Banking is one of the many job alternatives open to those who have majored in finance, and there are many more options. Retail Banking, Investment banking, and commercial banking are all forms of banking. Here, we’ll look at the pros and cons of a career in commercial banking and will answer your question, “Is Commercial Banks a Good Career Path?”
What Is Commercial Banking?
As a form of a financial institution, commercial banks lend money to businesses, handle payments, and offer a variety of financial products to corporations. Commercial banks, on the other hand, do not serve the general public. Individuals and businesses alike can use the services of a commercial bank. As a result, commercial banks’ customer bases include both people and corporations. There are a variety of services offered by commercial banks to their consumers, much like ordinary banks.
Proposing investments, facilitating banking and bill-paying as well as a variety of other financial goods are only some of the services offered by financial institutions. Customers trade at teller windows in a physical location where a commercial bank typically operates. Fees charged for the usage of commercial banks’ services are how they make money. Customers, for example, must pay interest when they repay a loan, based on the conditions agreed upon. In addition, a variety of commercial banking services entail service and convenience fees.
Overview Of Commercial Banking Functions
It is imperative that we have a crystal clear understanding of the roles that commercial banks play before we go into the commercial banking career path. There are two fundamental tasks that commercial banks do, and these services are categorized as primary and secondary respectively.
Principal Duties and Responsibilities of Commercial Banks
- Commercial banks are willing to take deposits of a wide range of amounts
- Gives out the money in the form of Loans, Overdrafts, Cash Credits, etc.
- Offer services related to financial management
- Offer services related to the administration of the treasury
- You must offer a payment processing service that accepts transfers, checks, NEFT, and RTGS.
Commercial banks also serve other purposes
- Services relating to foreign exchange
- Reimbursement of the costs incurred by the clients
- Tax deposits and refunds can be accepted.
- Serve in the capacity of trustees during a transaction involving finances
What Do People Working In Commercial Banking Do?
Various career options are available in commercial banking. Jobs at the bottom of the corporate ladder require little more than a high school diploma, while those at the top demand years of experience and a bachelor’s degree.
From a customer’s standpoint, most individuals have some knowledge of commercial banking. There are a variety of banking alternatives available at commercial banks, including savings and checking accounts as well as loans for houses, autos, and enterprises.
The interest banks charge on loans is how they make money. Customers’ deposits provide the company with the funds it needs to make loans. As a commercial banker, you’ll have a unique perspective on the world of banking.
Is Commercial Banks A Good Career Path?
Commercial banking is one of the most rewarding job paths in the financial services industry. Commercial banking provides it everything when it comes to compensation, employment possibilities, and career advancement.
However, if you wish to work in this field, you must begin in an entry-level position such as a credit analyst. If you successfully finish your MBA degree, you may have the opportunity to begin your career as a loan officer or account manager.
After that, you can work your way up to a supervisory or executive position based on your background and abilities. Commercial banks in the United States own $15.58 trillion in assets, according to a recent report. The average yearly wage in commercial banking is $91,732 per year. However, depending on the role you have, your pay may go up or down.
Qualifications Needed For A Career In Commercial Banks
Most commercial banking positions need at least a bachelor’s degree, and a few also call for additional credentials, such as a Certified Financial Planner (CFP) or a Certified Fund Specialist (CFS) (CFS). Entry-level positions may help you get your foot in the door, whether or not you have a degree, and can provide you the connections and experience you need to land a job in banking.
Degrees in banking may be a possibility for you if you already know that’s what you want to do.
A High School Diploma
Many careers in banking require a bachelor’s degree or more, and even those that don’t require one will require a high school certificate.
Bachelor’s Degree
With a bachelor’s degree, you can focus on a number of different topics that are useful in the commercial banking industry. You may want to consider a career in banking and finance or accountancy.
Master’s Degree
A master’s degree may be required for advancement in the banking industry. Although the MBA is often regarded as the pinnacle of banking education, it is by no means the sole choice. Master’s degrees are available in a wide range of disciplines, including finance and economics as well as accounting, mathematics, and statistics.
Certifications
For those who want to work in banking, there are many different certificates available, and each one is very specialized. To put it another way, you’ll want to take the path that best fits your long-term job goals. The following are examples of potential certifications:
- Chartered Financial Analyst (CFA)
- Certified Financial Planner (CFP)
- Certified Management Accountant (CMA)
- Chartered Financial Consultant (CFC)
- Chartered Investment Counselor (CIA)
- Certified Public Accountant (CPA)
- Financial Risk Manager
- Certified Fund Specialist (CFS)
Pros of a Career In Commercial Banks
Here are some advantages of working in commercial banking that you should be aware of now that you’ve learned about your numerous options:
1- Growth Opportunity
It is common practice for commercial banks to sponsor educational advancement and tuition assistance initiatives. No amount of formal schooling is ever considered a waste of time in the banking industry.
BLS reports that many investment banks have an “up or out” strategy in which entry-level investment bankers either get promoted or dismissed after two or three years, guaranteeing that newcomers have a shot at the top of the ladder.
2- Good Salary
Based on one’s job, experience, educational credentials, and the bank in which they work, a person’s salary might vary greatly.
Many bankers get commissions, bonuses, performance incentives, and their normal salary.
3- Flexible schedule
The majority of bankers’ schedules enable them to work during the day on the weekends and on public holidays.
In contrast to this trend, banks are creating additional branch locations, such as in supermarkets and big-box stores, allowing people who like to work flexible hours the chance to do so.
Workers at TD Bank, for example, have access to a wide range of employment options.
Employees at Bank of America have access to a variety of programs designed to help them maintain a healthy lifestyle and keep their health in check.
4- Wide Variety of Jobs
Another benefit of working in commercial banking is that there are several career paths to choose from. As far as employment goes, it doesn’t restrict anyone. Whether you prefer to work directly with customers or not, there is a career out there for you.
5- Stable Industry
Although there is a general downward trend in many industries, banking is not one of them and never will be. People’s attitudes toward banking and finances may change, but the requirement for a bank’s stability guarantees that you’ll always have a job.
6- You’ll get better at managing your own finances
Working in this sector will provide you with a wealth of information that will enable you to better manage your own finances and make informed decisions about where and how you want to invest your money in the future.
Cons of a Career In Commercial Banks
However, there are certain drawbacks to working in a commercial bank. You should also know about them before making a final decision. We’ll look at some of these difficulties in this section.
1- Demanding Careers
The long hours and high volume of transactions make working in commercial banking demanding. As a result, many people leave banking within a short period of time.
2- Competition is getting tougher.
New banks are popping up all the time, which intensifies the competition for existing bank clients even further. There is a temptation for banks to sell financial products without first examining the customer’s financial situation.
In addition, when clients fail on loans, the financial system is put under stress because of this lack of pre-qualification. As a result, the institutions and the people implicated might face major legal ramifications from this.
3- Interacting With Clients
Customers that are irate or disrespectful may raise questions, and you must be ready to deal with them. Because money is such a touchy subject, this is to be expected. At all times, a banker must remain polite and professional.
Characteristics of a Good Commercial Banker
It’s not enough to obtain a bachelor’s degree in business administration to thrive in commercial banking. It’s more vital to have the following qualities that can help you succeed in your job:
1. Good Communication Skills
Customers, workers, and directors are just some of the individuals you’ll interact with while working at a commercial bank. As a result, being a good communicator is essential, from writing reports to presenting visual presentations.
2. Critical Thinking
Several papers, ranging from financial accounts to studies on the worldwide market, must be reviewed. To make sense of the deluge of information accessible, you’ll also need a keen eye and a logical mind. It’s best not to depend only on your gut instincts while making decisions.
3. Mathematical Ability
A job in commercial banking necessitates a strong command of mathematics. When making a choice, you need to be able to read and interpret data and graphs, along with their ramifications.
4. Emotional Intelligence.
The banking sector is always under pressure. It may be emotionally draining to meet corporate goals. Resilience is a must. It is also simpler to create human interactions with both clients and coworkers if you are emotionally sophisticated.
5. Determination
Commercial banking is a challenging sector, just like any other. For every obstacle, there is an opportunity to learn from it and grow from it. A strong desire to achieve is therefore essential.
6. Customer Support
The purpose is to provide the best service possible to our customers. Go the extra mile for the benefit of your customers. If you want to exceed customers’ expectations, you must go above and beyond.
7. The capacity to adapt
You’ll be interacting with a wide range of individuals and working in a variety of settings. As a result, flexibility is a need. To accomplish so, you must stay up with the industry’s rapid speed.
How to Succeed on a Commercial Banks Career Path
You may now be considering a career in commercial banking after reading this article. If this is the case, the following actions are imperative:
1. Your education should be a priority.
A bachelor’s degree in finance or a closely related field is an excellent place to start. In order to secure a higher-paying job and better career prospects, a master’s or doctoral degree is also necessary.
2. If you’re looking for a job, don’t only look at the pay.
Focus on what you want to accomplish in the long run, not just the short term when looking for a job.
3. Utilize Your Prior Knowledge and Experience
Begin from the very bottom and work your way up. Don’t let entry-level pay put you off. To succeed, you’ll need three things: perseverance, drive, and the right talents.
4. Be Surrounded by the Right People
Increase the number of people you know in the business world. There are more chances to explore when you have a larger network of individuals to lean on. There’s always the chance that someone in your network will turn out to be a lifelong mentor for you.
5. Educate Yourself on How to Make Use of Modern Technology
Find strategies to embrace innovation in order to stay abreast of industry shifts. The way you go about your work will be altered as a result of this. For example, artificial intelligence (AI) can enhance your abilities and increase your productivity.
6. Don’t ever stop learning.
Never stop acquiring new skills, even if you’ve already landed a job or gotten a promotion. You’ll benefit from keeping up with the latest developments in commercial banking. You’ll be more competitive as a result of this.
Entry Level Jobs In Commercial Banking
Commercial banking is a highly competitive area of the financial services industry. A bachelor’s degree isn’t required for many entry-level occupations, but you’ll need one if you want to work your way up the corporate ladder or start in any of these fields. There are exceptions, of course.
1- Manager’s Assistant
If you want to be an assistant manager, you’ll need a college degree and some managerial experience. Being an assistant to the manager makes this an entry-level job, which can serve as a springboard to more senior positions in finance and management.
$44,000 per year is the average annual salary.
2- Receptionist
While high school graduation is preferred, it is not required for a receptionist in a commercial bank. It’s your responsibility to greet customers and choose who they should see first. While some of them will have pre-scheduled visits, others will simply walk in and ask questions.
Be kind and pleasant so that potential customers would want to conduct business with you.
Salary Range: $29,000 a year on average
3- Notary public
Notaries public are employed by some of the world’s largest financial institutions. This position necessitates the presence of a government-certified witness for the signing of legal papers. As a result, smaller banks will delegate this job to a wide range of people inside their organization.
Only a passing score on a test and the acquisition of a surety bond are necessary for certification in this field.
The typical yearly wage is $61,000.
4- Protective Security Personnel
Most banks are full of jewels. Important papers, jewelry, and family treasures can all be stored in a safe deposit box, so it’s not simply for storing cash.
Most banks have security guards on duty, whether they’re visible to the general public or working behind the scenes to keep an eye on video surveillance. They may also be called upon to accompany critical people on various off-site assignments.
The typical yearly wage is $30,000.
5- Customer Service Representative
A commercial bank’s customer care representative must immediately become well-versed in the institution’s product and service offerings. Clients rely on them to point them in the direction of financial solutions that are advantageous to both the client and the bank. They may also be responsible for responsibilities such as refunds, processing payments, and arranging exchanges.
$30,000 is the average annual salary.
6- Bank Teller
As with the profession of bank teller, a high school certificate may be sufficient for employment in a commercial bank. On a regular basis, you’ll be trusted with sensitive data and monetary transactions. Since you’ll frequently be working with clients, you’ll also need to be courteous and knowledgeable.
An excellent opportunity for those who want to check out the sector or work part-time while attending college.
$31,000 per year is the average annual salary.
7- Loan Officer
The primary responsibility of a loan assistant is to help the loan officer by doing many of the same duties. You’ll spend most of your time filling out paperwork, conducting research, and staying up to date on lending industry regulations.
Personal and company loans necessitate a high level of confidentiality in most banking roles. Having this position will help you go forward in the financial industry. It gives you the opportunity to learn the ropes and establish yourself as a reliable and conscientious worker.
Salary Range: $37,000 to $45,000 a year
8- Administrative Assistant
It is not necessarily necessary for administrative assistants to have advanced degrees. These people aid the bank’s management or executives with day-to-day work, such as preparing reports, managing appointments, maintaining office supplies, and so on.
Pay: $36,000 per year, on average
9- Underwriting Assistant
Loan applications are processed by underwriters. They are primarily responsible for ensuring that the individual or business seeking for a loan has the ability to pay back the loan and that they have a solid credit history.
The assistant underwriter is frequently responsible for the bulk of the underwriting-related paperwork and research. This is an excellent first job since it offers you a good understanding of the underwriting process and opens the door to further opportunities.
The typical yearly wage is $36,000.
10- Personal Banker
You’ll usually find personal bankers with a bachelor’s degree or less working in the financial sector. They are able to assist customers, both current and prospective, who are interested in establishing fundamental checking and savings accounts, money market accounts, and other financial services.
Earnings on an Annual Basis Averaging $31,000
These are entry-level jobs. Also, check out the best paying jobs in a commercial bank in 2022.
Frequently Asked Questions (FAQs)
What is the role of a commercial bank?
By providing financial services to both individuals and businesses, commercial banks aid in both social cohesion and the advancement of the economy. Creating credit is, therefore, a top priority for commercial banks.
What is the difference between commercial banking and retail banking?
Retail banks focus on individual consumers, whereas commercial banks focus on corporations and enterprises. A commercial and retail division is common in most banks.
Is Commercial banks a good career path?
Yes, commercial banking is a good career choice but do your complete research before taking it.
Do commercial banks pay well?
If you’re interested in a career in finance, a commercial bank is a terrific place to start. A large number of these businesses provide their employees with good career prospects and competitive pay and perks. Commercial banks, on the other hand, can be difficult to work in, and they aren’t necessarily recession-proof.
Is commercial banking competitive?
Choosing the finest commercial banking job path is a very personal decision that cannot be generalized to everyone. In spite of this, there are a few basic considerations that should be kept in mind when choosing whether or not a career in commercial banking would be a smart choice. These considerations include researching the industry and the competition, evaluating your talents and experience, and deciding whether or not you would like to work for a large or a small bank.
Do commercial bankers work long hours?
Commercial bankers usually work long hours, and many roles include working weekends and midnight shifts in addition to regular work hours. The bank’s performance, however, depends on the employees’ willingness to work long hours. Commercial bankers are in charge of time-consuming duties including initiating and completing deals.
Conclusion – Is Commercial Banks A Good Career Path?
Is commercial banks a good career path? Well, the answer is yes if you love talking with new people and helping them and you love maths. Then this job is for you. There is no doubt about that. Every job has its advantages and disadvantages, so don’t worry too much about the negatives.
Commercial banking is already a significant business, and it is expected to continue to grow in the near future.
In the year 2021, the commercial banking industry in the United States alone will have a revenue of around $848 billion.
If you’re interested in any of the roles listed above and want to be a part of a sector that is expected to remain strong regardless of the state of the economy, commercial banking is an option worth considering.
Countless individuals begin their professional lives as call center agents or tellers before moving on to other fields.
There are a number of advantages to pursuing an advanced degree in finance or business administration, such as the ability to advance swiftly in your job.