Want a Career in Banking? Ask a Senior Banking Exec

@Catcherinthetoast has had a 30+ year career working for several of the largest domestic and global commercial and investment banks. Over this time they had a variety of senior leadership roles, managing large teams that included sales, trading, origination, banking, and lending, that culminated in their C Suite management of all operations of several large financial institutions.

@Catcherinthetoast is happy to draw on their knowledge and experience to help students who are considering a career in banking. Make sure to ask your questions below!

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Thanks for doing this @Catcherinthetoast!

Can you talk a bit about the different types of banking careers? IB gets so much attention on CC, but there are many other areas/departments that college students might consider.

Can you highlight some of those, along with the skills and background that the banks look for when filling these jobs/internships?

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I think people generally tend to conflate different types of banks. Using broad terms there are generally 3 “types” of banks of various sizes and geographic footprints.

Retail Bank- these institutions deal with consumers and small businesses and typically engage in deposit taking, traditional lending, mortgage origination and credit card services supported by a physical branch network.

Commercial/Corporate Bank- customers tend to be mid size/large or global corporations or financial institutions. Products include transaction management, revolving and drawn credit products, cash management, etc.

Investment Banks- a broad term that often includes a broker dealer (securities business), mergers and acquisitions, advisory, etc whose customers tend to be corporations, financial institutions and sophisticated investors.

None of these descriptions are all encompassing and many banks have several of these “types” of banks under their global umbrella and are licensed uniquely based on jurisdiction.

With that in mind please consider that approximately 50% of people who work for banks (retail, commercial or investment) are not bankers. Support teams (previously called back office) include areas like finance, risk, legal, compliance, operations, audit, communications and HR. These professionals ensure regulators are satisfied, staff hired, risk parameters maintained and everything else that needs to take place to ensure front office teams can support customers and produce revenue.

Most people when using the term investment bankers have visions of the aforementioned “front office” roles. Again I will use broad terms…

Sales and traders are the teams of people that facilitate the buying and selling of financial products such as bonds, equities, FX, interest rate hedges or commodities.

Capital Markets teams are responsible for supporting customers who are seeking to raise capital.

Lending Teams maintain the high level relationship with customers and are the point people for coordinating direct lending to their customers.

I bankers (traditional role) typically have both sector and product expertise and often have senior C Suite relationships that allow them to offer strategic advice and solutions. Think M&A, corporate advisory, etc.

The skills sought vary by area and in my experience there is no “secret sauce”. Both written and verbal communications skills are highly valued along with the ability to be persuasive. Proven track record of both academic success and resilience are also valued.

I often smile when reading on CC about the lack of commercial marketability of humanities majors and then attend an event where everyone at the table are former history, English and classics majors who wind up talking about Ayn Rand or the Opium Wars to contextualize a current world view. At least in my experience the more senior the participants the less “technical” the conversation with the exception of course when in deal mode, and then it’s all about the details.

Intellectual curiosity and the desire and capacity to assimilate diverse experiences and subjects into a nuanced world view seems to be the common thread of what is sought, recruited and ultimately seems to succeed.

Hope this starts to answer your question and sorry if I rambled😀

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@Catcherinthetoast: great topic, and thank you so much for doing this.

Quick question: is it absolutely mandatory (or at least highly desirable) to get an MBA after finishing college? I take your point about college majors, and I am happy that an expert in the field has a very open mind about things like humanities majors etc not being a stumbling block for a “banking” career.

I’m specifically interested in your thoughts for those who want to do capital markets or I banking work as a career.

I know there is no one-size-fits-all approach here, but your thoughts as to a solid progression from college to a job between college and further eductation to possibly B school would be welcome.

Also, during college, what kind of internships should students interested in these careers be looking out for?

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Worst of all possible responses: It depends.

I certainly don’t see the majority of our senior bankers having advanced degree (approx 1/3) and we recruit comparable to fewer MBAs (straight out of school) for associate roles than we do for undergraduate college analyst classes.

The competition for talent is fierce so if you have a talented 2nd year analyst these days you tend to be more concerned about them leaving to a PE firm then compelling them to leave as the 2 and done culture of years past did.

Practical reality is that far greater than 50% of incoming analysts come from non business academic backgrounds. Few if any of the Ivy + schools (and yes they are significantly over represented) offer a finance degree (Wharton aside). Consequently most global banks offer in house training to both level the playing field, increase productivity and retain talent. There isn’t a well defined path or pattern of kids leaving.

For many the cost of an MBA plus the lost salary dissuades them from returning to school. In many if not most cases these bankers progress and achieve at rates similar to their MBA counterparts.

With all of that said most of my peers (including myself) have advanced degrees and many of the younger talent I know who have received MBAs have leveraged those degrees into very lucrative roles.

So in my opinion mandatory no, but in certain circumstances worth the investment.

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Super helpful. I’m showing this to one of my kiddos. Nice summary.

Another area that those wanting ‘banking’ can consider is regulatory. FDIC, Fed reserve, CFPB and other agencies. Personnel tend to go back and forth for opportunities.

Agreed that “regulatory” is a profession associated with banking but it isn’t banking.

In terms of “what the job entails” regulatory work resembles law or compliance much more than the client facing and risk management aspects of most front office banking jobs that people think of when considering I banking.

Once again these important professionals are not bankers but they do work at banks. FYI there is a significant disparity in the compensation levels between these roles and those that generate revenue.

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Thanks @Catcherinthetoast for sharing your expertise.

My D joined one of the major banks right after undergrad as an investment banking Analyst. The best way to think of that role is like a medical residency (without the responsibility for people’s lives). The work can require horribly long hours at times, you sometimes go for a week with little sleep, and the work varies from pretty interesting to quite boring. The payoff is afterwards, in terms of having a lot of options.

My D was offered a chance to stay after the two year contract, but like most analysts, she decided to go a different financial firm afterwards. She didn’t feel any need to get an MBA for her career to progress, even if she wanted to stay at the bank. She noticed that the Associates, who joined after receiving an MBA, often worked in non-finance fields before their MBA, and used the MBA to facilitate a career change. The Associates also tended to stay at the firm much longer than Analysts did.

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What are the pros and cons for an analyst leaving for PE vs staying at the bank?

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I have not worked at a PE firm so I can’t describe the experience first hand but these are my comparative observations and what I have been told when trying to retain colleagues who were making the switch.

The lifestyle of junior talent is very tough as @hebegebe describes at I banks that often produces a certain grass is always greener mind set. I banks tend to be very hierarchical and you are expected to put your hours and years in to advance. It’s a grind!

After 2 years of grinding through 70 hour weeks straight of college and facing a similar hill to climb as an associate many people understandably want a change of atmosphere. Not suggesting PE work is less rigorous (to the contrary it is intense and nuanced). It does however have a reputation as being more entrepreneurial.

Big difference being you are now investing capital. In essence you are a client of the banks and a principal in terms of having real skin in the game. Translation you can quickly make a lot of money at PE firms, as you will more directly participate in the firms results as a junior.

While a well paying career, junior (below VP) I bankers tend to be paid within a band that is defined firm wide.

As a gross generalization I Bankers are largely fee takers while PE firms are investors. I bankers are always “hunting” for the next deal while PE firms are “gathering” investments.

I think the skill sets over lap but mindsets are different. I recently had a CEO at a top PE firm respond to my “what keeps you up at night” question, with a “I go to bed optimistic and wake up optimistic” response. It occurred to me that bankers in some ways get paid to be cynical and certainly senior managers are constantly looking out for the next crisis.

These cultural differences vary firm by firm but in general terms hold true.

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Just to chime in with an example of one: my son left his investment bank as an associate in order to make more money, bluntly. And to move to NYC.

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This is very helpful, thank you! Passing this information along to my youngest daughter who is very interested in a banking career.

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In my earlier post, I mentioned analysts having a lot of options after the two year Analyst stint. I want to expand upon that.

If you are at a well-regarded bank, there will be a lot of places that are interested in meeting with you. These places include private equity, venture capital, hedge funds, and even some corporate roles in mergers & acquisitions. There are literally so many opportunities that an analyst has to guide the headhunters what they are interested in.

What may surprise people is just how early recruiting starts for the post-Analyst role. I had heard that, prior to covid, headhunters would start calling Analysts within weeks of them starting a job at the investment bank. But covid delayed things somewhat, but even then my D started her post-Analyst job search about 8 months into the job (with her next job about 18 months out).

The highest comp roles are in mega-fund private equity companies like Blackstone. Apollo and Carlyle. Perhaps strangely, getting these PE roles also takes less effort than getting roles in other roles like hedge funds or venture capital. The reason is that many of these mega-fund private equity companies have their “super day” all on the same day. So after finding out which mega-fund firms are interested in the Analyst, the Analyst has to choose one of them and commit to them for their super day. If it’s say Blackstone, there’s no opportunity to interview at Apollo or Carlyle. So it’s one very intense day for both the Analyst and the private equity companies, and soon after that, the Analyst gets a decision. If they pass, they get an offer to join the private equity company 18 months later. And if they didn’t pass, they are shut out of many of the mega-fund private equity companies.

If it sounds like a sloppy way to hire people, that’s because it is, in a way. But the mega-fund private equity companies think it’s worth the risk because A) the people have been somewhat pre-vetted by the investment bank, and B) not doing it means that potential talent disappears from the market, and C) because the private equity companies are going to put everyone through another few years of 80 hours per week to find the small fraction they want to promote.

Those who aren’t interested in another few years of 80 hours per week will look at other roles, such as smaller private equity companies or roles in venture capital, hedge funds, or corporate merger & acquisition companies. Some of those companies can have work weeks closer to 50 hours per week, but at a lower compensation than private equity. It takes longer to get these jobs because whereas a mega-fund private equity company may hire dozens each year with the expectation that most will wash out, these other firms might only hire a single person or two each year, with the hope that they will become a senior member over time.

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I think it would be helpful to discuss the many finance careers other than investment banking-commercial banking, private wealth advising, treasury functions, equity research, credit cards, sales and trading…

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Go right ahead😀. I run a commercial and investment bank that has a large global (country specific) retail network.

Not qualified beyond that.

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I’m interested in your view about the synergy between commercial banking and investment banking, assuming you think the repeal of Glass-Steagall is net positive. Careerwise, they seem to be nearly completely separate for people (at least at relatively junior levels) in each of these two businesses. Success in one business doesn’t seem to translate into success in the other (Goldman is the latest example).

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