Do you mostly ask whether commercial banking is a good career path for you? Do you enjoy playing around with numbers? Are you passionate about finances and how best to save or invest money? Are keen on seeing people grow their money?
If your answer to the above is yes and you are looking for an excellent career path that would help you live your dream, commercial banking will offer you just that. It opens doors for several job opportunities and with the right skills and experience, you can find yourself as an executive director. This position does not come cheap.
But never mind, that is why we have put up this article for you. we are going to look at 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.
Table of contents
What is Commercial Banking?
Before defining what commercial banking is, we need to understand what a commercial bank is. A commercial bank is a type of financial institution that offers business loans, deposit accounts, lines of credit, mortgages, payment processing, and other banking services.
Commercial banks serve individual and business clients and offer several kinds of services to them.
Some of the services offered to the customers include proposing investment products, providing checking and bill payment services, foreign currency exchange, and processing credit card transactions.
By offering these services, the customers pay certain amounts as fees. These fees are what pay the salary of a commercial banker. Aside from these fees, customers pay service charges to the banks for different services rendered.
Similarly, commercial banking is a kind of banking particularly developed for businesses, corporate bodies, and organizations, among others. No country can do much without the banking sector as they drive a country’s economy.
They offer special services to the government, individuals, and organizations.
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Functions of Commercial Bank
Commercial banks have various functions based on the need of their customers. However, these functions can be classified into two, and they are primary and secondary functions.
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 the 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
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Is Commercial Banking a Good Career Path?
There are many good opportunities for those in the financial sector. However, among them is the commercial bank standing tall. Regarding job opportunities, salary, and career growth, commercial banking is a good career path.
However, you must start from entry-level jobs to enable you to climb the corporate ladder easily. You can take up a role as a credit analyst with your bachelor’s degree. When you complete your MBA program, you may get a higher role as an account manager or loan officer.
Depending on your experience and skills, you may push forward to an executive or managerial position.
Commercial banking is a huge sector and it offers both careers and funds to the people and government.
For instance, in the US, commercial banks control around $15.58 trillion in assets. The average annual salary of a commercial banker in the US is around $91,732, depending on your 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 that is largely demanded in the industry. Before a borrower is offered money in the banking sector, they must undergo some assessment, which is a credit analyst’s major role.
They evaluate the borrower’s current financial position 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 the stock exchange and regulatory changes, and then, you can prepare 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 ensure 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 an organisation’s or project’s success. 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, ensuring they meet the standards for accessing loans and bringing the necessary documents to 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.
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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; anyone 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 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 commercial bank branch are fully maintained.
In addition, you will act as a go-between between your particular branch of operation and the upper management at the headquarters.
As such, you must ensure 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 a related field.
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, and 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.
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Frequently Asked Questions
Bottom line
Commercial banking is a good career path that helps you reach your financial objectives. The annual salary of a commercial bank worker is quite favourable 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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