Career decisions can be tough to make. If you are a fresh graduate, you have limited roles to apply for due to your skill and experience level. But, if you’ve worked for several years, you can move to other organizations with chances of getting higher roles.
This also comes up after securing a job in a commercial bank. However, you have to be sure you love the job before you apply. You don’t want to be miserable at the end of the day.
This post explains what you need to know about a commercial bank. It also helps you understand what you need to secure a job in one.
So, is the commercial bank a good career path?
The commercial bank is a decent career path. But you must know that there is no perfect job. So, you may consider the salary and working conditions. Even as you do that, you must be sure that you love the job.
Some people may consider the job boring, while others will find it interesting. That’s why your choice must come from your passion or love for the industry, as that will keep you going even during stressful periods.
What Is A Commercial Bank?
A commercial bank is regarded as a financial organization that provides basic banking services to businesses and individuals. The services include loans, account deposits, and so on. Also, they make profits from service fees such as interest charges, overdraft fees, minimum balance charges, etc.
Commercial banks are essential for the economy. They make capital available for lending, which helps to grow the economy. Furthermore, they can serve as business, investment, and retail banking due to their extensive services and offerings.
Functions Of Commercial Banks
Some major functions of commercial banks include the following.
They give out loans to clients for a specified period and at a particular interest rate. It’s also a source of profit for them. When banks receive deposits, some percentage of the money is for loans to individuals and businesses.
They offer various loans such as mortgage loans, business loans, overdrafts, etc. Some banks also give credit card lending with higher interest rates. But it tends to have more defaults than other loans.
They accept client savings as deposits. However, deposits come in various forms depending on the customer’s choice. They include savings accounts, checking accounts, and certificates of deposit.
When you use a checking account, you can deposit money and withdraw it anytime you want. You’ll get a bank card and checkbook, which you can use to pay your bills and buy things. Most businesses utilize this account to pay their employees.
On the other hand, savings accounts receive deposits for long-term use. But clients can withdraw whenever they need it. Also, clients earn interest on their money over time. You have to pay service fees on the account. Also, it comes with monthly minimums.
Certificates of deposit are accounts that keep an amount of money for a specified period. It’s usually for as short as six months or as long as two years or more. The interest rate is also a fixed amount.
They help businesses process payments from their customers. So if such customers pay with checks or credit cards, it’s easier to accept payments and manage fraudulent transactions.
They assist their clients in moving funds to other accounts or banks. They also receive funds and transfer them into the client’s account.
Offer safety deposit:
Commercial banks provide safety boxes for keeping valuable items and documents. It reduces the risk of losing such valuables due to unforeseen circumstances like theft, fire outbreak, etc.
They also provide foreign transactions with the permission of the Foreign Reserve Bank. They help businesses and individuals convert money, despite fluctuating currency prices.
Types Of Commercial Banks
They are smaller banks that serve below the state level. Their employees are usually familiar with the clients since they stay within the same locality. Also, they give loans to individuals and small businesses.
They have a large client base than community banks, as they serve one or a group of states within a region. Some examples are Capital One and SunTrust banks.
Money center banks:
They are also known as bulge bracket banks. They are large and usually expand to international markets. They have lots of divisions that include asset management, commercial, and investment banking.
Their main clients are large corporations, the government, and other banks. An example is JP Morgan.
Advantages Of Working In A Commercial Bank
- It gives you a broad knowledge of commercial banking operations.
- Working in a higher management role like General Manager will build your team management skills.
- There’s room to get promoted and climb up the ladder within the organization. Also, you have a better chance to get a higher position when there’s a vacancy, as employees are first to know of open slots.
- There are lots of opportunities to work in commercial banks. It’s so because there are so many commercial banks in the United States.
- You’ll get on-the-job training, which will be easy if you don’t have prior experience in the role.
Disadvantages Of Working In A Commercial Bank
- It can be tiring having to sit on a desk all day, especially if your job involves analyzing multiple data.
- Some high-paying roles may be at risk in the case of non-performing asset (NPA) loans.
- You’ll need to keep up with monthly targets for most roles. So you’ll need to solicit for customers to meet such targets.
- Sometimes the job is not secure as the bank may choose to lay off staff. They may also decide to outsource some jobs.
- The constant routine of working with numbers can be boring.
- It’s not easy to move to another career because some jobs don’t guarantee transferable skills to other industries.
- It has a slow salary growth, which can take about four years or more to grow.
Careers In Commercial Banks
Some careers include:
Customer service representatives:
They assist the customers by answering questions and giving out the necessary information. They also help customers open new accounts, fill out the paperwork for bank products, and modify existing accounts.
Furthermore, they answer phone calls, help, or connect callers with the proper department.
They are in charge of analyzing business and consumer loan applications. They depend on the information they gather to make lending decisions. They do it by going through the client’s financial statements. It’ll help them determine the structure of loan requests and send the file for disbursement.
They process transactions like savings deposits, loan payments, and so on. They also answer questions and help customers understand bank products such as loans. You can work as a bank teller with a high school diploma.
You’ll also need to have customer service skills to work as a bank teller successfully.
They review customer financial history. They also process loan applications after they fill them out. You’ll require a high school diploma to work as a loan officer. However, some employers require a bachelor’s degree. They’ll likely give you on-the-job training after they hire you.
They give investment advice to individuals and businesses. Such advice includes stock and bond investments that will increase their retirement and pension plans. You’ll require a bachelor’s degree in Accounting, Economics, Statistics, or Finance to fill this position.
Their focus is on getting new clients and business development. They also have to keep a close relationship with their clients. Also, they work closely with credit analysts to deliver better services to their clients. You’ll require an MBA or a bachelor’s degree for the role.
Their role is to build a positive relationship between the clients and the bank. They also advise clients on services that will be best for their lifestyle or plans. Also, the role will require you to have a bachelor’s degree, a master’s degree in business administration, or an MBA.
They review financial reports. They also audit and manage the profits and losses of the organization. Also, they are in charge of supervising financial analysts and accountants.
The role requires you to have at least a bachelor’s degree. It also requires previous work experience in other financial jobs, usually five years and above.
They manage bank operations at the branch level. They are also in charge of reporting daily performances at the branch to the head office. You’ll require an MBA, CFA, or CPA with about 15 to 20 years of work experience for the role.
They enable the smooth running of business operations through thorough credit monitoring. They also lead and manage a large team. You’ll require an MBA, CFP, CFA, or CPA with about 10 to 15 years of work experience for the role.
What You Need To Secure A Career In A Commercial Bank
If you’re going for any middle management positions, you’ll need a bachelor’s degree or MBA. But you’ll require a master’s degree or an MBA for higher management positions. It’ll give you an edge to have working experience for more than five years.
However, a high school diploma can help you get any customer service role like a Bank teller. It’s so because you’ll receive lots of on-the-job training.
You may require extra licenses depending on the role functions. For instance, if you offer insurance or investment products as an investment manager, you have to get a Series 6 or 7 licenses.
A commercial bank is a good career path. However, it’ll be a good fit if you love the banking industry and keep up with the working condition. You’ll acquire skills that’ll move you up the ladder in the industry. That’s the great thing about this career path.
You’ll have lots of jobs to choose from in the commercial bank. So, you have to make up your mind and be ready to overcome the challenges that may come with the job.