Make a career of money! Discover a future in banking

Last updated: February 10, 2006 | 00:00

3 MIN READ

Maria E. Kallukaren reports on an interview with Dr Helen Lange

What is banking all about?
Banking is an international business that services global economic activity.

Many banks have assets that are global. This can be directly through international customers or indirectly through the purchase of international financial securities (such as government and corporate bonds).

Banks operating in the international markets face additional risks to those operating in a domestic market. The latter tend to be much smaller, operating at a retail level - i.e. for small consumers and small businesses.

How has the banking and financial services industry evolved?
People have been borrowing and lending money in one form or another for thousands of years. Organised banking is about 500 years old or so.

In the 1980s, the West began deregulating financial markets, consequently the risks faced by banks began to increase.

So whereas much of the role of a banker in the 1970s was administrative, these days a banking career has more to do with managing risks - risk management.

The skills needed

A career in banking requires much greater education today.
While relationship skills are critical to banking, the ability to identify and assess increased risks to the bank is a key additional capability.
New roles in the area of risk management/hedging/minimisation have been developed.
Banks used to operate on very wide profit margins where there was a lot of room for error. However, in the competitive, deregulated markets, the margins are very small. So more specialists are needed to manage, as small errors can eliminate profitability.

Stress levels of the job

Generally, the banking role is stressful for two reasons:

Banking is a day-by-day role, and so banks need to "balance their books" every day. Information flows to the bank's risk managers every day so that they can ensure that all risks are covered on a daily basis
Banking is a service industry, with a large emphasis on customer service. This adds stress. But it is also what makes the role more satisfying as you have the opportunity to assist people in fulfilling their life's dreams

All banking roles require a combination of relationship capability and technical expertise. There are roles for people with all types of temperament and capabilities in banking.

The more technical the role, the more tough minded you have to be. Most jobs in banks require decisiveness and quick thinking. The more satisfied the customer, the better the business, and the more decisive and helpful you are through quick thinking, the more satisfied your customers are.

Programmes that help prepare you

As there is a broad spectrum of capabilities required, you could say any.
But it does help if an employee has a business degree so that they understand the basic financial risks on the one hand, and the role of banks in assisting economic activity on the other.
For more technical roles, mathematics and statistics qualifications are usually required.
But don't underestimate the role of relationship management in banking.
The best banks put a lot of emphasis on this, and so technical skills do need to be balanced with the softer skills.

What about work experience?

Banks usually have a full range of experiential roles from training roles to the very experienced.
They are also large employers and so have a responsibility to train and develop staff in building capabilities.
Many banks assist staff in gaining higher qualifications such as MBAs; some organise this directly for their staff.
It would be unlikely that anyone goes into a higher level role in a bank without some experience, but it may not necessarily be in a bank.
All jobs in banks need some training, and all have entry-level roles.

Who is Dr Helen Lange?

She is associate professor and director of the MBA Programme at online business school Universitas 21 Global.
She was on the faculty at the School of Banking and Finance at the University of New South Wales.
She teaches principally in the areas of financial management, financial risk management and bank management.

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