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The commercial banking industry provides one of the most extensive opportunities for career seekers in the financial services industry. Commercial banking can be a great option whether you are good with numbers and people or want to get your foot in the door with a great company.
For recent graduates or career changers, this article will thoroughly examine commercial banking, opportunities for people looking for a new career, and answer the question, “Is commercial banking a good career choice?“
What is Commercial Banking?
Commercial banks are financial institutions that offer products and services to businesses and corporations, including bank accounts, various loan types, lines of credit, brokerage or investment accounts, and even some insurance products.
Some banks have different departments for their business’s commercial and retail branches, and some only offer their services to businesses.
If you have a passion for jobs in finance, there is an enormous amount of banking jobs in these banks since every company, from large to small, must establish a relationship with at least one commercial bank. In addition, many companies do business with several of these banks.
4 Best Paying Jobs in Commercial Banks
As with most institutions, there are many different job types available. Depending on your experience level, education, skillset, or your personality, you may be a better fit at some over others. We’ll take a look at some of the more common types of jobs available at commercial banks.
A credit analyst’s job is to make sure that the banks make money when it loans money to their customers. In addition, these analysts evaluate past and subsequent customers’ creditworthiness and try to predict how often borrowers will fail to make their required payments on time.
Credit analysts will look at dozens of different data points to do this. First, they may look at the prospective borrower’s financials and business plans. This job includes how much cash they have, past tax returns, company profits, and their outlook for future profits.
They will also look at macroeconomic data, as well as the specific financials of their client. In addition, they will look at things such as industry trends, the economy as a whole, and even pending legislation that may affect the future performance of the company or its suppliers or customers.
A commercial banking credit analyst may have a degree in a business-related field, economics, or even mathematics. The kind of people who make good credit analysts include those who are good with numbers and extrapolating predictions from the data they have collected.
For the analytical-minded, there are jobs available for financial and credit analysts. While the job may be similar, the investment analyst has a different goal than the credit analyst.
The credit analyst is trying to determine if the bank’s borrowers will repay their loans, and the investment analysts are trying to determine the valuation of a business.
When a private company decides to go public and make its shares available on a stock exchange, they often have an Initial Public Offering (IPO), which a commercial bank underwrites. The investment analysts will evaluate the company, including its financial statements, business plan, and competition, and come up with a fair market price.
Once they come up with a valuation, they usually purchase the shares from the private company and then have them listed for sale on an exchange. Therefore, it is essential to get their valuation as accurate as possible.
If they value the company too low, their clients, the business owners, founders, and private equity investors, who used the commercial bank to underwrite their business, will get shortchanged for selling their company. If they get a reputation for constantly undervaluing companies, future potential customers will go elsewhere.
Likewise, suppose they value the company at too high of a price. In that case, they will lose money themselves when the shares do not sell on the stock exchange, or the initial investors who purchase the shares at the total price will see their net worth dwindle as the shares lose value in the future. Either way, getting a reputation for getting the valuation wrong will cause a future drop in business opportunities for the bank.
An investment analyst requires a bachelor’s degree, similar to credit analysts, and many who work in either department may make lateral moves to the other department.
A loan officer is an employee who works directly with the bank’s customers to find and service loans. Much of the bank’s revenue will come from lending money to their business customers and earning a profit when the customers repay the loans with interest.
A loan officer must establish a relationship with the customer, be knowledgeable about the bank’s loan types, and then educate the customer on the best type of loan that suits their needs.
Even once the loan is made, their work needs to be completed. The loan officer must still service the loan by making sure that the loan still serves the customer’s needs. For example, the customer may have to refinance, extend the time of the loan, or even pay it off early. The loan officer’s job is to ensure that the client knows their options and helps them choose the best action.
A loan officer needs good business sense and has to be a good communicator. A good loan officer will spend time out of the office as well. Much time will be spent in the office working and meeting with clients and prospects, but they also need to be in the community meeting and establishing relationships with potential clients.
If you enjoy meeting and working with other people, you may find success as a loan officer. A typical meeting might include the following:
- Working in the office.
- Meeting with clients.
- Attending a business lunch.
- Networking with other business owners.
- Letting them know about your bank’s services.
Although a college education will help, this is a job many find successful without a college degree.
You are probably familiar with the bank teller jobs in your local retail bank, and a commercial bank has tellers who do the same thing. A commercial bank teller will usually be the face of the bank when a customer comes in to conduct whatever business they need to complete. That may be making a deposit or processing other transactions.
While it may have been a while since you have been inside your bank to conduct a transaction with a teller, a commercial bank can be a bit busier. Many retail banking customers can complete their banking online or remotely with the help of a debit or credit card, direct deposit, and even deposit checks into online checking accounts with a smartphone’s camera.
While these technology solutions are available to commercial bank customers, generally, they need to visit the bank more often. In addition, many businesses, such as restaurants, will conduct cash transactions requiring an in-person deposit. With large transactions of other types, often showing it in person can reduce the potential for fraud.
A bank teller can be an excellent job for anyone. In some cases, a high school diploma may not be necessary.
However, while the average annual salary is competitive, it will usually be less than many other jobs in a commercial bank. The good news is that many people can begin their careers as bank tellers through hard work and the ability to learn on the job, get promotions and advance to better jobs within the bank. Many loan officers, for example, begin their careers as tellers.
Is Commercial Banking and Business Services a Good Career For You?
Commercial banking is a great industry for many people and has many opportunities. However, before diving in, it only makes sense to ensure it is the right fit for you, your skills, and your future goals.
Before applying, consider the job description and make sure you would be a good fit. For example, some jobs, such as tellers, may require you to stand for long periods or work face-to-face with customers. Introverts may find that draining, and extroverts may find that exhilarating. It’s essential to find a good work-life balance that fits your lifestyle.
Other jobs may require long, irregular hours or even some travel. So, again, it’s a good fit for some and not for others.
Commercial banking jobs are plentiful, well paying, offer great benefits, and have an excellent work-life balance. However, one negative to working at a commercial bank is that commercial banking might downsize in economic hardship or recession, so it may not be the best choice for those who want excellent job security.
Commercial banks are good places to work and offer good jobs to everyone willing to work regardless of their personality, skillset, or education level.