Be ready for the next big Banking boom
A wide range of career options exist for graduates in the financial services sector
Mohit Jain and Romit Choudhury
In today’s globalised world, the economic success of any nation bears a strong correlation with the success of its financial sector (and so also does economic crisis, as some will definitely point out). The script has been played exactly same for India where the post-liberalisation growth (14 times from Rs 5.15 trillion in ’91 to `73.1 trillion in FY’11) has been fueled in significant part, by the growth in the banking sector. Deregulation of banking norms and licenses to private players other than the public sector banks increased competition over the last two decades. This has led to more efficiency in capital and asset management in the back end & better and wider customer service in the front end. Net result has been robust domestic banking sector growth, with Bankex (Index tracking the performance of leading banking sector stocks) having grown at an aggressive compounded annual rate of about 31 per cent between ’02-’12.
Banking industry 2.0 (2012 onwards)
However what many of us are not aware of is that the next big set of banking expansion is to hit India in the next half decade, making it one of the most lucrative employment sectors. India is expected to grow at a CAGR of 7.3 per cent over the next 20 years, with the consumption power of middle class rising at a very fast pace. Within this growth, a significant part would be the growth of the Banking, Finance and Insurance (BFSI) sectors catering to the consumption, at rates >10 per cent CAGR.An IBA-FICCI-BCG report estimates that India’s gross domestic product (GDP) growth will make the Indian banking industry the third largest in the world by 2025.
Strong policy-making and government endorsement in the form of de-regulation of savings rate, guidelines for new banking licenses and implementation of Basel Norm III will aid this growth. Other factors that will help the financial sector to grow rapidly will be further rise in per capita income leading to increased growth of retail credit and new channels of convenient banking like mobile banking which will become the second largest channel after ATMs. Finally better financial inclusion program (currently 41 per cent of adult Indian population do not have a bank account revealing the potential) will ensure huge penetration to the untapped market leading to aggressive bank growth rate.
Significant need for talent
With such huge growth, the sector will look actively to recruit talent to fill both current positions and new ones. It is estimated that over the next one decade the financial industry will active seek to employ anywhere between 26 to 42.5 million people. Out of this new roles would be around 15 per cent (3.3 million to 5.2 million) while fresh graduates will get entry to another 10 per cent jobs as the incumbents to the existing positions retire. The maximum human resource need will be in the Banking sector followed by Insurance, NBFCs (non-banking financial companies), Mutual Funds & Intermediaries as shown above. No other industry, except IT, shows the potential to create so many white collar jobs in the country in the near future.
Career options for graduates
A wide range of career options exist for graduates in the financial services sector. These vary from product development to operations to customer service. While most people are under the impression that a banking job means being a relationship manager or a clerk, those are only true for front end retail banking and a typical bank would also employ a wide range of financial experts in their treasury, operations, investment & wealth management divisions. Fresh graduates can be employed either in sales and marketing as a front-line customer business development manager or a relationship manager with a focus on soft skills and engaging customers, or in operations as an analyst or a project manager with a focus on quantitative finance and economic analytical models. The careers in the sector can be quite rewarding in terms of total compensation including perks, especially if one lands a job with one of the many foreign players such as HSBC, which present significant opportunities for a global career. Other sectors such as Insurance (Life, Health, Automotive, etc.), Home and Education loans, Mutual Funds, Microfinance, Credit cards, etc. are all growing at double digits.
Route to required qualifications
Ideally to build a career in finance, people can pursue one of the two paths — study for a qualification in finance (at PG level — MBA or PGDM Finance, Masters in International Finance, Masters in Quantitative Finance; at UG level — BBA in Finance, BFI, B.Com (H)) and get the well known and highly regarded certifications of Chartered Accountancy (CA) or Chartered Financial Analyst (CFA) to boost your career prospects or join a bank/ insurance firm and climb the ladder, learning on the job and growing in the old fashioned way. However, the current set of programs in India do not provide too many options to students to specialise in Finance with only a handful of programs at PG and UG level offering the depth of curriculum and credibility of a recognised name. On the government side, we have the IIMs and some of the university programs such as the MBA at FMS in Delhi, which are well respected for their rigor and quality of students; and at the UG level, colleges such as Sriram College of Commerce and Presidency College Kolkata. A handful of established and upcoming private education programs also show the promise of imparting high quality education and helping develop young professionals.
No matter the choice of program or qualification, students need to ensure a strong grasp of the subject and build the right technical expertise, to be successful in this sector. Also, it is equally important that the students focus on general employability skills such as research, presentations, communication etc. to develop a well rounded personality, which is essential in the rapidly evolving landscape, where one has to wear multiple hats at the same time. n
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