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Is an MBA Valuable in the Finance, Banking or Lending Industries?

Posted March 28, 2019 by EasyFinance.com to Banking 0 0

Working in the banking, lending or finance industries, everyone tends to be educated and well informed. Standing out from the crowd is difficult to do at the best of times, but in these particular sectors of the jobs market, you’ve got to be better - sometimes, much better than other job seekers and people who work in the company already. Competition is fierce and there are sharks in the water.

Here are some thoughts on whether studying and completing a Master’s in Business Administration is worth doing when working in the lucrative banking, lending or finance industries.

The Challenges of Getting Ahead

Investment banking or Wall Street is hard to get into, and the pace is relentless if you do. Whether working at an investment bank starting out as an intern, or being recruited into a more senior role in the company, you’re always being compared to your peers.

Job performance is sometimes comparable on an apples to apples basis, but other times when assignments and job roles are so different to each other, direct comparisons are more difficult. In which case, internal (or external recruiters) handling promotions and job applications refer back to the resume to compare candidates.

When a line manager is not directly involved in the recruiting, that pits excellent candidates who perform very well in their current position at a disadvantage over outside applicants that look better on paper.

The fact is that human resources only have a distant understanding of how you perform in your current position at the company and that’s anecdotal. Often, that means the best performers don’t necessarily get enough credit. When your resume isn’t jam packed with qualifications, it’s exceptionally tough to stand out from a packed list of applicants.

Investment Banking

Investment banking looks for highly educated applicants and won’t usually accept ones who lack the requisite qualifications. Talking your way into a job isn’t going to happen in their world.

With investment banking, they’re dealing with the top 1%. The wealthy want a family office to run their investment portfolio, investment advice suitable for millionaires or billionaires concerned about the tax benefits of an investment, or premiere private banking facilities. They probably read the annual World Wealth Report from Capgemini and expect the advice to match this level of quality.

To get into this world, you’ll need the MBA before applying unless you have an excellent bachelor’s and a pedigree in the financial world already, otherwise you’re starting at the bottom. If you are already working in finance, then you could study for an Online MBA from Kettering University Online.

This course is taken over the internet, so you will not be losing time trying to get to class. You can take it at your own pace because you build up credits much like with other degree courses. There are electives to select subjects that relate more to your industry, such as global leadership. In this way, you can mold the Master’s in Business Administration according to your career priorities.

Specialized Investment Funds

Some specialized investment funds look at distressed investing and financing deals. This is at the riskier end of value investing where investment funds are seeking to buy a company worth $1 per share for 25 to 50c. Finding a bargain is what they’re looking for while avoiding investing or lending into a loser that’s months away from going bankrupt.

These types of companies need even better analysts to deep dive into the financials and debt instruments of a business to find what other analysts miss. An average analyst or forensic accountant might not have what it takes.

Personal & Business Banking

The personal and business banking industries focus around regular consumers, though it also has business customers too. In this sector, it includes mainstream financial institutions that provide consumer checking accounts, savings accounts, certificate of deposits over different term durations, and home mortgages. On the business side, retail banks also offer business accounts and some lending to local companies.

It’s useful to have an MBA when working for a retail bank because of the depth of roles available there. Certainly, a senior lending officer that verifies loan applications and gives final authorization is a role where a bachelor’s or master’s degree is useful to have on the resume.

When having designs on being a branch or regional manager, or moving up to the head office for further advancement, then it pays to improve on-the-job performance as well as academic qualifications. Certainly, an MBA would improve career prospects considerably and make you more eligible to work for the larger retail banks at a senior level.

Business Lending

There are private business lending organizations that focus on funding projects. The project could be everything from a mezzanine loan to bridging a gap in business funding, lending for new building projects, a loan to invest in a company’s future growth or to fund a buyout.

Specialized business lenders are seen as a valuable source of funding for complicated deals. There are specialists within this arena that understand complex deal points and how certain industries finance buildings, equipment and more.

A retail bank and a lending officer at a local banking branch is going to be ill-equipped to understand why a business loan is required, nor what it’s needed for. Doubtless he or she would need to explain it to their branch manager and be unable to do so. This presents an unsurmountable hurdle for a business loan application that’s out of the norm.

Someone with a master’s, especially in a business or financial field, is going to understand contractual deal points and be able to grasp the inner workings of a particular industry much more clearly. This is a valuable skillset for a specialized business lender that sees many types of deal proposals cross their desk every week and needs them digested before making the right decision about them.

In many areas of retail and private banking, finance and specialized business lenders, having an MBA under your arm grants entry into a private world. It can be extremely lucrative if you become skilled in a company where you can progress up the ranks, and it delivers an excellent ROI for the investment in your future education.

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