American banking and investment institutions are responsible for much of the financial activity in both national and international economies, and tens of thousands of trained professionals oversee a variety of services – ranging from loans and investments to risk management and corporate acquisitions – within their walls. Banking is a massive and ever-expanding industry, and this guide is designed to help individuals interested in a career in this sector learn more about their options and the educations they’ll need to succeed.
A career in banking opens wide the doors of possibility, and individuals in the banking and financial sectors have many opportunities to use their skills in meaningful ways. Professionals who graduate with a suitable degree in areas of business or finance can be found helping first-time home owners take out a loan, advising investors on the best sectors to place their money, analyzing international stock markets, creating budgets for individuals or companies, brokering financial deals or auditing existing financial records to ensure legal practices are being followed.
Because the field of banking is so diverse, people with countless interests and skillsets can be found within it. Individuals who enjoy working with a variety of clients often gravitate toward investments and loans, while those who prefer more solitary work may find themselves in auditing. Many jobs follow the schedules of a typical workweek, while individuals who choose to work for high-powered investment and brokerage firms may be required to work irregular or extended hours in return for higher annual salaries. Most positions require at least a bachelor’s degree, while those in senior or executive roles may need an MBA or similar advanced credential.
Although degrees in investments and banking may be difficult to find, many programs have specializations in these areas as part of other programs. Finance, accounting and business are the most likely choices, but investment firms and banks may also be pleased to see degrees in economics, mathematics or engineering. Regardless of the program name, what hiring panels really want to see is that you’re good with numbers, and each of these degrees demand that of their graduates. While in school, students should begin honing the skills they’ll need to be successful investment bankers. Practicing presentations, familiarizing yourself with Microsoft PowerPoint and Excel, learning how to speak about numbers in an authoritative yet accessible way, and interacting with many different types of people are just a few of the ways to build ancillary skills while also digging into coursework.
Summer internships are a common step leading up to graduation in this industry and provide significant advantages when it comes to getting hired. While the largest investment firms are based in major cities, opportunities at smaller, boutique investment firms also exist. Some of the most most well respected investment groups in the world offer summer internships, including J.P. Morgan, Goldman Sachs, Jefferies and Deloitte. Competition for the top companies will be fierce, so students should begin their research early and be sure to keep their grades up.
While a few entry level investment roles may entertain applications from individuals with only a bachelor’s degree, a master’s degree is increasingly becoming the norm. Because academic programs at this level allow students to tailor their learning to future career plans, there are numerous master’s degrees offering concentrations in banking. Other popular choices include business administration or a master of finance degree.
In order to represent a bank or financial institution as an investment banker, these professionals are required to register with the Financial Industry Regulatory Authority (FINRA), which includes an examination based on their specific work. The most common exams – or series as they are called in this industry- include:
|Career Goal and Educational Needs||Online||Associate||Bachelor’s||Master’s|
Already in full-time employment, I’m interested in learning more about banking skills or improving upon the ones I already have, but I need a flexible option allowing me to learn while still working.
I’m fascinated by numbers, statistics and projections, but I haven’t yet narrowed down the exact field I want to pursue. I’m hoping a few semesters of related coursework will help me narrow my options.
The financial sector fascinates me to no end, and I have a passion for working with people and helping them achieve their goals. I’m not sure which entry-level role suits me best, but I know a bachelor’s degree in a related subject will qualify me for many.
Having worked in banking for a few years, I’ve narrowed down my options and found the specific niche within the sector that suits me best. Now I’m looking to increase my skill sets and knowledge to be competitive for this advanced position.
Certifications are used widely in banking to provide existing banking professionals with concentrated knowledge in a particular area and to ensure clients know they are educated about the topic. A wide range of certificates exist, but some of the top options include:
These two-year programs, most commonly available at community colleges, introduce students to the foundational principles governing the banking and financial industries through a mix of class discussions, group projects, assignments and examinations. Associate degree programs deliberately exclude courses in areas of liberal arts or the sciences, thereby allowing students to focus narrowly on their field of interest. Graduates go on to find work as junior loan officers, tellers or assistants to the credit manager. Common courses may include:
Students are introduced to the elemental functions and roles of the banking industry, with course topics ranging from monetary systems and payment functions to the role of a depositor in the success of a banking institution.
Awareness of how lending and receiving works
Ability to discuss the broad strokes of the banking industry
Understanding of the major components of a bank
Understanding risk, calculating figures, and examining financial data are all important components of a banking career, and this course introduces students to these concepts and more. Whether studying probability, data sets, or correlation regression, students will have a thorough, basic knowledge upon completion.
Ability to use technology and tools related to statistics
Understanding of the main types of statistical analysis
Awareness of important characteristics within a set of data
With a focus on accounting principles commonly utilized in businesses, students in this course are exposed to foundational topics in the field, including financial statements, reporting, analyzing, and interpreting financial information.
Ability to prepare financial statements
Awareness of how financial information factors into business decisions
Understanding of the lifespan of financial information
Professionals in banking come to the industry via many different educational backgrounds, chief among them being finance. Other popular degrees may include business, accounting or economics, and many of the classes taught in each of these programs overlap with the others mentioned. Regardless of the title of the major, students in these programs gain valuable insight and knowledge about the financial sector while also learning about topics within the liberal arts or sciences that will help fill out their understanding of societal and cultural forces that affect banking. Jobs for a baccalaureate graduate range from positions as financial advisors or accountants to roles as auditors or loan officers. Common courses include:
This first-year course introduces students to rules and laws surrounding individual income taxation and covers the basic laws surrounding this form of tax. Students learn about how to prepare and analyze individual tax returns and how to use common software utilized for these purposes.
Awareness of laws surrounding individual income tax
Ability to prepare individual income tax forms
Understanding of common software used in tax return preparation
Throughout the semester, students learn about how money factors into both banking and the world economy through studies of the Federal Reserve Board, monetary policies, and fiscal responsibilities of financial institutions.
Ability to explain how the Federal Reserve Board functions within the financial industry
Understanding of the role of money in banks
Awareness of monetary and fiscal policies
Students who plan to work as a loan officer or risk analyst frequently take this course. Common topics explored include credit scores, loan documentation, signs that a loan might be in trouble, and loan interviewing skills.
Understanding of the credit system
Ability to conduct a loan interview
Awareness of different risk factors affecting lending scenarios
At the master’s level students are able to concentrate their learning in topics related to banking to an even deeper degree. While associate and bachelor’s programs focus on the financial sector as a whole, a master’s level curricula will delve into topics specifically related to individual components of the industry to provide students with specialized knowledge in the area they hope to work. Some students may also elect to pursue an MBA with a concentration in finance or banking, and these programs are also excellent choices for future careers. Some of the titles a graduate of this type of program may assume include portfolio manager, investment banker, global financial services consultant, or risk management director. Common courses include:
Today’s technologies allow businesses to increase their earning potential exponentially through the use of the internet and financial technologies able to reach clients across the globe. Students learn about common electronic commerce techniques and procedures, such as e-payments, financial security, and how different industries engage with e-commerce.
Awareness of common e-commerce technologies
Ability to implement strategies to increase business growth through the use of the web
Understanding of how e-commerce fits into the banking industry
Many banking professionals elect to focus their careers in the ever expanding world of mergers and acquisitions, and this course introduces them to processes related to takeovers, bidding procedures, valuation, and buyouts.
Development of skills needed to manage mergers and acquisitions between businesses
Understanding of the laws governing capital structure changes
Ability to consult with clients about financially healthy mergers and acquisitions
Whether working with individual clients or corporations, investment portfolio managers must have an exhaustive knowledge of securities, investment options, and portfolio optimization techniques. This course provides students with a thorough knowledge of the field and offers many case studies and simulated investment projects.
Awareness of different types of investments available, and the pros and cons of each
Ability to consult with clients on investment opportunities best suited to their goals
Understanding of various portfolio selection modelss
While the majority of careers in the field of banking can be gained without a PhD, individuals who wish to conduct high-level research – at a financial or academic institution – are often required to hold this highest degree of education. Students who wish to dig into financial and market research and help shape the industry can do so after gaining the skills and expertise needed to develop and conduct research studies and analyze how data gathered informs the field. Common courses include:
With a large focus on the theory, students in this course learn about the frameworks that inform decisions about corporate finance. Classical theories are examined to understand what did and did not work before moving into a survey of modern procedures.
Many PhD students plan to pursue roles in teaching at the postsecondary level, and this course provides them with the tools to do so. In addition to reviewing common teaching methods and curriculum development, students also have the opportunity to teach undergraduate level courses.
The banking and financial sectors can be researched via countless models, but many institutions, be they academic or financial, are looking for research that fits into one of these models. Students learn about different approaches to research, problem-solving, and industry analysis through hands-on work and case studies.
Banking jobs are always in demand for one simple reason: people are interested in money. When the economy is booming, people want to know how to spend their money. When it is in hibernation, people want to save and make the most of their investments. This constant interest creates a number of diverse career paths for bankers, with many showing projected growths of nine percent or greater between 2012 and 2022. A few of these include:
An auditor is an accountant that reviews an organization’s financial records to make sure everything is above board. Auditors also use their insight into these records to recommend more efficient ways of working. Their deep knowledge serves not only a legal purpose by helping an organization remain tax compliant, but also an advisory function by helping it plan for the future.
Brokers work for investment firms to find clients and sell them securities and commodities, including stocks, bonds and gold. They must also maintain an extensive and up-to-date knowledge of how these items perform and match investments to client needs.
Budget analysts are found in boardrooms rather than in banks, working closely with an organization’s staff to craft a budget. The analysis portion takes place when analysts review managers’ budgets to make sure they add up. Once all departments are complete, these professionals consolidate the budgets and run cost-benefit analyses to see whether the organization should seek alternative ways of meeting its financial goals.
Financial analysts look at the performance of various investing tools, including stocks and bonds, to guide investors on where to place their money. Most analysts have expertise in a particular sector, product or region. For example, an analyst may understand the business environment in Japan and how a devaluation of the yen would affect investors. Others may know the ins and outs of the pharmaceutical industry and have a handle on how new government regulations would influence stock prices.
Examiners are essentially compliance officers. Although they may be hired directly by financial institutions, the largest single employer is the federal government. In this setting, examiners fall into one of two broad roles: consumer compliance or risk scoping. Those in the former role ensure banks follow legal practices for loans, while those in the latter make sure banks keep adequate cash reserves to cover losses.
Managers ensure an organization is financially stable by monitoring finances and creating strategies to protect revenue and limit expenses. They are often responsible for forecasting, budgeting, engaging in cost reduction analysis and reviewing overall performance. As managers, they also have supervisory roles over the organization’s accounting staff.
These bankers link businesses with financiers. For instance, a startup tech company may turn to an investment banker to handle its initial public offering and look for investors to scale up operations and turn a profit. More established companies may rely on an investment banker to handle a merger or acquire a smaller company.
Loan officers assess an applicant’s ability to pay back a loan through a processed known as underwriting. Officers look through financial documents and apply a formula to assess the likelihood of loan repayment. Underwriters are increasingly reliant on software to automate the process, but loan officers are still needed to provide customer service and sell loans to businesses and private citizens who might want to buy a house or attend university.
It should come as no surprise that bankers must be adept at working with numbers, but there’s more to being successful in banking and finance than mathematics and accounting.
Top professionals need all the same communication skills — both written and oral — to make the world of finance accessible to clients who may or may not have financial backgrounds themselves.
Critical thinking is a must, both because banking is fraught with risk and because profits vacillate based on the regulatory environment, seasonal trends and consumer confidence — all of which must be taken into account when making decisions.
From a successful teller to the investment banker, they must be able to sell products and services offered by the company. This includes skill sets like persuasiveness, understanding a client’s needs, and excellent oral and written communication.
Many financial positions also require certification or licensure, but these mandates are dependent on the role and, often, the employer. Most banking credentials are provided by the Financial Industry Regulatory Authority, an independent oversight organization charged by Congress with consumer protection. Brokers, investment bankers and some financial analysts must pass FINRA exams to register as representatives before they can sell to consumers. They must also earn continuing education credits on legal regulations and financial services to retain their licenses. Several other industry certifications are available, including:
Financial examiners, auditors and accountants, can advance their careers by becoming CPAs. In fact, auditors must have this designation to audit public companies. This level of certification verifies that the test taker has the skill set to knowledgeably complete all the tasks associated with public accountancy. State and local governments also use their own standards for work experience and education to license candidates.
Bankers who have worked in the industry for at least two years can take this exam from the Association for Financial Professionals. This test demonstrates that a person with this certification is competent in liquidity, capital and risk management functions.
Financial analysts, financial managers, brokers and investment bankers may earn this credential from the CFA Institute, which is completed by passing three rigorous exams. Passing the test proves competence in broad range of topics relating to investment management, financial analysis, stocks, bonds and derivatives, and a generalist knowledge of other areas of finance.
The modern banker and financial professional can expect to use software — a lot of software. Programs available today are able to produce attractive financial reports faster than a financial manager, calculate multiple risks in the time it takes an examiner to press “enter” and visualize data much more efficiently than an analyst with a marker and blackboard. Depending on their position and the employer’s software preferences, a banker might be expected to know or learn any of the following:
Intuit QuickBooks, Sage 50 Accounting
SAS, StataCorp Stata
IBM Cognos Impromptu, Tableau
Delphi, Wolfram Research Mathematica UnRisk Pricing
Corel QuattroPro, Microsoft Excel
Unsurprisingly, individuals responsible for monitoring the flow of money in the country are typically well compensated. Professionals in management positions average six figures, but salaries tell only part of the story. Bonuses and commissions heavily motivate brokers and others involved in sales. Many of the figures below, which are the median averages as of 2014, are baseline numbers offering a lot of room for growth.
The financial activities sector, which includes banking, insurance and real estate, is expected to grow between nine and 10 percent between 2012 and 2022. A closer look reveals this growth is most pronounced in two areas:
Funds, trusts and other financial vehicles
Securities commodity contracts and other financial investments.
Each of these subsectors is expected to grow 2.1 percent each year, meaning that by 2022, jobs in these arenas will have grown by 20,500 and 186,600, respectively. These projections, initially made in 2012, are already coming true. In 2012, there were nearly 7.8 million people employed in the sector; as of 2015, the number had increased to more than 8.1 million.
Aside from the benefits of job growth, the arena is also known for job stability – a surprising fact for an industry influenced by the ebb and flow of Wall Street. As of August 2015, unemployment rates across banking and insurance sectors stood at 2.1 percent, a significantly lower figure than the national average of 5.1 percent. Even during the worst of the financial downturn in 2010, the highest unemployment rate reached was 7.8 percent, more than two percent lower than the general population.
For those with an interest in the field, finance is an excellent industry based upon the low levels of unemployment and the projected job growth rates. Some states, of course, will experience more growth than others. Between 2012 and 2022, states with the largest growth for financial specialists include:
The financial services sector is a massive industry; in addition to including banking, the field is also composed of the real estate, finance and insurance sectors. The Bureau of Labor Statistics places five subsectors within the finance sector:
This arena includes bookkeepers, accountants, auditing clerks, financial analysts, and financial examiners.
This subsector is filled with employees a citizen might find at a local bank or credit union, including loan officers, loan interviewers, financial managers, and customer service representatives.
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This subsector has a heavy presence on Wall Street and big financial firms, employing brokerage clerks, financial analysts, financial managers, personal financial advisors, and sales agents.
Accountants, auditors, clerks, and financial analysts are all needed in this subsector.
Below are salary figures comparing jobs from each of the above subsectors:
Since the Bureau of Labor Statistics groups real estate and insurance alongside banking jobs, it is informative to compare the same sampling of banking careers given above with insurance and real estate jobs. Not only are salary variations apparent, but also large differences between education requirements and job growth projections.
The ABA serves as the voice of bankers throughout the country, advocating on their behalf while also providing opportunities for training, networking, events, and news in the industry.
CFAI is a leading professional body in the financial sector and maintains an expansive set of resources for qualified financial analysts.
Since 1994, IAIB has served as a global community for investment banking professionals, providing industry insights, research, and resources for its members.
The IIA is a 170,000 member professional organization serving the needs and interests of internal auditors across the globe. The institute provides a number of certifications and opportunities for training in addition to events and local chapters.
PRMIA is the professional organization for risk managers across the globe and offers countless valuable services to members. These include an exhaustive array of risk resources, training seminars, webinars, events, and local chapters.