Should you give banking the boot?
My daughter, who studies commerce in an Australian university, recently asked me whether she should change her major to something other than finance. She believes that banking is no longer the preferred career choice for commerce students. Some of my younger banking colleagues have also asked me whether they should contemplate changing professions.
My response is that every individual should reassess his or her initial reasons for choosing banking as a career in the first place. Are these reasons still applicable today and in the foreseeable future?
We all recognise that the banking landscape has changed drastically and will continue to be in a state of flux for at least a couple more years. We will face increasing regulations, tighter controls, more risk aversion, little room for innovative product structuring, and of course less pay, compensation, travel and glamour.
A steady but dreary career?
Banking is likely to revert back to basics, like in the 1950s whereby firms only lend prudent amounts on a highly secured basis to credit worthy customers, whose repayment ability and track record are historically impeccable. No more subprime mortgages, generous credit card limits and unsecured lending to weaker middle market companies. The debt and capital markets will probably be reserved mainly for investment graded companies.
I believe that, after this crisis, the banking profession will offer longer-term career stability, relatively decent wages with some gradual career progression. A banking career will offer an iron rice bowl, just like it did after the Great Depression of the 1930s. However, the job itself will be very much “bread and butter” unimaginative stuff.
Multi-million-dollar bonuses will be confined to a few highly selected individuals at very senior levels, or specialist risk-takers who trade for the bank’s account and realise huge returns within acceptable risk parameters.
Make your career change now…
If the above type of career does not appeal to you, now may be the ideal time and opportunity to try something new outside banking. Even if this move proves to be a wrong decision, there is really not much to lose. One can easily return to banking in the future without much loss in seniority or even remuneration. The banking industry is not likely to be going anywhere in the next few years.
It may hence be a good time to experiment with other opportunities, especially if you have the necessary professional qualifications. With an accountancy degree, MBA or CFA, bankers can easily become CFOs, treasurers, senior accountants etc. You can even teach/lecture at universities in banking and finance. These jobs are still available today.
…or get stuck into study
This is also the best time to get your MBA or PhD, perhaps in either Australia or the UK because their currencies have depreciated so much. Of course, if you can get a return job guarantee, that would be even better.
Some employers may even choose to sponsor your MBA course in exchange for a commitment/bond to return when you finish. After all, they save on your salary for the next two years or so. Try asking your employer to sponsor a self-improvement study programme, especially if a large percentage of the costs can be subsidised by a government scheme or agency.
…or just take a break
If you’ve cashed out of properties or stocks before the markets crashed (and have enough money to comfortably meet all your financial commitments for the next 24 – 36 months) now is perhaps the time to tell your difficult and insecure boss to “f….off”. Go on a long vacation (they are much cheaper now) and get out of the rat-race entirely.
In conclusion, the banking profession is no longer the sexiest career choice for many fresh graduates or incumbents, at least for the next couple of years. However, if you are already a banker today, you should adjust your expectations and try to survive as long as you can, or take the plunge and go outside of the profession. This crisis represents an opportunity to experiment with new career choices.