1 as competition is high; again, your degree does not have to be finance-related.
In the US, the criteria are essentially the same, although due to the fierce competition for places, it is advisable to complement your existing education with a relevant postgraduate degree. Investopedia highly recommends that potential candidates obtain an MBA before applying.
3. Land Your First Job
As mentioned, banking – especially corporate investment banking – is a hugely competitive sector to break into. It is vital to gain industry experience and, as a result, most applicants complete an internship towards the end of their degree.
Even if this doesn’t directly result in a permanent role, it is still a good opportunity to build a network of contacts; indeed, networking is a hugely important driving factor within the banking industry. Make an impression on as many people as you can, and demonstrate your commitment and suitability for a role when applying for jobs.
Many investment banks are multinational; some of the most sought-after roles are at:
- Bank of America Merrill Lynch
- Barclays Investment Bank
- Credit Suisse
- Deutsche Bank
- Goldman Sachs
- JPMorgan Chase
- Morgan Stanley
Meanwhile, the majority of retail banking positions are advertised to graduates, and although it is desirable to have some prior experience, such as a summer internship or college placement, your chances of success will rest more on the quality of your application. Prominent retail banks include:
- Capital One (US)
- HSBC (UK)
- Lloyds Banking Group (UK)
- NatWest (UK)
- US Bancorp (US)
- Wells Fargo (US)
4. Develop Your Career
Despite often working for the same institutions, retail and investment bankers follow a radically different career path:
Although the career progression of a retail banker is relatively linear, it is still highly rewarding and challenging. There is a defined leadership ladder up to management level (where graduates typically slot in), which again leads to opportunities to progress from branch management to area management, and then even on to centralised specialist management.
In terms of professional development, there are various professional qualifications that you will be required to undertake as part of your management training. There is a range of banking qualifications that can be obtained in order to enhance your personal portfolio, as well as several industry bodies in both the UK and the US that run events and offer networking opportunities.
Corporate Investment Banking
The opportunities to progress in investment banking are plentiful, although the size of your employer may dictate this. For example, larger banks may offer exposure to more exciting opportunities, but smaller banks may offer less competition for promotion. Also, consider the specialisms of each institution; some have better track records in certain areas, and if you want to progress in a particular field, this can significantly enhance your prospects.
Most graduates start in analyst roles before progressing into client-facing positions. Exceptional individuals who can demonstrate strong leadership qualities and judgement capabilities can then progress into more executive roles, usually after around 10-15 years. High-performing individuals are often headhunted by competitors or firms in related industries, with banks paying out enormous financial incentives in order to persuade them to leave or stay.
Due to the multinational nature of banking, there is also the opportunity very early on in your career to work abroad. Indeed, as your career progresses, overseas travel is requisite; this will typically be to the world’s main financial hubs such as London, New York, Frankfurt, Singapore, Paris, Tokyo and Abu Dhabi.
Additionally, it is worth noting that the industry as a whole is heavily regulated. In the UK, investment bankers are required by law to complete Financial Conduct Authority (FCA) exams, as well as obtain additional continuous qualifications through the Chartered Institute for Securities & Investment (CISI). In the US, investment bankers are required to complete the Investment Banking Representative Exam (IB), better known as the ‘Series 79’ and administered by the Financial Industry Regulatory Authority (FINRA).
As banks are essentially the economic cornerstones of modern society, it’s unlikely that there will be a shortage of corporate investment positions anytime soon. Retail banking, on the other hand, is undergoing a transformation as consumer habits change and services move off the high street and into the digital realm. While this doesn’t necessarily mean a reduction in personnel requirements, it may mean retail bankers have to adapt and grow their skillsets to meet these challenges.
As you can see, the financial rewards of a career in banking are enormous, even if the competitive nature and negative public perception of the industry are off-putting. There is also the scope to make huge differences in people’s lives, whether it’s contributing to a large-scale multi-company merger or granting a small loan to a first-time business owner. No matter what your motivations or reservations are, there is something in banking for everyone, on every level of the scale.
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