Is Commercial Banks a Good Career Path? – A Helpful Guide
Last Updated on March 9, 2023
If you have a penchant for money and numbers, you might be thinking about a career in commercial banking. Money (whether we like it or not) is what makes the world go round, and banking professionals are the individuals who help to manage that money on some level.
In other words, there will be a need for banking in the foreseeable future, and as such, there will also be a need for banking professionals.
Not only are professionals in this field always in high demand, but the commercial banking industry offers numerous career opportunities. Couple these two factors together, and the commercial banking industry is a great option for individuals who are seeking a career in the financial services industry.
It doesn’t matter whether you recently graduated high school or college or you’ve been in the workforce for a while and you want to make a career change. If you’re wondering about a career in commercial banking, read on to learn more – including whether or not working in this sector is a viable career choice.
Commercial Banking Explained
A commercial bank is a financial institution that provides products and services to various entities, including:
- Government agencies
- And even institutions of higher learning, such as universities and colleges.
The products and services that commercial banks offer are, of course, directly related to finance. They include bank accounts, various kinds of loan products, lines of credit, and investment or brokerage accounts. In some cases, insurance products can also be provided through commercial banks.
Here are just a few examples of some of the highest-profile commercial banks in the United States:
- Wells Fargo
- JP Morgan Chase
- PNC Bank
- TD Bank
- Capital One Bank
It is important to note that banking institutions feature different departments for their commercial and retail branches (meaning they serve both large-scale business customers and small-scale customers, including everyday consumers) and some service businesses only.
For the sake of this discussion, we have limited our focus to commercial banks that offer products and services to large-scale business customers alone.
What Do Commercial Banking Professionals Do?
Professionals who work in the field of commercial banking have varied responsibilities. Those responsibilities largely depend on several factors; their specialization, the size of the institution they are working for, and how many years of experience they have.
With that said, the following is a brief snapshot of some of the basic responsibilities that a commercial banker may be required to fulfill in his or her role:
- Marketing to attract new business
- Connecting with and developing relationships with clients and lenders
- Relating clients to lenders
- Formulating, negotiating, and closing commercial loan products
- Managing bank accounts for corporate, government, or institutional entities
- Providing clients with credit-related products and services, such as term loans, revolving lines of credit, and cash management services, for example
- Offering Financial insight and advice that is customized to meet the specific financial needs of each individual client
- Issuing deposit products to clients, such as checking and/or savings accounts
- Offering lending services to clients, such as commercial real estate loans, business equipment loans, and working capital loans
- Providing clients with services that aim to develop and improve their business; financial planning, brand development, and product development, for example
- Delivering services that are related to treasury management, such as disbursement of finances, fraud prevention, and asset/fund collection
- Providing financial products and services that are custom-tailored to specific companies and/or industries; investment real estate lending or auto dealer services, for instance
Commercial Banking Career Options
As mentioned, there are several career options in the field of commercial banking. As this sector offers a wide variety of products and services to corporations, governments, and institutions, there is a need for individuals who specialize in these products and services.
Professionals in this field can work in large or small banks, or they can work in other financial institutions. Typically, those who work in small banks are responsible for providing various client-related services, while those who work in larger banks might specialize in a specific area.
Career options in the field of commercial banking are related to these specializations. Job titles can include:
- Mortgage banker. Mortgage bankers are professionals who are responsible for organizing loan contracts with both large-scale clients, such as businesses and small-scale clients, such as individual consumers.
- Loan officers. Loan officers are tasked with handling loan contractors that the banks they work for provide for both businesses and individuals.
- Trust officer. Trust officers are responsible for creating unique financial plans that are customized to meet the needs of each individual client in the areas of taxation and estate law, as well as planning and investments.
- Credit analyst. These professionals assess potential borrowers’ financial histories to determine if they are responsible borrowers who are eligible for loan products.
- Branch managers. Branch managers are responsible for managing the day-to-day operations of individual branches of a bank. Additionally, they develop financial reports and plans that banks can use to achieve their financial objectives.
How Much Do Commercial Bankers Make?
Salaries in this field vary widely and depend on several factors, including specialization, experience level, geographic location, and employer.
According to the Bureau of Labor Statistics (BLS), the average annual salary for a loan officer is roughly $63,200, the average annual salary of a credit analyst is $73,600, and the average annual salary of a financial manager is $129,800.
How To Become a Commercial Banker
Education and training are necessary to obtain a career in commercial banking. The following are some of the steps that you can use to become a commercial banker.
- Obtain a degree. While it isn’t necessarily a requirement, a degree in higher education can certainly help to increase your chances of success in the commercial banking sector. It’s estimated that more than 75 percent of professionals who work in the commercial banking sector have a bachelor’s degree, and about 14 percent have a master’s degree. Business, finance, accounting, and economics are some of the key areas in which commercial bankers hold degrees.
- Gain experience. Depending on the job that you are hoping to secure, you may be required to have both a college degree, as well as experience that directly relates to commercial banking. This is often the case for higher-level jobs, as well as entry-level positions. One of the most effective ways to gain hands-on experience is through an internship with a bank or another financial institution. Through an internship, you will be able to gain a deeper understanding of the industry, such as the responsibilities, as well as the products and services that commercial banks provide for their clients. You can complete an internship while you are attending school or after you have acquired your degree. Commercial banking internships vary in terms of compensation, responsibilities, and the number of hours of work required. To find out more information about internship opportunities, you can contact the financial institution(s) that you are interested in working for, or check the career development office at your school.
- Consider securing a license. In some locations, commercial bankers must be certified or licensed in order to perform specific functions. For instance, in some states, professionals who work with loans, securities, or insurance products are required to have a license that is approved by the state. Certified public accountants (CPA) and mortgage loan officers (MLO) are two of the most common licensing requirements for commercial bankers. Look into the requirements for the state you would like to work to find out if a certification or license is required. Alternatively, the career services department at your school should be able to provide you with more information.
- Research and apply for positions. Once you have completed the necessary training and education, and obtained any certification or licensing requirements, you can begin the process of applying for jobs as a commercial banker. Search for job openings for the areas that you specialize in. For any openings that you find, be sure to thoroughly read the descriptions, including what the job requirements and duties entail, to ensure that you are qualified for the position. When applying for job openings, make sure that you include your resume and cover letter and any documents that may be required (proof of your licensure, for example). After submitting applications, you may need to prepare for and take company tests. If you are called for an interview, find out if you will need to bring any specific materials with you to the interview.
Pros and Cons Of a Career in Commercial Banking
As with any field, there are both advantages and disadvantages associated with commercial banking.
- Variety. Since commercial bankers have varied responsibilities and work with such diverse clients, work in this field offers a lot of variety. Things can change from one day to the next and from one moment to the next. Due to this variety, a career as a commercial banker should not become monotonous.
- Attractive work hours. Particularly for professionals who work in a bank branch, the work hours tend to be very reasonable. The average workday is between 8 am or 9 am until 4 pm or 6 pm, Monday through Friday. Additionally, banks are closed on all federal holidays, which means that you will also be off on those days.
- Benefits. Commercial banks tend to offer their employees great benefits packages. Benefits vary, but often include health insurance, retirement or 401(k) plans, and paid time off, including vacation days and sick days.
- Advancement opportunities. There are ample opportunities to advance in commercial banking. In fact, some employers offer to assist with the cost of completing the education and training courses that may be required to advance.
- Job security. There is a lot of job security in the commercial banking industry. While the way people and entities may change the way they handle their finances, there will always be a need for banking, which means that there will always be opportunities for employment.
- High stress. Handling the finances of others can be very stressful.
- Education requirements. Most commercial banking jobs require a degree in higher education, such as a bachelor’s or master’s degree, and obtaining a degree can be costly and time-consuming.
- Commission-based income. In some sectors of commercial banking, compensation is commission-based, not salary-based. The instability that is associated with commission-based income can further add to the stress that can be associated with working in this industry.
Is commercial banking a good career path? In short, yes. There’s a wide range of job opportunities available in this industry, earnings potential can be quite lucrative, positions often come with great benefits packages, work hours are stable and attractive, there is a lot of job stability, and working in this industry can be quite fulfilling.
If you are good with numbers and find finances appealing, then a career in commercial banking may be the right choice for you.