Commercial banking is an excellent career path and if you are a fresher then it is also a very reasonable career choice. After receiving experience you will be able to work with clients and credit products like term loans, revolving lines of credit, syndicated facilities, cash management services, etc. It opens doors for different job opportunities and once you have proper skills and experience you can end up in an executive position.
- Commercial banks are popular for some specific services like business loans, lines of credit, mortgages, etc.
- Commercial banks in the U.S. control $15.58 trillion in assets
- The average salary of a commercial banker in the USA is $96,143 per year and the actual salary ranges from $83,150 – $111,697
- You must have bachelor’s degrees in accounting, finance, etc. to get an entry-level job at a commercial bank
What Is Commercial Banking?
Commercial banks are a type of financial institution that offers business loans, deposit accounts, payment processing, lines of credit, mortgages, and other general banking services mostly to corporate organizations. But that doesn’t mean commercial banks serve common people. A commercial bank also serves individual customers along with commercial clients. So the client bases of commercial banks are made of both individuals and businesses. Like regular banks, commercial banks also offer different kinds of services to their customers.
These services include proposing investment products, providing checking and bill pay services, loan services, security for large deposits, wire transfer services, processing credit card transactions, foreign currency exchange, and many more. Usually, a commercial bank has a physical location with teller windows where the customers transact. Commercial banks earn through fees for the use of their services. For example, when customers pay their loan they also have to pay the interest depending on the agreed terms. Moreover, there are also service charges and convenience fees for different commercial banking services.
Overview Of Commercial Banking Functions
Before we dig into the career path of commercial banking we must have a clear idea about the functions of commercial banks. There are two main functions of commercial banks and they are divided into primary and secondary.
Primary Functions Of Commercial Banks
1. Commercial banks accept deposits of various amounts
2. Lends money via Loans, OD, Cash Credit, etc.
3. Provide cash management service
4. Provide treasury management service
5. Provide payment processing service via Cheques, NEFT, RTGS, or Transfers
Secondary Functions Of Commercial Banks
1. Foreign exchange services
2. Payment of expenses of the customers
3. Accept tax deposits or refunds
4. Act as trustees in a financial transaction
Is Commercial Banking A Good Career Path?
In finance, you will find many good career opportunities and among them, commercial banking is one of the best. If you consider the salary, job opportunities, and career growth, commercial banking has all of it. But, if you want to build a career in this sector then you have to start from the entry level like a credit analyst. If you complete your MBA program then you might be able to start as an account manager or loan officer. Then, depending on your experience and skills you might advance to a managerial and executive level. A recent statistic showed that Commercial banks in the U.S. control $15.58 trillion in assets so it is a very large sector. Moreover, a career in commercial banking has an average annual salary of $96,143. Though, your salary might go higher or lower depending on your specific position.
Benefits Of A Career In Commercial Banking
If you are looking for some of the most compelling reasons to pursue a career in commercial banking then check the below reasons –
1. If you are looking for a high-salary job then commercial banking provides you the best opportunity. Even, at the entry level, the salary is good compared to other jobs. The salary will be even higher as you become more experienced
2. Commercial banking offers the most career growth opportunity and depending on your educational qualifications, skills, and experience you will be able to uncover higher positions in a short time.
3. Commercial banking is a thriving industry and regardless of what is happening to the global economy, commercial banks are here to stay. The services provided by commercial banks are essential and people and businesses will always need them. Moreover, this sector is growing so it provides more opportunities for employment and growth.
4. The biggest advantage of a commercial banking career is you will have tons of career opportunities to explore and choose from. You will find a job opportunity for every type of skill. So a career in commercial banking won’t limit your options.
Different Commercial Banking Career Paths
If you want to pursue a career in commercial banking then below are some of the best jobs that are worth considering. Let’s check them out!
1. Credit Analyst
This is an entry-level job and it has huge demand. Every commercial bank needs to evaluate the borrower’s creditworthiness before approving commercial or individual loans. So, the main responsibility of a credit analyst is to evaluate the current financial position of the borrower and check all the documents thoroughly before sending the file for disbursement. It’s the responsibility of the credit analyst to decide whether to approve or deny the loan application. You have to check various documents including financial statements, annual reports, and credit scores. You also have to consider the potential risks like stock market fluctuations and regulatory changes and then prepare a thorough report that is instrumental for decision-making. According to the United States Bureau of Labor Statistics, there are over 72,090 jobs in this profession and the median annual wage is $74,970.
Overview Of Credit Analyst Job
|Education Requirement||CFA/CPA / MBA from Tier -1 Universities|
|Recommended Courses||CFA/CPA/ MBA|
|Positives||You will gather vast knowledge about commercial banking operations|
|Negatives||Desk job and you have to analyze lots of loan proposals|
2. Account Manager
The role of an account manager is to actively look for new clients while maintaining relationships with existing customers. So, you will be working as the business representative of the commercial bank where you have to do one-on-one and personal interactions. You have to provide information on all the questions from the new and existing customers. In fact, you will be the main contact of the customer with the bank. You have to handle all the complaints from the customer and provide solutions for them. So, basically, you have to maintain a profitable relationship with all the clients. There are high demands for account managers for commercial banks in America’s job market and depending on your experience and skills you can expect an average annual salary ranging from $51,000 to $71,648.
Overview Of Account Manager Job
|Education Requirement||CFA/CPA / MBA from Tier -1 Universities with at least 5 – 7 years of experience|
|Recommended Courses||CPA/ MBA/CFA/CFP/FRM|
|Positives||You will have the opportunity to lead a team that will enhance your team management skills|
|Negatives||Desk job and you have to ensure all customers continue their banking relationship|
3. Branch Manager
The branch manager is also known as the general manager and here you have to maintain the general operations of a commercial bank’s specific branch. So, it will be your responsibility to hire staff, lead onboarding, train people, and make sure they are effective in their respective functions. Moreover, you will be working as a communication medium between the upper management and the employees. Therefore, you will be passing the necessary information for the bank‘s smooth functioning and reaching its business goals. If you want to become a branch manager then you must have a degree in finance and accounting. If you also have a master’s degree then you will have an advantage over other candidates. The average annual salary of a branch manager is $68,355 and there are also stock bonuses and commission sharing.
Overview Of Branch Manager Job
|Designation||Branch Manager/ General Manager|
|Education Requirement||CFA/CPA / MBA from Tier -1 Universities with at least 7 – 10 years of experience|
|Recommended Courses||CPA/ MBA/CFA/CFP/FRM|
|Positives||You will have the sole responsibility to manage the bank branch and report only to the top management|
|Negatives||Risk of hiring the wrong employee and not being able to manage the bank operation properly|
4. Quality Assurance Specialist
Quality assurance is one of the most important daily operations of a commercial bank. As a quality assurance specialist, it is your responsibility to make sure that every aspect of the operation meets the quality requirements. Moreover, you also have to assess different factors that contribute to the success of an organization or project. It means you will be responsible for the implementation of company and regulatory standards. You have to check different documents and conduct a comprehensive audit. This job category has huge demand in the job market and you can expect an average annual salary ranging from $50,285 to $61,920.
Overview Of Quality Assurance Specialist Job
|Designation||Quality Assurance Specialist|
|Education Requirement||CFA/CPA / MBA from Tier -1 Universities with at least 3 – 7 years of experience|
|Recommended Courses||CPA/ MBA/CFA/|
|Positives||You will maintain the company and regulatory standards|
|Negatives||Chance of serious legal consequences|
5. Loan Officer
The loan is one of the most important functions of a commercial bank so the demand for loan officers is also high in the commercial banking sector. In a commercial bank, the loan officer is the bank’s representative for facilitating loans. This is a more specific job compared to other jobs mentioned above. Here, your main duty is to assist individual and corporate clients through the loan process. You have to discuss the risks and solutions of various loan types and recommend alternative solutions. Usually, the average annual salary of a loan officer is $56,885 and with experience and skills, you can earn way more than the average salary.
Overview Of Loan Officer Job
|Education Requirement||CFA/CPA/MBA from Tier -1 Universities with at least 1 – 3 years of experience|
|Recommended Courses||CPA/ MBA/CFA/|
|Positives||You will have the power to decide on the loan application|
|Negatives||Risk of loan disbursement becoming an NPA|
A career in commercial banking is a good career path with extensive exposure to loans & advanced banking operations. From loan officers to executive jobs, the annual salary range is excellent and it will also ensure a favorable career trajectory. Finally, the choice is yours!
Last Updated on October 3, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.