The Diversity of Companies in Banking

Banking is a broad term given to a diverse array of different firms which operate in the finance sector. And, banking itself isn't one singular profession - there are multiple different faces of banking. If you want more information on what different roles within a bank entail, or what different types of financial firm do, then try one of the introductory books from the reading list on the right of the page.

• Investment Banks - these themselves are diverse and have a number of different roles within them: 

Front Office includes:
Corporate finance
Capital markets
Sales and trading
Private equity
Asset and private wealth management
Research
Structuring

Middle Office includes:
Risk management
Compliance
Finance

Back Office includes:
Finance
Operations
IT/technology

• Investment Management – also known as fund management and asset management – is all about managing money, including investment in equities, fixed income, property and hedge funds, on behalf of clients. Asset managers are the people responsible for achieving this, and are usually called fund managers in the UK, while in the US they’re known as portfolio managers. Asset management is often referred to as the ‘buy side’, because it buys investment products with the aim of making profit for investors. Research analysts provide ideas and information to asset managers, who will then make decisions on the portfolios that they manage.

• Hedge Funds – The name ‘hedge fund’ comes from the idea that money managers can hedge their bets to ensure they make money, whether the market goes up or down. What distinguishes a hedge fund from a traditional fund is its willingness to push the boundaries of normal investment techniques to achieve unusually high returns. Hedge funds borrow money to invest, are highly leveraged and less regulated, which leads to these higher returns. Hedge fund assets are growing quickly, and London plays host to 12 of the largest hedge funds in the world. Most hedge fund managers are highly successful former traders or fund managers, who are looking for something different. Graduates with two years’ experience in investment banking, who are strong on financial analysis and spreadsheets, could make the leap into a trader position earning £80,000 plus unlimited bonuses. Private Equity and Venture Funds exist to help raise money for companies by offering cash in return for an ownership stake. In an ideal situation they invest in an under-performing company, turn it around and sell their stake at a profit some years later. However, they occasionally engage in the unpopular practice of asset stripping. The industry hires very few graduate trainees. 

• Retail Banking is dominated by Barclays, LloydsTSB, HSBC, Santander and the Royal Bank of Scotland (RBS, who own NatWest). In order to stabilise the financial system by recapitalising the banks, the UK Government is taking part-ownership and introducing more control over the banking system. These banks are very large businesses, not just recruiting into High Street banking. Don’t overlook their specialist recruitment areas, such as Corporate Banking, Operations Management, International Management, Group Technology, Internal Audit, HR, Finance and Private Banking. Personal financial services vacancies can be found in banks and financial institutions but also within the manufacturing sector. The sector is characterised by rapid change and competition has become much fiercer. The most common entry-point positions in the sector are: bank manager, retail banker, trainee financial planner or credit analyst.

• Independent Financial Advisers (IFAs), company representatives or ‘tied agents’ also provide financial advice. They can advise on investment products, such as pensions, life assurance, savings and investing in stocks and shares. Tied advisers can only sell products from one financial company; the one to which they are ‘tied’. Company representatives, or direct sales people, are employed directly.