Is Major Banks A Good Career Path

Is Major Banks A Good Career Path?

If you're scrolling through Wall Street Oasis pages, you probably are interested in finance. Then you've also probably considered major banks. So let's talk about that.

When thinking about going into finance, most people think about big banks since that’s what most reported on in mainstream news media.

It’s a not-so-secret secret that - you can make it to the top - you will have a very lucrative life when a job is in a major bank. However, marking major banks as a good career path depends on multiple factors. These factors include

1. Personal interest

You need to recognize if you have a personal interest and other reasons to work in a major bank. Or else your time at work will be very dreadful.

2. Values

You must ensure that the moral conduct required for a finance job matches your morals.

You might land a job you think you like but have to run into moral dilemmas like adhering to laws and regulations even if you don't agree or sugar-coating your firm’s financial situations with clients, stakeholders, and colleagues.

3. Career growth expectations

The banking sector provides opportunities for professional growth and development. Some workers begin in entry-level roles and advance to management positions.
You should know (or at least have a general sense of direction) what position or level you want to advance to or what specific industry you want to enter.

4. Work-life balance

While certain jobs in the financial sector demand lengthy hours, others have more flexible hours. So when determining whether a career in big banks is the correct choice, it's crucial to consider your priorities.

5. Job Responsibilities

Depending on the role, you might be involved in tasks like loan underwriting, investment management, financial analysis, or customer service. Therefore, it’s essential to understand the duties and responsibilities of a position before choosing it as your dream job or an actual job.

What are Major Banks, and what do they do?

You've heard JP Morgan, Bank of America, Wells Fargo, and many more bulge bracket banks, so what exactly do these major banks do?

A bank is a financial institution approved to give out loans and receive deposits for checking and savings accounts from individuals or entities.

Major banks also provide various goods and services. Each service fulfills different needs of clients, such as:

1. Depository services offer certificates of deposit (CDs) and other deposit products, including checking and savings accounts.
2. Lending services provide business loans, mortgages, personal loans, and more.
3. Investment services include trade stocks, mutual funds, and other securities.
4. Wealth management services offer financial planning, asset management, estate planning, and more.
5. Foreign exchange services offer currency exchange and international wire transfers.
6. Cash management services process payments, payroll services, and electronic funds transfers (EFT)

Major banks have their hands in finance industries worldwide because they have vast networks, large amounts of capital, and highly skilled employees, providing them access to the global market. Hence, they also have many different kinds of clients:

1. Individual customers
2. Small businesses
3. Corporations
4. Governments
5. And institutional clients 

Careers in Major Banks

The most common career people think of is investment banking, but there are many more options than you would think. Major banks provide various career pathways - you can work in jobs from entry-level to highly specialized and senior positions.

The following are some examples of the different professions frequently found in large banks:

1. Retail banking

Retail banking, sometimes called consumer banking or personal banking, is a type of banking targeted to private customers rather than organizations and corporations.

Retail banking positions include tellers, customer care agents, personal bankers, and branch managers.

2. Corporate banking

Corporate banking is a type of banking targeted to organizations and corporations (opposite of retail banking). They help provide loans that help firms expand and recruit more employees, fostering the corporation's growth.

3. Investment banking

Investment banking is a branch of banking that coordinates massive, intricate financial transactions like mergers & acquisitions or the underwriting of initial public offerings (IPOs).

Investment banking resume professionals will support corporations through capital raising assistance, advice on mergers and acquisitions, underwriting new securities offerings, and more.

4. Wealth management

Wealth management is an investment advisory service offering financial management and wealth consulting services to clients from wealthy to high-net-worth and ultra-high-net-worth individuals and families.

5. Risk management

Risk management is identifying and evaluating risks, the probability of unpleasant events, the impact of potential risks, and the optimization of the realization of possibilities. 

6. Compliance

Financial compliance is the regulation and enforcement of laws and regulations governing finance and the capital market (as well as a company’s rules and regulations). It is an essential part of finance because it is considered the second line of defense for risk management in banks.

Financial compliance specialists’ responsibility is to ensure banks operate honorably and under all relevant laws, rules, and internal procedures.

7. Technology

Banks largely rely on AI and machine learning to offer their customers individualized, just-in-time services. Automating banking processes with AI and machine learning enhances client service, lending options, and credit services. Additionally, they combat fraud.

Technology specialists such as software engineers and data scientists help the bank's operations by creating and managing systems and applications.

8. Human resources

Human resources professionals are responsible for recruiting, training, and managing the bank's employees. It also manages the logistics for the bank's employees, such as benefits plans, compensation, and terminations.

9. Sales and trading

Sales and trading is a division under investment banking. It comprises salespersons who communicate with institutional investors with ideas and opportunities and traders who execute orders from superiors and advise their clients on taking and exiting financial positions.

Advantages of Working in Major Banks

Depending on several variables, you might find many advantages to working in a major bank. These variables may include your goals, preferences, skills, and more.

The following are some advantages of working in major banks:

1. Stability and pay

Major banks have a solid financial foundation because they are large and have money. That means they aren’t going to go bankrupt any time soon. This provides employees with stability and job security.

In addition, many major banks are also related to government institutions. As a result, they have a valuable reputation to uphold, ensuring employees will be treated well and get paid for whatever they do.

2. Career opportunities

Major banks offer various professional paths, and chances for development are available within the company and in other facets of banking and finance.

Companies usually have many jobs available at all levels during good economic conditions. This means the possibility of getting a promotion is also high.

In addition, major banks also have well-established branches and offices around the world. Therefore, if you have dreamed of working abroad, starting in a major bank would be a great career path because they have opportunities to go abroad.

3. Competitive compensation

One of the main reasons people want to enter the financial industry is the competitive compensation relative to equivalent same-level jobs in other fields. 

Employees at major banks have decent base pay (higher than the median pay in their respective industries) along with bonuses, benefits, and other types of compensation. Some companies even offer equity-based remuneration, such as stock options, as a choice for employees.

4. Networking opportunities

Since the financial sector is so linked and dependent on relationships among clients and colleagues, networking is an essential part of working for a major bank.

There are countless possibilities to establish and maintain professional connections if you work for a major bank, with the company, and with clients, partners, and other financial industry stakeholders.

5. Training and development

Major banks invest in their employee's professional development, offering extensive training programs, workshops, and certifications so you can do whatever they need.

Through the training or whatever program is put in place, you can also gain a lot of expertise and information by working in a major bank, aiding you throughout the rest of your career and life and assisting you in expanding your network and resume.

Disadvantages of Working in Major Banks

The following are some disadvantages of working in major banks:

1. Long hours

Your working hours at a major bank will vary depending on the particular job, division, and location. Still, it is very well-known that finance workers must work long hours and are expected to be available after regular business hours to work overtime.

For example, if you work in a high-stress and quick-paced position, such as sitting at a trading desk, you could likewise be expected to put in lengthy hours.

That’s why it's important to remember that the intense work atmosphere and long hours may not be ideal for everyone and can negatively affect work-life balance.

2. Tedious

Unless you’ve reached the top of a major bank, your day-to-day work life might be surrounded by mountains of paperwork. This might be tedious since it's not exciting like the Wolf of Wall Street. This is especially true if you work in a support or back-office position.

3. Limited autonomy

Working in a major bank means there is limited autonomy (not being able to act on your values and interests) because of the size and complexity of major banks, which can result in tight rules and procedures that staff members must adhere to.

While having restricted autonomy might have some advantages, such as better compliance and risk management, you may feel resentment and discontent since they may feel that your initiative and opportunities for creativity are being curtailed.

4. Pressure to meet performance targets

Major banks must meet the demands of all stakeholders, including shareholders, regulators, and clients, while generating solid financial outcomes.

Unfortunately, that pressure is transferred onto the employees (so you) to meet high-performance targets and expectations. 

5. Reputation risk

Because of their immense influence on the global economy and handling of vast sums of money, major banks are susceptible to reputation risk.

Hence, any negative press or scandal may significantly affect a major bank's reputation and financial performance.

For example, if Peter Griffin worked at a bank whose CEO had been involved in corporate fraud. Although Griffin’s doings have nothing to do with you, it will still impact you because recruiting companies wouldn’t know if you have involvement in those illegal activities. 

Researched and authored by Alisa Zhu | LinkedIn

Reviewed and edited by Parul Gupta | LinkedIn

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