Commercial banking, by nature, is a people business. It involves provision of various banking and financial services for business and corporate customers and day-to-day work with a wide range of individuals.
Dealing with customers are the relationship managers for enterprise banking whose job is to serve as marketers as well as sales people to promote and sell the bank's products, explains Teresa Lin, managing director and head of enterprise banking at DBS Bank in Hong Kong. They also act as consultants, providing accounting and financial advice especially to small enterprises to help them carry out business planning and cash flow analysis.
The provision of recurring services involves account servicing and maintaining customer relationships in the long run. As a result, the profession is all about relationship management, Mrs Lin says, adding, "The key is to provide value-added services."
Different banks may focus on different market segments that can vary from small to mid-sized enterprises to large, multinational corporations, with financial needs that are very different from one another. The top-end market of large corporations is a niche market and requires highly customised services. However, it is not necessarily easier to handle small businesses. The opposite may actually be true, according to Mrs Lin. "It may require even higher skills and expertise to review the financial data of small enterprises, whose books and ledgers are not as clear and systematic as the large corporations'."
The commercial banking business can be categorised according to the products on offer. They include trade financing, operation loans, overdraft, credits for capital expansion such as equipment financing and account receivable financing, and other financial arrangements related to investment banking like merger and acquisition and initial public offering. With the wide range of products on offer, a commercial banker needs to be well-rounded with a deep and sophisticated knowledge of accounting and finance.
Key to success
To become a successful commercial banker, one needs to be innovative and creative. "It's similar to the quality of a writer or designer in looking for perfection. We need to be able to cast a new light on some ordinary things, take a different perspective when looking into a matter and help [accomplish] something that seems to be impossible. Otherwise, you are no different from the others and cannot stand out," Mrs Lin says.
Honesty and integrity are equally important, she says. "It's particularly essential in the banking and finance industry in which you are exposed to so many temptations every day."
Commercial banking requires good communication and interpersonal skills, because it is all about relationship management. "Basically the work is about bridging the gaps between customers and the banks which operate with their own standards and need to be cautious and selective in giving credit," Mrs Lin says. "It is the role of a commercial banker to make use of the structure to serve both parties, no matter how big the gap is."
In addition, experience is important because knowledge and skills help you grow. "As far as relationship management is concerned, it definitely takes time to build the network," adds Mrs Lin.
More challenging, more rewarding
The work of commercial bankers is becoming more challenging, according to Mrs Lin. She says it was much easier to make money during the boom times before 1997, when the margins were high and bankers in general did not have to work as hard but still enjoyed a comfortable and stable lifestyle. However, since the business environment has become more competitive, the requirements for bankers are tougher than ever. They have to be adaptive, dynamic, versatile and hardworking as remuneration is directly linked to performance.
Changes at the organisational level are also required. For example, it involves different packaging of existing products. Traditionally customised products are standardised, enabling the bank to offer these products to a wider range of customers, while standard products are customised to meet individual needs. Keeping up with changes also requires a new style of "mobile management", says Mrs Lin. This means replacing the traditional, static organisation with a flexible and dynamic structure that is adaptive to changes, allowing the bank to add a team dedicated to developing new products.
The more challenging the work is, the more satisfying it becomes. Mrs Lin thinks the excitement of sealing a deal could be as great as giving birth. She points out that the satisfaction comes not only from one's personal success to close a specific deal, but to create value and grow with customers in the long run.
With industry growth depending on the performance of the overall economy, Mrs Lin does not foresee any massive industry-wide hiring. Nevertheless, individual banks, including DBS Bank, may continue to expand and acquire more talent for business development.
Mrs Lin believes the industry is rapidly moving towards globalisation, in line with the rise of "distributed enterprises". Companies today tend to adopt a regional or even a global view in running their businesses worldwide and, as a result, banks today are facing keener global competition.