Corporate Strategy for Financial Institutions
Correct me if I am wrong, but I believe WSO is lacking a solid thread on Corporate Strategy for Financial Institutions (e.g. banking, capital markets, Asset Management, insurance...). Why is that?
I have seen numerous Corporate Strategy / Corporate Development posts for other industries, but very few for Financial Services.
I am glad to initiate the discussion, the objective being for the experienced monkeys to share their knowledge regarding topics like: job & responsibilities, pros & cons, hours & salary, breaking into & exit opps,...
To get things started, let me introduce myself: +2 years of post-graduate experience in Corporate Strategy/Business Development for a Top global bank. Currently based in NY. Frequent lurker, first time poster on WSO.
I'm thinking many of you Monkeys still in school may not fully understand what the Corporate Strategy function of a financial institution actually does....but don't worry, you're not alone. I'm surprised by the number of people I talk to at my bank who have no clue what my group does. I'm not criticizing, it's great to be a specialist (whether in trading, M&A or others) but I believe it's enlightening for everyone to try and understand the bigger picture as to how financial institutions are managed.
Especially since, in my opinion, Corporate Strategy ranks among the most interesting roles you could have!
OK then, feel free to ask any questions you may have at this point!
What are your day to day responsibilities?
On a daily basis I'm usually exchanging with, and providing advice to, the management of the business lines that I cover, as well as with the management of the wider organization, on a variety of topics including corporate strategy, business opportunities, potential deals, key client relationships, the impacts of regulatory reform, among others.
I am often brought to represent, and speak on behalf of, these latter business lines in discussions with bank top management (CEO, COO, Head of Legal, CFO, Head of Compliance, Head of Corporate Governance...).
In addition, I work on a project-basis leading business development initiatives, executing investment or divestment transactions, identifying and implementing business & cost synergies.
Based on this, I would be curious to hear what you think the pros and cons of this position might be!
OK, I am genuinely interest in this. Thanks for this.
For starters, is the Firmwide Strategy Unit in the Finance Div of Goldman an example of what you are talking about? Or the Firm Strategy and Execution Div at Morgan Stanley? This is considered to be a "Middle Office" function, correct?
And then the usual questions aimed at UG recruiting:
2.What is the pay like for Analysts? How does it progress?
Exit Ops? What do people do after doing this? How is the B-School acceptance rate?
Do you have summer analysts?
How does Associate recruiting work?
My dream gig, where I ultimately want to end up is the Strategic Planning Group at American Express.
I genuinely don't understand the point of classifying a position like this into middle/ backoffice or whatever.
These labels make sense in the context of directly supporting a business (i.e. operations or credit risk which directly support a trading desk.)
Ultimately, the functions may not directly generate revenue, but technically, neither does the CFO.
Well, I certainly did not come up with this idea, whatever I know, I learned from WSO. From what I've read so far, "Middle Office" are the more "respectable" non-revenue producing divisions. Don't want to debate this; I'm just stating what I've read, but I do tend to agree with that classification. (I had started a discussion last year on what constitutes MO, and there were some great replies. I'm basing my answers off that thread)
Middle Office includes:
Risk (Market & Credit) Treasury Corporate Strategy...which is what this thread is about.
The simple answer is: no, “Middle Office” is not the accurate designation for Corporate Strategy.
Let’s go back to basics! The ordinary modern-day corporation (across most industries) has 1 or more business lines (meaning distinct business activities), above which in the organization chart you would find what are called “corporate functions”. These functions are transversal in nature since they service the different business lines. Such functions may include: corporate strategy, legal, tax, finance, communications, HR, compliance, marketing, IT, etc...So there you have it, the accurate designation for Corporate Strategy is “function” (also known as “support function”).
I am sadly aware of the obsession of many on this website to categorize activities into either FO, MO or BO. To be fair, this approach is indeed useful to help you prospective monkey better understand the different responsibilities & roles that exist within the Capital Markets activities of banks or other financial institutions.
However, I would like to stress the following: these classifications are usually only relevant to market-related activities (trading, securities services, brokerage...). The front, middle and back offices have distinct responsibilities throughout the life-cycle of a trade, with the middle office being responsible for the booking of positions / manages position-keeping.
Yes, some people may loosely apply these terms to non-market related activities, but I believe it is inaccurate to do so. I just wanted to clarify these aspects (which I hope will be useful to some of you out there), but let’s avoid further debating this if possible, and stick to the Corporate Strategy topic!
Yes, those are two examples of what we may refer to as "Corporate Strategy" groups. Different firms give different names to their Corporate Strategy team, and their responsibilities may differ as well (e.g. some groups are more financial in nature, some are more operational). Other potential names could include Corporate Development, Corporate Planning, Strategic Planning, Strategy & Business Development, Business Strategy, Internal M&A, Internal Strategy Consulting, etc...
I'm happy to provide some preliminary answers to your questions, based on my experience within my current firm, and hopefully some other Corp. Strat. monkeys will weigh in as well.
Overall, I feel the recruiting process is less standardized than IB for example, since there never are many open positions at any given time, and because internal recruiting is often favored over external recruiting for these positions. Networking your way into these positions is quite common: you need to know the right people, so as to be there at the right time when a position opens (as opposed to going through a formal application process). That being said, you will regularly find Corporate Strategy job postings on Career websites. Target schools obviously have the upper hand, but solid prior experience can get you in, even if you're from a non-target.
Recruiting and pay for these positions will vary from bank to bank (leaving aside other financial institutions for now). Some firms may hire (summer) analysts , some might prefer more experienced hires (associates and above), it really depends on the size of the firm, the nature of its activities, the expected acquisition deal flow, the expected growth prospects. Usually, investment banking and / or strategy consulting experience is required.
In terms of Exit Ops, I've seen the more senior people transition into Executive/Management positions with the businesses they cover. Moving to M&A and Finance is common. Outside of banking, strategy consulting for financial institutions is a natural exit opp. For the more junior people, B school acceptance will naturally depend on your overall profile, and on whether you have built a compelling story around your application. I do believe you somewhat stand out a bit with this type of experience, which gives you an opportunity to differentiate yourself from the mass of IB applicants.
Thank you so much for detailing this. However, I'm curious as to how a person would transition from corp strategy to M&A and finance, as you noted, when the line of work seems quite drastically different. Would you be able to further comment on this? Thank you!
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Glad you brought this topic up. I'm currently one year into a finance rotational program with a mid-level commercial bank (>70b assets). Corporate development and treasury are next. Your description was pretty broad, can you talk about a specific project/assignment that you found interesting?
I really want to end up in corporate development to get some transaction exposure, then hopefully leverage this for PE later down the road. However I from what I gather it doesn't seem like acquisitions happen too frequent in the financial world. Have you seen anyone move from corporate dev to investing?
Thanks! Very interested. How often do you travel?
Thank you for your great post. I am graduating this year and joining one of the MBB in one of its Asia offices. I have a keen interest in financial industry.
I have some questions about corporate strategy career.
I plan to work in consulting for 2 years and get an MBA. How difficult is it to break into corporate strategy at a top global financial institution in the US for post-mba position given my consulting background.
my long-term goal is to work in a top management position at a financial institution(probably back in my country after 4-5 years of work experience aboard). Is the career track of corporate strategy would get me on the right direction?
Given my long-term goal of being a in a top management, would other career track in a bank would be a better option, for example, M&A banker associate, corporate banker, or rotational program associate?
Thank you very much for taking the time to write such a great thread.
So glad I found this post! Thanks a lot for starting this thread! I'm currently doing an MBA and have been invited to interview for a Corporate Strategy role for a global bank's institutional banking div. I'd be super grateful for some guidance on the recruitment process / type of case study etc. Thank you!
Any color on typical hours per week in corp dev at a bank? Have heard Citi has rough hours in their internal m&a group
I think this is called FIG banking
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