In the modern world, the banking and finance industry has become an integral part of the everyday lives of people and businesses. As a result, preparing for a potential career in this industry is a solid decision. There are a multitude of career paths available to those interested in pursuing a position at a bank or financial institution. One of the key reasons this industry proves to be very popular is the growth potential – the potential to go from working at a bank as a teller to advancing to the highest ranks and becoming an executive in the lending division.
The role of financial intermediaries has evolved as regulatory changes have altered the scope of product offerings and changed the landscape of what types of jobs are available. With the advancement of technology and access to information by the general public, the demands and expectations of the positions are also much higher today. In today’s financial institutions, a position in the banking or financial industry will require successful job candidates to possess a strong foundation in banking principles, banking practices, and finance principles in order to be competitive. Something to keep in mind for those considering a career in finance is that jobs in finance tend to be much more specialized and there are not as many paths as there are in commercial banks.
The vast amount of sub-specializations within finance often dictates the demand for the type of person preferred for the job. Banking will prepare you for the investment world to an extent; however, the type of job you are in or are considered for can play a big part in what you study. Banking tends to give a very broad overview, while investments tend to focus an individual in a certain direction.
Understanding the Banking and Finance Industry
The banking and finance industry is not a single monolithic institution but encompasses a variety of interrelated financial segments, all of which aim to facilitate transactions and the flow of money in the economy. The primary “players” in this industry, which we’ll refer to as financial institutions, include commercial banks, investment banks, asset management firms, insurance companies, credit rating agencies, and financial advisory services. While commercial banks facilitate the opening of checking and savings accounts and the granting of loans, for instance, investment banks assist in the issuance of equity and debt to the public by a variety of firms. Asset management firms manage mutual funds that pool individual investors’ funds for potential gains across a diversified investment portfolio.
Financial markets are intermediaries for the exchange of securities and follow price and quantity pressures from groups in society in order to direct capital. In the industry, fundamentals like rules and regulations are important to protect consumers. It is also important to realize changes such as hiring and salary patterns. For example, recent years have seen an increased emphasis on risk management and a demand for quantitative skills to perform functions such as financial projections and derivatives valuation. Financial statement analysis is an evolving, complex, and challenging field, beginning with the preparation of financial statements as the finish line and interacting with the accounting and neural networks interface. The users of those statements depend on the information content and the fiscal year-end for analysis and the interpretation of fluctuations within the firm, including the current performance and position. Understanding what these various segments of the field do and how they interact informs choices on future career options.
Overview of the Industry
The banking and finance industry plays a significant role in the global economy. Its ancient roots stretch back to the 14th century, although ancient Greek and Roman civilizations reportedly discovered the concept of banking. Traditionally, a bank would accept deposits from the general public and lend to those in need. Backed by tangible and intangible assets, they managed investment accounts, mortgage facilities, and personal loans. This traditional model for financial services is now being managed and expanded to offer advanced technology solutions.
The banking and finance industry is very complex; it involves and is regulated by several local and international governing bodies, authorities, and codes of ethics, offering various financial products including but not limited to online banking, insurance, superannuation, foreign exchange, and trading. It is ever-changing with new products, rules, technology, and ways of doing business being developed and invented. Core banking offers a crucial background to understanding the future developments in banking. It develops a comprehensive understanding of emerging topics relevant to retail, corporate, and other banking businesses. Although the banking services offered by banks and the manner in which banks conduct business will continue to change at a rapid pace, core banking ideas remain the same. Banks continue to accept deposits, lend money, and provide many of the newest technology-driven services banks have offered over centuries.
Overall, the industry showcases development towards an industry of advanced technology and innovative financial services. Digital banking has picked up trends and, at the same time, expected innovations in the banking sector such as fintech, big data and analytics, blockchain, cybersecurity, and personal finance management to drive the progress. In terms of economic factors, many banking and finance organizations witness the greatest success during periods of the lowest interest rates because low interest rates tend to lead to investment activities in the capital markets and borrowings from the general public. Since interest rates have been low, stock markets are at an all-time high, and foreign investments are also made into Australian assets. Since the 1980s, deregulation, market liberalization, and globalization have greatly increased the volume of cross-border capital movements. The effects of globalization are particularly clear in the sphere of financial services, e-commerce, and global trade. Due in part to the nature of electronic commerce, it is very likely that a significant part or all of international transactions has been handled through correspondent banks located in the international trade area. Broadly, the financial industry consists of a range of distinct segments or sectors that make up an industry value chain. This includes providers of funds, financial markets, financial intermediaries, and providers of financial services to individuals, businesses, and the financial industry. Overall, the banking and finance industry can be characterized by its several diverse sectors; its international interrelatedness and increased use of advanced technology; and its ever-changing global environment and regulatory framework.
Key Roles and Functions
Financial Analysts: Financial analysts produce reports, investment guidance, and strategic recommendations for their firms. These professionals are responsible for analyzing investment alternatives, financial trends, and the financial performance of companies, industries, and foreign markets. Financial analysts must have exceptional analytical abilities, as their analyses and recommendations can affect the profitability of the firms they work for. Investment Bankers: Investment bankers are one of the most coveted positions in the finance industry. These professionals are hired by firms to help raise capital using several strategies and to facilitate the buying and selling of stocks, bonds, and other investment products. Investment bankers also advise on mergers and acquisitions. This appealing, high-profile, intellectually rigorous, and financially rewarding career attracts the best and the brightest in the finance industry. Loan Officers: Loan officers are responsible for evaluating loan applications, determining creditworthiness, approving loans, and preparing loan agreements. Loan officers can work in the commercial or consumer lending sector or for specialized lending institutions such as banks, insurance companies, savings and loan associations, and credit unions. Risk Managers: Risk managers are responsible for making and implementing decisions about how to manage risk. They are responsible for managing the financial and operational risks that are inherent in the various roles they play. Financial institutions, in particular, face a wide range of complex risks because they are involved in many businesses across a variety of markets, use a range of financial instruments, and operate in a variety of regulatory and economic environments. Successful risk management depends on the commitment to risk of all segments and on the successful coordination and open communication between them.
Educational Requirements and Skills
Education and Skill Requirements To secure employment at banks, investment companies, and other financial organizations, most individuals need a bachelor’s degree. A degree in finance, economics, accounting, or business administration is advantageous. Preferences are often provided to those pursuing MBA degrees, certifications, licenses, and professional designations. You may want a Master of Finance degree to improve your experience. Certification or license requirements include the Series 6, 7, or 63 credentials, as well as Certified Financial Planner, Certified Public Accountant, and Chartered Financial Analyst certificates. Professionals in this industry are typically knowledgeable about banking, large-scale funds management, financing, and risk management. Specific Skills and Personality Traits Needed Banking and finance professionals must be able to concentrate, think critically, and maintain consistency when operating with minimal errors. Strong quantitative and analytical skills are vital. It is important to understand basic and advanced methodology. Managers and consultants must be adept at appealing to customers and colleagues alike. Every segment of the professional’s range should be armed with strong interpersonal skills. Since consumer interaction is frequent in the finance industry, it is crucial to be proficient at listening, reasoning, and making sound decisions. Be sure that you work hard, invest in yourself, and build relationships. Finance and banking are constantly changing, and employees must be ready to be flexible and learn. Workers in this sector should be updated on changes in financial market laws or industry norms. If you have been out of work for some time or if you were unexpectedly fired, you should become well-read in your profession and fill any employment gaps with your freelance work, event attendance, or professional development. The motive of this part was to give an outline of what education is needed to be a financial worker in the financial department. After reading this section, one may have a brief understanding of potential career opportunities.
Navigating Career Progression
Navigating a path for career progression can be one of the most challenging career moves. In the finance and banking industry, there are numerous internal influences and external factors that can greatly affect the interest in a promotion or new career offer. Effective networking and mentorship can provide growth opportunities. Build your career in this industry by knowing the required certifications and maintaining licenses. Identify areas within the industry that will enable personal growth. Keep learning about the industry to move forward in your banking and finance career. Most people are always looking for new and better opportunities. It is worth it to start offering more, taking on more responsibility, and working in other areas. These initiatives may not only provide other experiences but also lead to promotions. Do not let yourself become too comfortable in your banking and finance job. Always working outside your comfort zone will enable learning and professional growth. At each point in your career, you should stop and establish what your career objectives are in the short term and long term. It is important that these goals can be achieved in a specific period of time. Every step in a career search should have a path that is chosen correctly so as not to waste time or invest unnecessary effort. Additionally, setting a career goal early on can help with career planning by preparing and gaining relevant knowledge and experience. Getting where you aspire to go requires aspiration, enthusiasm, and a clear career path; however, a career plan would seem impractical and incomplete without a hard-and-fast strategy to attain your ambitions. When it comes to advancing your career in finance and banking, there are a number of different factors to consider in order to move up the industry ladder. Reaching the next rung in banking and finance is all about skills, strategy, and timing. Your career won’t advance unless you take the initiative. You must also complete the necessary training courses and obtain relevant certifications. Most importantly, however, you must prove your skills and worth on the job in order to receive a promotion or be hired for a higher position. If you believe you have what it takes to succeed in banking and finance, here are the stages of promotion and hiring, from entry-level opportunities to mid-level banking and finance jobs, and finally to senior-level banking and finance jobs. Moving up in your career doesn’t just happen. If you are satisfied with climbing the ladder within your chosen banking or finance specialty, adhere to the necessary promotional qualifications. Gaining continuous access to economic and monetary resources is critical. Shift as required by the economic environment. Make sure your resume is ready to go!
Entry-Level Positions
Entry-Level Positions. Every year, college graduates seek full-time positions in banking and finance. A number of positions are available to new graduates in the banking and finance industries. A typical entry-level position requires the performance of repetitive, routine tasks under close supervision. Characteristics: Because college and university graduates rarely have extensive work experience in the field, they must spend a few years in an entry-level position acquiring essential technical and judgmental skills. Most new employees are given on-the-job training to learn company procedures and proprietary software programs. The most common entry-level positions at banks and brokerage firms include the following: Bank staff, financial analyst, investment banking associate. In the finance, insurance, and real estate industries, the following entry-level career paths are common: credit analyst or loan officer, financial analyst, mortgage loan or loan servicing, personal financial advisor. Bank managers often begin their careers as customer service representatives and then move up to personal or commercial banking officer, branch manager, and regional manager. Educational preparation and relevant internship experience, such as a paid summer internship, are two advantages for college and university students looking for an entry-level job in banking or finance. Bachelor’s degrees are the most common educational qualification, although people employed in the related industries of finance and insurance may have earned a master’s degree. A bachelor’s or master’s degree is required for most financial analysts. Characteristics: Computer and data analysis skills are necessary for most beginner positions. Keen attention to detail and the ability to solve problems and communicate effectively are also important. The individual must work with others as part of a team. A successful graduate entering the banking or finance field can expect to be given a great deal of responsibility from the start, have the opportunity to work in several areas of the bank or finance company, and can expect their duties and position to change often. New hires must also be open to advancement, accept new assignments that take them out of their comfort zone, and adapt to their organization’s procedures, expectations, and culture. Networking with other employees at all levels is also an important part of becoming successful.
Mid-Level Positions
Continuing to advance up the career ladder in the banking and finance sector, many financiers find themselves in a mid-level position. This could look like the role of senior financial analyst, in which yearly salaries are often around $85,000. Professionals in these roles are expected to not only offer necessary advice to financial team supervisors but also lead and mentor junior financial analysts, ensuring company policy compliance and efficiently communicating analyses across departments. Other leadership roles are positions like bank branch manager or credit union branch manager, where the yearly salary is in the area of $66,000 – $77,000. Another example is a risk analyst. This person’s job is to ensure a company does not assume an uncomfortably large risk. In banking and finance, that often translates to HR and compliance with laws.
At this stage in one’s career, it is important to start becoming an expert in your specific sector or the specific function you are performing in the bank or finance industry. Experts also mention soft skills and hard skills as crucial. As with entry-level positions, leadership and teamwork are cornerstones. Aside from general management prowess, individuals in these roles also need to be able to coordinate resources and manage budgets. Specific, tangible talents could range from running financial models to strategic workforce planning. To continue moving up, professionals might pursue advanced progress, perhaps seeking professional certifications. This is also the time in a professional’s career to find a mentor. Often, many in the finance world should start increasing their amount and interpersonal networks. Companies also rely on employee referrals and inside connections to fill in the gaps in their workforce. After all, if an employee has taken the time and effort to help a friend or acquaintance get a job, they must feel that employee is a good fit. In banking and finance, this can lead to additional professional development. The person knows the office culture, and a conversation over lunch can provide insights that are hard to transmit in a formal interview setting. In any case, experts say, anyone in the banking and finance world, from new professionals to those ready to retire, should embrace the challenges and growth opportunities. This is the way to meet your short-term and long-term banking or finance career goals.
Senior-Level Positions
1) Chief Financial Officer (CFO) Literally responsible for the money, the CFO plays a critical part in setting the strategic course of the organization. 2) Director of Finance Manages all financial and accounting operations and is involved in strategic planning and leading financial initiatives in large and small organizations. 3) Investment Manager Investment managers choose how to invest money on behalf of clients or their own employer. They research and recommend investment opportunities they think will increase profit and manage large sums of money across a variety of assets from shares and bonds to real estate or products such as gold. 4) Bank Manager Bank managers are responsible for running the everyday needs of a bank and its branch. 5) Financial Manager Every organization needs a manager who can look after their cashiers, financial assistants, etc. An individual in this position can have a range of responsibilities. IR specialists not only seek private funding for their organization but also guide and consult senior executives to make financial and investment decisions in support of their strategy. The role includes budgeting, financial forecasting, credit rating, income distribution, financial reporting, and executive accountability. At this level, you have to be able to turn a research report into advice and a board presentation and generate support within the organization for your strategies. Experience in managing formal and informal networks is increasingly important, with CEOs and MDs getting all sorts of unsolicited mail. In one sense, everyone at this level of management is an IR manager. Whatever policy the organization takes, if they meet someone who can influence opinion on it, they will probably meet them. As a general or divisional manager, you determine the expedient or appropriate management strategy given the needs and resources of your organization. There’s no guarantee that it will be successful, but it’s likely to have some impact on the other organizations of which they are a part or by which they might be influenced. You must have the interest and authority to act with due respect to other organizations and regulations and the commitment of resources.
Professional Development and Networking Opportunities
– Professional Development Workshops: Participating in workshops on topics relevant to today’s banking and finance environment can enhance one’s skills and knowledge. Workshops include regulatory and compliance programs, relationship banking, negotiation, financial statement analysis, commercial real estate, credit risk, stress testing, capital markets and finance, and anti-money laundering, to name a few. Seminars: A large selection of seminars is designed to offer professional development opportunities. A very popular seminar series is often offered for credit analysts, with the objective being to build the skills through all phases of a credit transaction: pre-loan, underwriting, and the workout phase. Electronic and Online Programs: Online training is highly sought, as it allows one to learn at one’s own pace, from any location, and at a time that works for one’s schedule. Online programs cover a wide range of areas, from credit risk to sales and marketing to information technology. These programs are designed to assist with continuing education as well as exam preparation, to sit for one of the many certification exams. Speakers: A number of industry speakers and a government relations program offer excellent speakers that provide first-hand expertise on banking, finance, cancer research, and healthcare policy.
– Local Professional Associations Local associations and local chapters of national associations, as well as university faculty and staff, sponsor meetings, workshops, and other events on a regular basis that bring the community together to network, socialize, and learn new content. These associations are valuable in making a local impact and building relationships, as well as in growing student resources by taking advantage of their scholarship and internship programs and student memberships. Two week-long programs held at the Inn and their main ballroom are the Bank Executive Symposium and Graduate School of Banking. National/International Professional Organizations: Holding memberships for national and international professional organizations and receiving their publications will also provide one with the latest in research, trends, and best practices in a particular field, no matter one’s vocation. Conventions and annual meetings offered by national/international professional organizations provide excellent overview programs of the profession/vocation. Plan to attend them, if possible. Some professional organizations will offer a student rate for convention participation, which includes a dinner where student members can network with faculty and professionals.
