Banking continues to be one of the most stimulating, competitive and rewarding careers in the corporate world. It offers an unmatched opportunity to learn about other industries and businesses, some of the best options for career growth and unbeatable exit options.
Even as some roles have fallen from grace due to the excesses of the past, other opportunities continue to emerge. Now that we have got that “sales pitch” out of the way, let’s get down to brass tacks. Is banking still a good career option?
Everyone has certain expectations from their jobs – some people would give anything for great work-life balance, some prefer the opportunity to learn while some just like to travel. But at the end of the day, the one thing that is common about all jobs is that you have to be making some money while doing it.
When it comes to compensation, banking has earned a well-deserved reputation for paying better than most other corporate jobs. Analysts make anything from USD 70,000 to USD 150,000 in the first year itself, based on which division they are working in, the size of the bank and location. If you have an MBA, you can increase those numbers by around 30% – 50% for just your starting salary.
Sales & Trading, M&A, Corporate Banking, Capital Markets roles offer the best bang for your buck in the first 3-4 years of your careers. After that though, it greatly depends up to how much money you bring in for your employer. And this is the stage where roles with the maximum revenue potential (like Trading, Private Equity, Venture Capital and Hedge Funds) really begin to shine.
These are the best paying jobs in banking, but that’s not to say that retail banking and support functions don’t pay well. They are still well-above averages for other sectors, especially if you are a high performer.
You learn something at every job. Banking is not so different in that respect. You learn about your job, you learn how to sell, you learn about the various products and services and how they work. Same old stuff.
But that is where the similarities between banking and almost all other jobs end. Because in banking you not only have to learn about your own industry but about the client’s as well. You have a client in the telecom sector that you want to lend 1.5 billion dollars to? You better learn every single thing there is to learn about the client, their competitors, the threats to their industry, their growth prospects and so on. And with 1.5 billion dollars of the bank’s money on the line, you better make sure you know more than anyone else on the planet (and that sometimes includes the client as well!).
Over time, bankers will learn a lot about the various industries that they cover. Sure, management consultants do this too, but their area of specialisation is usually restricted to one particular sector. As a banker, you can move from telecom to auto to even eCommerce over the course of your career.
More than one way to get in
There are a LOT of different ways to get into banking. In our article on the best degrees for banking, we look at just a few of the many academic courses that can help you get into banking.
I have seen MBAs, engineers, economists, physicists, lawyers and even doctors and fighter pilots in banking. It’s just an interesting and competitive career which appeals to a lot of demographics.
There are also a lot of opportunities to take the unconventional path – I have seen customer service reps in call centres and even door to door salesmen make it big in banking. It’s rare and getting rarer these days, but I bet you already know what they about those that have the will to succeed.
Something for everyone
Are you a math geek? A super salesman? A rock under pressure? A legal genius? An economics savant? There is something for everybody in banking.
Here are just a few of the roles I have covered on BankersByDay:
- Credit Analysis
- Relationship Management
- Project Finance
- Supply Chain Finance
- International Trade Finance
- Private Equity
- Hedge Funds
- Venture Capital
- Asset Management
- Equity Research
- Quants/ Financial Engineering
The articles listed above break down the career choices and paths for each role. However, here’s a general breakdown of how things go:
Option 1: Natural Vertical Growth
This is the best option for most banking divisions as you keep building expertise in your domain and thus become more valuable over time. You start out as an Analyst (or as an Associate post MBA) and move up the chain over the years. From Associate, you move up to AVP/ Vice President/ Associate Director, then to full Director and finally Managing Director and the various CXO roles.
You don’t have to be in the same bank for this, you just have to be in the same vertical. In fact, having the flexibility to shift from one bank (and/ or location) to another is actually a great career advantage and you can boost both your compensation and your responsibilities with such lateral movements.
Option 2: Different Roles within Finance
Certain personality types get bored of doing the same thing and prefer to keep switching things up from time to time. You can do this in banking as well to quite an extent. Certain roles allow more flexibility than others and it all depends on how many skills are transferable between the roles.
For example, if you have front-end client experience, you will do just fine in almost any sales roles. Similarly, 10-15 years of solid experience in most roles will allow you to become an independent financial consultant if you so choose. Some bankers just end up setting up their own funds or creating their own FinTech startups.
Option 3: Moving into non-finance roles
Learning about finance is good and all, but the best part is that you learn how businesses actually work. You get to know your clients and their business intimately. This gives you so many exit opportunities which is the focus of the next section.
Banking has some of the best exit options in the corporate world. You build up a lot of core skills like analysis, logical reasoning, relationship management, industry knowledge, people and time management etc. You also gain a lot of knowledge about other industries as you spend a lot of time with your clients. Here are just a few of the great exit options for bankers:
Option 1: Start your own consulting practice
Finance is a massive and evergreen industry and there are hundreds of thousands of big and small companies who could always use some expert advice on their products or messaging and so on. This option is obviously not for everyone, since its like running a solo business. But I guess I am biased towards it because it worked out really well for me.
Option 2: Private Equity/ Hedge Funds
This is the ultimate goal of many IB analysts which is why they happily put in 80 hour weeks with a smile on their faces. There is some good money to be made if you can get your foot in the door of some prestigious buy side setup. Not everyone gets in though and most burnout before getting there. But for many, this is the promised land!
Option 3: A normal Corporate job
I have seen my fair share of CFOs in Fortune 500 companies who were ex-bankers. It’s usually a much easier and laid-back lifestyle and the stress levels are generally a lot lower. The money might not always be as good at the lower levels, but you usually end up in the more senior level positions anyway. Plus, you get stock options!
Option 4: Entrepreneurship
Moving into a hot new start-up as their finance guy is always a great option. The real draw of this option is that you end up handling a lot of their finance stuff which can be really exhilarating. You set up the budgeting, the financial planning, the banking tie-ups, the subsequent fund-raising rounds etc. Expect to receive at least a small stake in the company and if it skyrockets, you are a millionaire! If it doesn’t work out, move on to the next start-up.
Option 5: FinTech, RegTech, WealthTech etc.
This is something I have been trying to do as well but it is a lot more work than I had initially anticipated. It’s also a bit capital intensive to hire programmers etc. to build the product and then pitch them to prospective clients. But its something I have always kept an eye on and I am sure there are people much more resilient than I am who can make this work.
The Future of Finance and Banking
Cryptocurrencies are often thought of as something that would end the traditional world of finance.
But the truth is that they won’t.
You can read my detailed article on the future of cryptos, but the short version is that there is no distinct advantage that the cryptos have that banks can’t really replicate or buy their way into.
I am not really saying cryptos are a scam. I am a crypto investor myself and I have had much better luck with cryptos then stock trading for sure. It’s just that all the great things that some of the cryptocurrencies are doing, banks can do the same as well. There is no law that prevents banks from using blockchain technology to develop the same solutions as some of the cryptos.
The REAL threat to banking and finance, in my opinion, might come from Artificial Intelligence. But I have written on AI topics as well and the truth is that AI can and will affect ALL industries anyway. Some of the more mundane and repetitive aspects of banking might be more vulnerable to it, but no more so than for any other industry.
I mean think about it – a few computers now do the work of millions of clerks who would enter the data about each bank withdrawal/ deposit by hand onto a paper register. But yet, banking only grew in every way and actually benefited from that automation.
Start your Banking Career
Finance is a tough filed to break in and you need the right education. Use this tool to find the best schools or online programs to help start your finance career:
Here is a small, curated list of the best online courses, certifications and degree programs to help you get started in banking & finance.
|Online Program||Who should take it?||Learn More|
|Investment Banking Certification from the New York Institute of Finance||You can't go wrong with this course if you are interested in a career in investment banking. This is the best course for investment banking analysts and associates out there.||Check Course Details|
|Business and Financial Modeling Specialization from Wharton Online||Need to brush up on your financial modeling skills? Wharton has you covered. Recommended for any and all finance roles that require any kind of financial modeling.||Check Course Details|
|Professional Certificate in Corporate Finance from Columbia University, New York||Well suited for Investment and Corporate Banking candidates looking to add a solid brand to their CV while learning Corp Fin fundamentals. This program is based on the first-year course taught in Columbia Business School’s MBA core program.||Check Course Details|
|Artificial Intelligence for Trading from Udacity||Interested in AI? So are the Banks. AI algorithms now drive a massive chunk of the global financial markets. This meaty Nanodegree from Udacity will get you desk-ready to rub shoulders with the best.||Check Course Details|
|MicroMasters® Program in|
Finance from MIT Sloan School of Management
|Designed for recent graduates or mid level professionals looking for a career transition into finance. This program has 5 graduate level courses that will fast track your finance career.||Check Course Details|
Make Your Own Way
A career in banking can give you the foundational tools you need to succeed – you learn about finance, you learn how businesses operate, you learn to sell and market. If you can learn to optimally extract value from all the learning opportunities that banking and finance offer, then you are set for life.