First-time job seekers have a hard time deciding on their career options. Especially in the post-COVID world, where many industries have undergone massive transformations, the choice has even become tougher. Typically, the choice of a career by first-time job seekers is driven by two factors: 1) Availability of opportunities 2) Skills, knowledge, and interest of the job seeker.
In terms of opportunities, the banking sector offers a lot of promise to first-time job seekers. Let us understand why first-time job seekers should consider banking as a career option.
Based on official data, at the end of March 2018, there were around 1.38 million [MK1] bank employees and officers. In addition, the National Skill Development Corporation (NSDC) estimates that the banking sector will require 1.6 million skilled personnel (over and above the existing workforce) by 2022[MK2].
The demand for people in the banking sector is also proven by historical data. Based on 2017 data on sectoral employment, banks employed the highest number of people (around 21% [MK3] of total employees) in that year. Banks were among the few sectors that witnessed employment growth in both FY16 and FY17.
The question is, who employs so many people? As of 2019, there were 27 Public sector banks. As part of banking sector reforms, this number will come down to 12 banks, so they are unlikely to be a significant generator of jobs.
However, there are private sector banks (21), foreign banks (49), regional banks (56), and urban cooperative banks (1,500 plus). In addition, there are numerous rural cooperative banks (96,000) and non-banking finance companies or NBFCs (approximately 10,000), which are likely to require more staff in the years to come.
There are also various payments and small finance banks that are likely to require more employees. Then there is also talk of large corporates being allowed to run banks. An RBI panel has recommended that corporates should be allowed to control banks. If the recommendations are accepted, it is likely to give a big boost to the banking sector.
However, there will be a massive difference between pre-COVID and post-COVID banking. In the post-COVID world, the adoption of digital banking is likely to increase. A lot of banking transactions, whether corporate or retail banking, are likely to happen digitally. While banks may reduce the number of branches, they still must serve their customers.
They will require a young and agile workforce that is digitally savvy. They will expect employees to be data literate who can make data-driven decisions. Banking is expected to become even more smart and efficient and will require a smart workforce that is able to think out of the box.
Digitization will open more opportunities in banking than in the pre-COVID world. Traditionally, banks required people with knowledge of accounting and finance. The banking sector was perceived as a career choice only for students of commerce or MBAs. However, with the rise in digital banking, the banking sector will require people with knowledge of artificial intelligence, blockchain, biometrics, advanced analytics, cybersecurity, and machine learning.
Post-COVID, there will be more opportunities for first-time job seekers with knowledge of emerging technologies, in addition to those with knowledge of banking and finance.
Apart from retail banking, the sector also offers opportunities in other sectors, such as corporate banking or investment. After all, banking is much more than retail banking. Investment banking offers many lucrative roles in mergers and acquisitions or sales and trading. Corporate banking offers exciting roles in credit analysis, trade finance, supply chain finance, and project finance.
Then there is a whole gamut of opportunities in private equity, venture capital, and equity research. Apart from front-office roles, banking offers many back-office roles in internal audit, compliance and fraud, and risk analysis.
FinTech is another sector that is expected to grow a lot faster in the post-COVID world. According to government statistics, the value of digital payments (at $65 billion in 2019) is expected to grow at a CAGR of 20% by 2023[MK4].
During the pandemic, a lot of customers moved away from traditional banks and moved to FinTech lending companies to meet their funding needs. [MK5] Even the retail consumers (both rural and urban) are expected to rely on FinTech lending companies to avoid documentation or to avoid getting exploited by loan sharks.
Banks are expected to partner or even acquire FinTech companies to provide solutions for their customers. The rise of FinTech is expected to create a lot of jobs, both in technology as well as in customer service. FinTech will also create other jobs such as business analysts, risk analysts, product managers, and so on.
One of the challenges in the banking sector is high attrition at the entry levels as a lot of candidates do not have the required skills. As compared to earlier, banks now employ more clerks and subordinates. Officers account for nearly two-thirds of the total working in banking while subordinates and clerks make up for the remaining one third.
The ratio is even more tilted in private banks, with 95% of bank employees being bank officers. This is dramatically different from 15 years ago when there were subordinates or clerks and fewer bank officers. Modern banking has become highly specialized and requires technical skills as opposed to the earlier demands of basic clerical skills.
Job seekers can overcome these challenges by investing in courses that are customized to meet the needs of the banking industry. UpGrad offers advanced courses in digital finance and banking. The curriculum of these subjects has been developed in close coordination with the industry.
upGrad’s MBA in Digital Finance and Banking provides extensive training on different aspects of banking and digital finance. The course offers a blend of fundamental subjects related to finance, accounting, and economics and new-age subjects such as managing fintech ecosystems, data protection, financial criminology, etc. The focus on constantly updating the curriculum to match the demands of the industry has made upGrad a preferred choice of BFSI to find new talent.
[MK3]I had to use old data because recent data on sectoral employment is not available