Banking and finance is one of the growth industries that offer more about global excellence. Banks, insurance companies, security and pension funds, and other financial firms process and manage people’s money and financial assets. They provide jobs under challenging conditions as they handle the trillions of dollars that fuel local and world’s economic growth. World’s financial companies operate across national borders, dealing in diverse and growing foreign assets from stocks and bonds to currencies and commodities. Common opportunities exist in banking and finance careers, and the jobs are available in your own community.
A career in banking, finance, and securities offers variety, challenge, responsibility, and advantages. The most visible benefit is the earning potential in a company that deals in the management of large sums of money every day. Career advancement opportunities are exceptional, and few top professions have so many entry-level job openings in the years to come. Even in the earliest years of your career, financial jobs often provide outstanding authority and responsibility. Best of all, few industries offer more ways to adapt work to the lifestyle and career goals that are uniquely yours. Many jobs feature flextime, part-time career advancement opportunities, exceptional retirement plan, and other significant benefits.
Purpose of the Guide
The Pennsylvania Bankers Association (PBA) Education Foundation has prepared this booklet to help teachers, counselors, and others assist individuals who may be interested in establishing a career in banking and finance. The information contained in these pages can be used to teach about banking and finance as well as the variety of careers that are available within these industries. Whether used in the classroom or in career counseling sessions, this booklet is intended specifically to help guide potential bankers and financiers towards the employment that is right for them. All of the employment opportunities do not require a four-year degree, although completion of a two or four-year business, financial, or technical curriculum is highly recommended. Select the entry level positions within banking and finance to interest you, or simply choose the position you aspire for in the future. Acquaint yourself with the education recommended as well as the skills, aptitudes, personal characteristics, physical demands, certification or licensure requirements, working conditions, and career additional education requirements. Consider what opportunities a two or four-year degree could offer. Find the potential position you are interested in from the career choices shown on the inside back cover. Then, match your research with the proper educational foundation, and you may chart an educational training plan that suits your needs. Good luck in your pursuit for a new and exciting career in Banking and Finance!
Scope and Importance of Banking and Finance Careers
A potentially broad and diverse industry, the commercial banking sector of finance includes roles as varied as corporate and retail lending, branch operations management, and trust services. However, some positions transcend this sector and are found throughout the finance industry, including financial advisors, portfolio managers, security analysts, and corporate treasurers. The study of technical investment analysis, commercial banking and investment companies, and their regulatory environments offers insight into managed investment funds, including mutual and pension funds. Many trends in the financial services industry are brought to the forefront through recent legislation. At the close of the century, the Gramm-Leach-Bliley Financial Modernization Act is the single most significant piece of financial services legislation since the Banking Act of 1933, which dictated the separation of commercial and investment banking activities.
This current legislation is expected to bring numerous changes that will directly or indirectly affect demand for services offered by many of these firms. The banking and financial services team helps contribute to professional growth and career success by providing you with an awareness of these issues and the technical knowledge you need for accurate, reliable decision-making. Along the way, the team helps students to prepare to stand out in the competitive financial services field. Students indicate that they find no single career preparation course more salient when it comes to subsequent job success than Intercollegiate Studies Institute student seminars. With more than fifty professional, academic, and student activities provided for students interested in a career in finance, and a dozen research and education grants made available to students interested in researching issues in various areas of finance, the service is easily one of the broadest on campuses coast to coast. Given the multitude of career options, professional opportunities, and future transitions to which the banking and finance field introduces participating students, one can clearly understand the importance of the focus and services provided graduating students.
Understanding the Banking and Finance Sector
The meaning and perception of banking and finance activities can differ depending on the financial services context. From certain perspectives, banking may encompass only deposit taking and making loans. From a regulatory or securities governance perspective, a broad definition may encompass portfolio management, advisory and underwriting functions, in addition to securities brokerage, trading or dealing, or sales. However, in the context of banking and finance careers, I have defined the sector according to the three main areas that are the focus of these discussions, namely: banking, which includes retail, commercial and merchant banking, as well as regulatory areas such as compliance and internal audit; finance, which includes investment and private banking, corporate finance and equity, fixed interest and foreign exchange sales, trading and research; and investment, which encompasses asset management, investment banking and private equity, with particular emphasis on securities. The level of emphasis and resources allocated to each of these activities will also differ from firm to firm within a broadly defined financial services sector. For example, a particular firm could confine its activities to the insurance or broking business within the financial services sector.
Key Sectors within Banking and Finance
A career in banking and finance can mean a variety of different things, depending on the specific sector or assignment chosen. Experienced professionals in banking and finance will have strong working relationships with colleagues in one or more of the following areas.
Commercial and Retail Banking: Commercial banking concerns itself with small business clients right up to major corporations, by providing a limited range of services. Retail banks (also known as high street banks) offer a variety of services to individuals and the self-employed. These services may include current accounts, credit and debit cards, mortgage lending, and limited wealth management services.
Corporate and Investment Banking: Corporate and investment banks offer a wide range of financial services to business and individual clients. Corporate banking typically involves lending facilities to medium and large companies for short and medium-term financial needs. Investment banking concerns itself with more high-risk, high-reward activities; generally, they help clients raise funds and provide specialist advice on financial aspects of mergers, acquisitions, or changing the ownership of companies. They also manage the surplus capital and liquid assets of other companies through services such as asset management and securities trading.
Asset Management: Asset managers invest money on behalf of market these funds to the general public. The terms of this investment and the level of risk will vary in accordance with regulatory or licensing requirements set by the authority that oversees the operations of the company or fund.
Hedge Funds: Hedge funds should not be confused with mutual funds; they are more flexible in terms of options of investment and may include significant leverage. Known for high compensation packages and aggressive investment strategies, the private world of hedge funds embraces unique opportunities, such as the efficient discovery of mispriced investment opportunities.
Private Equity and Venture Capital: Private equity is distinct from venture capital; both provide financial assistance to companies with talented managers that believe in a particular vision. The primary difference is that while venture capital focuses on financing privately held companies, private equity pertains to transactions that invest very large sums of capital in companies. Companies receiving assistance are typically not quoted on a stock exchange. The help typically means playing some role in the management of the company and needing to fulfill related corporate governance obligations.
Trends and Developments in the Industry
As in any profession, it is essential for banking and finance professionals to keep current with trends and developments in their field. As a rule, successful careers are built on searching for ways to increase one’s knowledge and broaden one’s skills through formal schooling, professional development courses, and on-the-job training. In addition to these basics, new entrants to banking and finance careers should also become familiar with technology and how it affects their chosen field, as well as understand structural trends in their industry.
Banking and finance institutions lend and invest people’s life savings, administer trusts for the cost of education of young children and the security of the elderly, supply working capital and real estate loans for people’s business, manage retirement funds for the protection of people’s standard living in retirement, and produce analysis on security selection and the changing credit markets that is considered in the decision structure of most of the world’s venture capitalists, mutual funds, and insurance companies. These are very important tasks that millions of people rely on insiders in the banking and financial community to do to support their values and ways of life.
Career Opportunities in Banking and Finance
Career opportunities in banking and finance fields are as diverse as the needs of individuals, businesses, and government alike in meeting their economic goals. Those with the training in finance and related areas can find challenging and rewarding jobs, ranging from traditional commercial and investment banking activities to more specialized fields such as real estate finance, multinational financial management, and financial planning and analysis. The following are only a sample of the myriad of career paths available to finance trained individuals.
Traditional Commercial Banks play a key role in the economic health of a community providing the public the full range of banking services, from money orders and traveler’s checks to offering a wide range of credit programs, including annuity loans, closed-end loans, installment loans, and second-mortgage loans. In addition, commercial banks act as financial intermediaries, collecting the money deposited by their customers and lending these funds to businesses and individuals that will use the money to generate revenue. Banks pay their depositors interest and other services, such as checking accounts. Banks, in turn, use the money their depositors have given them to lend to comparatively creditworthy individuals and companies. Essentially, commercial banks match savers with borrowers, and in the process, make profits from the difference, or “spread,” between the interest paid to depositors and the interest charged on outstanding loans.
Entry-Level Positions
Most new college graduates usually enter the field of banking or finance as staff members. In either field, they are known as “trainees,” receiving on-the-job training for as long as six months before being assigned their first area of concentration. As they have limited training, they generally have little contact with customers. But, as they acquire an understanding of bank operations, they may be required to answer questions or to seek assistance from experienced workers when offering bank services or selling financial products. Banking careers will usually commence in either a branch office or within a back office setting if one is slated for management training.
Trainees may begin as tellers, customer service representatives, or personal bankers, depending on the size and type of bank and the nature of the service rendered by the particular department or office. They may have the duty of handling large sums of money and writing receipts, discounting negotiable instruments, selling certified checks, and ascertaining the balances and charging off depositors. They become familiar with the bank policies of handling transactions, such as endorsing negotiable instruments, using counterfeit detection and scanners, and verifying that a negotiable instrument is valid and accurately dated.
Mid-Level Positions
In the banking and financial world, hard work is rewarded. As you gain experience, you’ll qualify for more responsibility and better pay. There are many career tracks in commercial banking. Typical jobs are often found at most banks. For example, in retail banking, your first career move might be as a teller. As you gain experience, you may choose to move up and become a head teller or customer relations representative. After that, you might become a branch manager. There are also similar paths involving retail sales jobs at banks as well as customer service.
In commercial lending, banks develop many of their employees by starting them out as consumer or commercial loan officers, and then developing them into business development officers and relationship managers. The end roles will depend on the bank’s management company and how its executives want to utilize individual strengths. Positions in lending are often stepping-stones to bank executive positions. It is common for bank presidents and chief executives to have started their careers as loan officers. In fact, some banks consider themselves commercial lending institutions first, commercial banks second.
Executive and Leadership Roles
Executive and leadership roles in finance make up a core part of the financial labor force. These types of personnel help manage financial functions to help their company achieve long-term profitability. Finance, executive, and leadership positions in banking and finance are essential for overall economic prosperity, accounting for a significant proportion of jobs held by financiers.
Bank and financial institution roles for executives and leaders include work as a bank president, who oversees the operations of the bank, its financial health, and its professional reputation; chief executive officer (CFO), who manages the company’s finances and makes strategic decisions to ensure long-term financial sustainability; chief investment officer (CIO) who makes decisions about the investment strategies of the company and tries to maximize the company’s financial gains; or chairman of the board, the highest-ranking officer of a bank, who assumes overall responsibility for strategic planning and financial stability. Such roles represent the cornerstone of large banking and financial institutions, making them critical personnel in the industry.
Skills and Qualifications
In banking and finance, your success in a job depends more on your personal and occupational skills rather than the academic major or program you completed. Your personality and interpersonal skills are important components of your success, and many of the qualifications involved on-the-job experience. However, students can take courses, inside or outside their college program, that will enhance job potential. Many of the skills and abilities listed in the “Qualifications” section are not part of a regular college curriculum. You can strengthen them by joining school organizations like the Banking and Finance Society or other finance or investment clubs, taking part-time jobs during your college years, doing internships, attending special banking and finance school-sponsored programs, reading business publications like the Wall Street Journal or Investors Business Daily, and becoming familiar with the internet.
Here is a listing derived from the Occupational Outlook Handbook. Beginning positions in banking and finance occupations often require on-the-job training such as clerical skills, financial skills, or interaction with customers. An associate degree or prior formal training may be helpful and sometimes necessary for promotion to specific classifications provided the preceding requirements are met. GSA has developed a classification based on the duties advantages within the GS-5 level and beyond require bank examiners to possess credit skills of banking analysts. Upon passing six examinations, these lower-graded bank examiners are eligible for promotion to the level GS-9. Subsequent promotion to the higher GS-9 and GS-11 occurs if satisfactory records are kept. Banks analysis, it is another set of skills, usually at the GS-11 and GS-12 levels, for all bank examiners to advance. Bank examiners must have relevant academic backgrounds or corporate banking level experiences to advance beyond the GS-12 level (a probationary period is required). Banks analysts can move into many types of banking-related positions, such as credit analysts, bank examiner positions, bank specialist positions, or to other types of functions within the Bank. Banks analysts must attend a formal school for professional and career developments.
Technical Skills
Some of the necessary technical skills in banking and finance include:
1) Accounting: The ability to understand, analyze, and create financial statements including the income statement, balance sheet, and cash flow statements. It also comprises the audit process, cost analysis and computation, and decision-making procedures using related accounting information (e.g. break-even analysis; the effect of changes in selling prices, fixed and variable costs and volume on profit; use of contribution analysis; and marginal analysis in decision-making).
2) Data Analysis: Knowledge of how to collect, organize, and interpret data. This includes the use of data in financial institutions for marketing and decision-making. It also includes knowledge and use of frequency distributions, graphing, measures of central tendency and variability, probability and probability distributions, estimating and multiple regression, data warehousing, data mining, data marts, and other methodologies for analyzing and transforming internal data into information for management decision-making and information for customer relationship management.
3) Economics: The ability to analyze and apply macroeconomic, microeconomic, and international economic principles that affect the financial market, sector, and organizational performance. Ability to analyze market and regulate financial and depository institutions.
4) Finance: Understands the areas of risk management, banking including the role of central banks and non-bank deposit institutions; regulatory concerns, financial institutions and operational problems; function of financial markets and securities and types of investment companies; the operations and financial management of mutual funds; rules and regulations concerning investments; and process of electronic funds transfers.
Soft Skills
Soft skills can be as important as qualifications for a career in the banking and finance sector. Determination, good communication skills, and a strong customer focus can be more important than specific work experience for entry-level positions within your company. Being a team player and having the ability to work effectively under pressure and remaining calm in the face of difficult situations are also essential attributes.
Something that is particularly valued in the world of banking is commitment. In most banking roles, you always need to be present and available in case the need arises. Long hours at the desk are often a fact of life, but those who never miss an opportunity to volunteer themselves for new tasks and possible career-enhancing projects will soon see the effort being repaid.
Educational Requirements
As a consequence of the technology explosion, virtually all jobs in banking and finance require some level of education beyond high school. An associate degree or an apprenticeship with a bank will help college-bound students get a foot in the door. Banks may also consider hiring high school students with the promise of a full-time job when they graduate or offer a scholarship to help students continue their education.
To start training after high school, plan to study business, math, or economics. You can continue your education in banking through college or a specialized school-of-banking program. Although bankers of the past frequently learned the business on the job, research shows that this is no longer the case. Today’s successful banker will typically have at least an associate degree and may well have a bachelor’s or advanced degree in a business-related field. Banks not only reward education by hiring skilled workers but also extend financial assistance to those employees who want to further their careers through continuing education programs.
Navigating the Job Market
Review chapter 3 to brush up on helpful techniques and alternative strategies for your job search. What is your competitive edge? Let employers know what strengths you bring to them. These may be work experience, skills (technical and soft, e.g. leadership, teamwork abilities), knowledge (industry or specialized field), qualities (motivation, retraining), and qualifications (professional courses). The banking and finance professions regularly review the scope of specialized courses and qualifications they recognize as meeting their high standards.
Self-awareness is the key to job satisfaction and career fulfillment. Is your career what you want? Make sure your work environment is in harmony with your values, aspirations, and personal objectives. It may also be helpful to first analyze your own career orientation and the industry and/or sub-sector in which you are most likely to thrive. Finally, participate in mock assessment-interviews and assessment centers to better understand the pressure of the real thing. Find out what it is that you do not know about assessment criteria and understand the importance of benchmarking yourself against other candidates.
Networking and Professional Associations
Consider the importance of human relationships to your professional survival. The individuals in your financial services network can serve as resources on a wide range of career-related topics. You can network with people employed in both financial and non-financial institutions, and even with people who do business with financial institutions. Potential individuals to include in your financial services network include: current and/or former co-workers, faculty members from your own and other institutions, classmates, upperclassmen, and individual members of various national, regional, and/or local financial services-related professional organizations. Additionally, financial services-related professional organizations usually have magazines or newsletters that keep their members informed of industry trends and development. Knowledge of industry trends and developments can be extremely important to your understanding of potential career opportunities.
The following information was gleaned from a list of approximately eighty-five financial services-related professional organizations published annually by Robert Morris Associates (RMA). This list is categorized in the back of the RMA’s National Directory of Commercial Banking and Savings Institution, and at the end of the RMA’s Annual Statement Studies. I strongly recommend that you obtain a copy of one of these publications from your business library and skim through the list to determine which national financial services-related professional organizations exist in areas of interest to you.
Resume and Cover Letter Tips
Resume: Make sure the resume presents a professional, accurate summary of your qualifications. Keep the resume brief and tight (usually not more than two pages). Include only relevant information; be selective in how you present your qualifications (merits and achievements should stand out). If you have a lot of information, use an addendum or use creative ways to present details (for example, a listing of significant mergers you have completed). You can note if the full list is available. Use action and results-oriented language to describe your work experience.
Be sure the resume shows key transferable skills (transaction experience, analytical skills, marketing experience, financial analysis, and fluency in other languages). Your resume must be free of errors (spelling, grammar, punctuation, syntax). Have someone else proofread it. Use industry buzzwords appropriately and know what the terms mean. Recent graduates should include their GPA if 3.0 or higher. Use the addendum to address any issues. Be sure that the resume is consistent and accurate. Make sure the resume is in clear chronological order and corresponds to the dates given in your work experience and education. Inaccurate information can ruin your chance for an i-banking job. Especially in the consolidating industry, firms call not only to check adverse or risky information but to confirm information and statements of qualifications. This may not be illegal, depending upon the information solicited and the position at issue, and a firm that misstates its hiring practices may be liable if such practices violate federal or state fair employment laws. However, lying is not a good career move. It is illegal to lie in an interview about certain facts with the intent to obtain a position, and job offers have been rescinded once the firm discovered the liar. Remember, there is no statute of limitations on fraud. Finally, it is wise to remember the old saying that honesty is the best policy, especially if you are running for the job of a financially responsible person or a fiduciary (like a manager of the firm’s money or of a merger or acquisition). If recent graduates have very high SATs, the score can be noted. Do not use the personal pronoun “I” in your resume, but be sure to use articles and prepositions and complete sentences. No abbreviations should be used. You risk that the resume reader won’t know what the abbreviation means.
Interview Preparation
1. Interest and Enthusiasm: If you do not demonstrate your personal interest and enthusiasm during the interview, why should an employer be interested in hiring you? Your logic is flawed if you think your eagerness will hurt your asking salary. I can assure you from long experience that good economics and finance majors are in demand, and much in demand in the boom of the 1990s. Your sense of humor is generally positive. If a boss can conceive of spending a lot of time with you, he will always find that appealing – and indeed, it is extremely important to him.
2. Communication: The ability to express oneself clearly in a congruent and convincing manner is an important consideration in employment in the business world. Both verbal and written communication are equally important. Many of my colleagues have great gaps in my present the ability to use modern technology, writing e-mails as if they were text messages. Make your personal presentation. Set your thoughts and concerns on paper. Let us people to criticize or make suggestions, amending guerrilla college essay of it until perfected, field-tested perfection – more joyously praised or nation. I chose a secure job at times. Which is reflected by the grammar by the sea or the extent of the important thing is not so Besides, and your audience, possess a white Writing a targeted audience. What background do room? Judicious use of humor, and above all, let us see your personalities, second chance.
