It’s a Rich Man (Or Woman’s) World
So you think you might be interested in banking. But how much do you really know about this popular yet often misunderstood sector of finance? Read on to get the lowdown on both investment and retail banking, and to see if it’s really for you. Case Studies by Kate Hilpern
If you are considering banking as a career path, you should think about which area interests you – do you want to go into investment or retail banking? Many graduates are attracted to Investment banking, which covers a variety of financial activities: trading; mergers and acquisitions of companies; corporate finance (helping companies to make money); fund management, including investment advice; and private equity (investing directly in companies). Often what draws graduates to investment banking is the money. After years of low-budget student life, it can be enticing, with some starting salaries at around £35,000. But although you can earn a lot, it is often relative to the time and work you put in. The job can be demanding and can require massive commitment.
So how competitive is it?
Just as an example, eight places at Citi attract about 2,000 CVs – and that is only at the first stage. If your application is accepted, then what follows is multiple interviews with senior members of the company, and assessments of your analysis and presentations skills in front of managing directors.
With such choice, banks can keep a high standard of applicant, as they can choose only the very best from the crop. However, some events are arranged to target minority groups and female applicants, introducing them to the world of investment banking. Around 40 per cent of successful applicants are female, so ignore any stereotypes you may think of when you dream of working in the City.
what kind of person makes a good investment banker?
Often investment bankers describe themselves as bright, motivated and active people, and in such a fast-paced and powerful industry these are all important attributes. In many cases, part of the salary is performance-related, so to earn good money dedication is important. If the job really stimulates you, then you will have the enthusiasm to give it everything you’ve got. But if it’s just the money that is getting you excited, then it would be difficult to succeed in the business. It is not something that can be done by halves.
So what exactly happens in an average day?
Your working day would start at around 6am, when you read the Financial Times and market updates. You would set up meetings early on to discuss the day’s trading, opening opportunities and important updates such as exchange rates. The bulk of the day then depends on your specialist area. For example, trading often involves putting together company profiles and attending presentations. In most roles a lot of time is spent advising clients on decisions, especially corporate finance, where forming relationships with businesses is paramount. In investment management, producing reports and accounts for sales pitches is important. You have to be accommodating; in this business everything is client-based, and if that requires putting in the extra hours there is no question about doing it. Clients will always come first. However, you will usually also get the chance to train and socialise in a more informal setting – many firms offer training "buddy" schemes and non-work-related activities such as societies.
What about retail banking?
While investment bankers deal with corporate or commercial customers, retail bankers will typically be based in high street branches, and can work with either corporate or private customers. The roles themselves can be very varied, with graduates often on a fast track to manage a branch. You will often have sales targets to meet and, depending on the role, you will spend a lot of time dealing with members of the public. Annual salaries on the whole will be less than for investment banking, but in return the hours will be much better.
How do I start?
Even if you think you have what it takes, without some previous experience or an internship within the company you may not be able to get a foothold in banking. So careful forward planning is important. Most application deadlines for summer internships are as early as January, and most applicants are penultimate-year and final-year undergraduates, many of whom plan to apply for graduate schemes in the future.
Placements often give in-depth training and the chance to make valuable contacts. The time and money that a bank invests in you as an intern makes you a potential asset to the company – an advantage when you apply for jobs afterwards. Even if you decide not to stay in it, a background in finance helps in many other career paths. Many companies see the skills you acquire in this sector as a positive learning experience.
But if you don’t manage to get an internship don’t be disheartened – they aren’t the only way in. If you have clear evidence of transferable skills and a proactive attitude, the other things you have done will show your potential. Employers often stress that diversity is important and that they are interested in the individual. They will focus on your personal achievements, and skills learnt during your education.
Some key advice for potential candidates is: do your research, regularly read The Economist and the Financial Times, use every opportunity to make and keep contacts, and understand the attitude and commitment expected. Many potential employers will expect you to have researched the kind of role you are interested in, and to focus on that. So prepare for the difficult questions that may come up.
One thing about banking is certain: those who succeed in the field tend to be the ones who put the most into it, and who as a result get the most back.