Is Commercial Banking a Good Career Path? An Overview

Is Commercial Banking a Good Career Path?

Yes! Commercial banking is an excellent career path and if you are a fresher then it is also a very reasonable career choice. After receiving enough 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.

In this article, I will tell you what commercial banking is all about, its functions, the career paths you can follow as a commercial banker, and the benefits of working in this sector. Notwithstanding, I will advise you if commercial banking is a lucrative career path or not in 2022.

What is Commercial Banking?

Commercial banking is a type of banking that is tailored to the needs of businesses, corporations, and other organizations. The banking industry is the engine that drives a country’s economy, and commercial banks play a critical part in this by providing loans for consumption and investment. So, if you’re seeking for a lucrative career in finance, commercial banking is a good option.

Commercial banks make money primarily by charging fees for their services. Customers, for example, must pay for a loan and face the interest depending on previously agreed-upon terms.

For many services, they also charge service fees, convenience fees, and transaction costs. The majority of commercial banks now have both a physical and an online presence.

Primary Functions of a Commercial Bank

Below are the basic duties performed by commercial banks:

• 1. Commercial banks accept various financial deposits
• 2. They lend money through different platforms like loans, cash credit, etc.
• 3. They provide payment processing services in form of checks, transfers, etc.
• 4. Commercial banks provide cash and treasury management services.

Secondary Functions of a Commercial Bank

Commercial banks perform secondary functions mentioned below:

• 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?

Yes! Commercial banking is an excellent career path and if you are a fresher then it is also a very reasonable career choice. After receiving enough 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.

Salary of Commercial Bankers

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 $91,732. Though, your salary might go higher or lower depending on your specific position.

Different Commercial Banking Career Paths for You

If you want to pursue a commercial banking career path, here are some of the opportunities available for you:

Credit Analyst:

A credit analyst is an entry-level job and it is largely demanded in the industry. Before a borrower is offered money in the banking sector, they must undergo some assessment and this is the major role of a credit analyst.

They evaluate the current financial position of the borrower and carefully check the documents submitted before sending their files for approval.

As a credit analyst, you must consider the potential risk in the market like stock exchange and regulatory changes, then, you can get ready a careful report that would help the manager in their decision-making. 

This profession has enough prospects. Like, in the United States, the Bureau of Labor Statistics reported that over 72,090 job roles exist in this profession, with an average annual salary of $74,970.

Quality Assurance Specialist:

Every commercial bank carries out quality assurance each day of operation. You will make sure that every aspect of duty meets the required quality for its functionality s a quality assurance specialist.

Besides, you will need to evaluate various elements that add to the success of an organization or project. Among them is implementing the company and regulatory standards.

You will carry out a comprehensive audit and check the standards of different documents.

Your annual salary should be nothing less than $50,285, on average.

Loan Officer:

The office where the loan is handled is one of the major aspects of commercial banks. This is because giving out loans requires careful decision-making to avoid putting the company’s funds into the wrong hands.

The loan officer represents the commercial bank and facilitates loans.

Your responsibility is to assist individuals and corporate clients through the loan process, making sure they meet the standards for accessing loans and bringing the necessary documents that can qualify them. 

Typically, the salary of a loan officer in the United States is $56,885, on average. What is more, you can earn more with experience and skills.

Account Manager:

An account manager performs certain duties, among which is, enthusiastically looking out for new clients while ensuring that existing ones are adequately cared for.

If this is your role, you will find yourself working as the business representative of the commercial bank that employed you. You must have a solid knowledge of the clients and pay thorough attention to their complaints.

Ensure to provide relevant solutions to their problems and anyone that is not within your range of services can be channeled to the right source. 

The role of accounting managers is dynamic with a high demand for professionals across all commercial banks. In the United States, you can expect to receive an average annual salary of $51,000 – $71,648.

Branch Manager:

This can also be called a general manager. The branch manager ensures that the general operations of a specific branch of the commercial bank are fully maintained.

In addition, you will act as a go-between your particular branch of operation and the upper management at the headquarters.

As such, you must make sure there is a smooth running of business activities and an adequate flow of information from the top to the bottom and vice versa. This position is beyond an entry-level position.

As a result, you must have an MBA or a master’s degree in related fields.

Your average annual salary in the US is around $68,355 with certain bonuses and commissions.

Executive:

This is the peak of the commercial banking career. Most professionals aspire to get to this level because that is where the main leadership streams down from. Although most people work hard to get here, it could only be a dream for them.

In fact, only a few banking professionals get to this point in their careers. Granted, the majority of them can become a branch or other managers, but becoming one of the people determining how the odds play out does not come cheap. 

To become an executive member requires an extensive process. A master’s or doctoral degree will suffice. But that is not all. You will have adequate knowledge of the market strategy, clientele experience, as well as talent management, which is necessary. 

One of the reasons many professionals aspire to get to this position is the prestige that comes with being one of the executives of a commercial bank.

Another one is the salary range. Most executives earn as high as $198, 918 per year. Meanwhile, the Vice President earns up to $255,000 per year. 

Conclusion

Commercial banking is a good career path that helps you reach your financial objectives in life. The annual salary of a commercial bank worker is quite favorable and the job market for it is expanding each waking day.

Therefore, if you have made up your mind to pursue a career in the field of commercial banking, you have made the right decision.

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