Banks, mutual funds
and brokerages
PATHFINDER Working in the banking and financial services sector is challenging and pays
well. It’s important however, to understand the different roles, writes H Jaishankar
A
re you in your final
year of college and
have you been won-
dering, what next?
Accounting? Writing
code for a software company?
Call centre executive? Can you
think of a sector that hires over
a million people, pays well, and
transacts in billions of dollars?
It’s the Banking and Finan-
cial Services (BFS) industry.
This includes a wide spectrum
of roles across banks, mutual
funds and brokerages. Don’t
forget that over 30 per cent of
IT and BPO companies’ rev-
enues come from servicing this
industry. People move across
banks, NBFCs, IT firms and
BPO companies, using their ex-
perience for a range of roles.
Roles and responsibilities
Broadly, BFS players are divid-
ed into Banks and Non Banking
Finance Companies or NBFCs.
What’s the difference?
The key difference relates to
what you do regularly, without
even thinking about it —with-
draw money whenever you
want! A bank is the only institu-
tion that is licensed to accept
deposits which are repayable
on demand — i.e. whenever the
depositor wants. A bank col-
lects money from depositors at
a certain cost, and makes mon-
ey by lending it out or investing
it for higher returns.
Working in BFS is interest-
ing, challenging and pays well.
It’s important however, to un-
derstand the different roles, and
the skills needed for each. Don’t
look for the ‘glamourous’ roles
— look for those where your
personality and skills will en-
sure you perform well. If you
enjoy what you do, you’ll do
well.
Given this background, let us
then understand the BFS world.
The key businesses in BFS can
be broadly classified into six
sub-divisions or verticals:

Retail Banking & Finance

Corporate Banking & Fi-
nance

Private Banking & Wealth
Management

Treasury & Capital Markets

Investment Banking
Maruti wants to pay a million
dollars for imports, it can’t buy
this foreign currency on its own
— it has to go via a bank. Banks
also trade on their own behalf.
Institutions in this space:

Banks: Stock, bond & cur-
rency markets

Brokerage firms and Mutu-
al Funds: Stock and bond
markets.
Banks usually hire MBAs and
CAs for trading roles. Gradu-
ates have a good chance in the
brokerage firms and Mutual
Funds.
Investment Banking
(‘I Banking’)
This ‘glamourous’division cov-
ers activities such as:

Mergers and Acquisitions
(M&As)

Raising capital (via shares
or bonds) also called Mer-
chant Banking
Management graduates
from premier business schools
tend to be offered these posi-
tions. However, if you have the
necessary skills, there is nothing
stopping anyone entering this
sometimes over-rated space.
Remember, from a job per-
spective, the numbers here are
very small. So don’t get ob-
LET’S TALK MONEY Wealth management is considered to be the next sunrise sector. There is a huge gap between the numbers sessed with I-Banking. While it
that wealth management needs and available resources. GETTY IMAGES may sound glamourous, you
will probably be involved only in
preparing presentations and

Asset Management Loans generate income for Corporate Banking and ing profitable investments for Excel sheets for the first year!
the bank, and are called ‘asset Finance such clients. Traditional bank-
Retail Banking products’. The main responsibility of this ing needs (deposits, cards, oth- Asset Management
Retail, or individual banking, Therefore, in Retail Banking, division is to lend, and the target er services) of a client are also Mutual Funds are an integral
handles the banking needs of you either work on the liabilities segment is corporates — large catered to by a specialised Rela- part of the BFS world, manag-
individuals and small business- side or on the assets side. and mid-sized corporates. They tionship Manager. It needs, ing over Rs 400,000 crores of
es. The primary role is to mo- Second — and most impor- give short-term loans, called therefore, an understanding of funds. The legal entity manag-
bilise deposits for the bank, via tant — the Retail Banking divi- working capital loans, and long- various banking products and ing the funds is called an ‘Asset
savings accounts, fixed deposits, sion is typically the largest re- term loans called term loans. services, as well as investment Management Company’, or
current accounts, etc. cruiter, especially for graduates. Corporate Banking also of- products such as mutual funds. AMC. AMCs hire graduates
Retail loans are popular — Most people don’t bother to fers services to corporates, such Watch out for this sector. It is and post graduates in sales and
personal loans, education loans, study much about it, and busi- as trade finance and cash man- definitely the next ‘hot’ or sun- research roles.
vehicle loans, home loans and ness schools ignore it but it agement, to help them in the rise sector; there is a huge gap What do we mean by re-
credit cards. They also offer makes perfect career sense to course of their business. between the numbers that search? Well, for them to invest
services such as lockers, de- understand this division and Corporate Banking hires rea- Wealth Management needs, all that money, they need to
mand drafts and foreign cur- start here. sonable numbers, though most- and available resources. track companies and industries,
rency. Private banks hire thousands ly post graduates — MBAs and and decide where to invest. MF
So when you open an ac- of people for this division, and in CAs. Large NBFCs also lend to Treasury and Capital sales is also a large opportunity.
count, apply for a credit card, is- large public sector banks, it corporates. Markets In the next article of this se-
sue a demand draft etc, it’s retail runs into tens of thousands! This is the division where finan- ries, we’ll shall discuss:
banking at work. NBFCs also do a lot of retail Wealth Management cial products such as equities,
Each vertical in detail.
Two important points: lending. Simply put, if you are This is a personalised form of bonds, currencies, and other
What your role will be with-
First, for a bank, deposits are looking for a job, you will find banking for the wealthy called exotic products are traded. in each.
liabilities as they have to be re- the most opportunities in retail High Networth Individuals or These transactions can be on
Skills needed and your ca-
turned to the account holder. banking. HNIs. It revolves around ensur- behalf of customers. That is, if reer progression over time.