Image Problems Bite But MBAs Still Break Into Deutsche Bank
Less pay and more reputational challenges have driven some MBAs away from the banking sector. But investment banks are still drawing candidates in droves.
A stern expression formed on Andy Tromans’ face as he leaned forward on the black leather couch. Inside Deutsche Bank, Germany’s largest lender, a bevy of Aston Business School students had broken into finance careers.
Andy, an MBA graduate of 2011's cohort, had sat down to take questions on his progressing career path with the leading financial services firm.
He waved a hand in the air from inside Deutsche’s new Birmingham office. With one stroke of a pen, the bank’s northern move created 1,000 new jobs for the UK midlands.
“It’s the scale and the breadth of the challenge,” says Andy, explaining why he transitioned into the German giant. “We’re dealing with massive projects. It's extremely dynamic. It's extremely fast-paced. There is never a dull moment.”
His main interest has been in banking. Since leaving Aston three years ago, Andy has risen to assistant vice president rank. He now works in technology and operations, and portfolio management.
“We look after the go-to market strategy for the acquisition of IT infrastructure and services – globally,” he explains.
But there is far from a boom in the European banking sector. Recent high-profile executive departures have underscored the challenges facing the industry five years after the financial crisis.
Richard Meddings shocked the City when he stepped down as finance director of Standard Chartered in January. A few months prior, Sir Hector Saints quit Barclays less than a year after being hired after serving as head of the UK’s financial regulator.
A band of high-profile US financiers have also left banks to join private equity groups.
Potential fines have done little to assuage the reputational damage done to banks since the credit crunch. Business schools and MBA recruiters know that reputational challenges have dogged the sector.
According to research by the Financial Times, big banks in the US have paid out more than $100 billion in legal settlements since the crisis. Many of these fines concerned banks’ lending practices and apparent market manipulation. The global investigation into alleged manipulation of the Libor interest rate benchmark led to billions in fines for big-name banks, including Royal Bank of Scotland and UBS.
It is not surprising that the hammering the banking sector has taken from regulators, the media and politicians has damaged its attractiveness to business school students. Although the US seems to have a healthy appetite for the financial sector, MBAs in Europe are less easily seduced.
A recent survey by Deloitte, the consultancy, revealed that the popularity of working in banking had fallen five places to 35 out of 100 potential employers. Deloitte surveyed 18,000 business students at more than 1,000 universities.
PwC research suggests that average pay per head in some European and US investment banks fell from about 9 times the private sector average to nearly 6 times between 2006 and 2012.
According to data from QS, the business school research company, some investment banks have reduced their MBA salary offers to $90,000.
Andy’s confidence, however, remains undimmed: “There is definitely growth potential within the bank – certainly within Birmingham. The site has grown at a tremendous rate. There are many, many opportunities coming up.”
He is not the only one to share lustre for the banking sector. Nicola Nash graduated from Aston in 2000 and has risen through Deutsches' ranks.
“I’ve been here 18 months and I’ve seen so many interesting opportunities,” says Nicola, who is an assistant vice president. “I’m on my second role and I just want to keep learning what the business does, because it’s such a diverse place.”
She joined the bank after a career with FirstGroup plc. Before that, she worked at Clearwater Corporate Finance for about a year, a position she held after several years with consultancies KPMG and Deloitte.
Nicola works in the bank's regulatory accounting team, within financial control. “I look after all of the UK's data for our regulatory reporting,” she says. She thinks her role keeps her on her toes. “We’re a very diverse company. I get to – every day – speak to people from Germany [and] America. It is always interesting.”
Despite what business school reports may say, investment banks continue to attract vast numbers of applicants. Interest is particularly strong for their analyst graduate trainee schemes.
Goldman Sachs had 17,000 applications for its 350 investment banking internships last year. Goldman’s analyst cohort, the main route for undergraduate business students, had 43,000 candidates for 1,900 positions this year.
“I would definitely love to go back to the bank," says Sabina Hasnain, an Aston undergraduate who had a placement with Deutsche. She was rotated through three departments – risk and peer to peer lending, financial control and regulatory accounting.
“Because it’s so vast, you can always find somewhere that you will fit [into]. And the company definitely has helped me find my skills and where I will be best suited,” says Sabina, who studied economics and management at the UK-based business school.
One area where MBAs and undergraduates may rotate into is technology. It is creating more job opportunities. Lenders have responded to growing demand for customers to bank via smart-phones and the Internet. There has been an increase in digital banking apps.
Barclays recently snapped up Shadman Zafar from Verizon, the US telecoms giant, to be the banks chief digital officer. This year the firm also hired tech industry veteran Usama Fayyard as its chief data officer.
Sabina says her colleagues were supportive. “I feel like they’re my mentors and my friends, and that’s definitely been the highlight of the experience. They want you to do well.”
It is equally competitive for MBA graduates. Andy says his MBA is what helped him break into the bank in August 2012. “It gave me a tremendous grounding in the business world.”
He adds: “But then also the softer skills... [and] all the different students, the backgrounds and the different cultures gave me a huge grounding to perform well within a global investment bank.”
Nicola, who has worked at Deutsche for nearly two years, agrees. “I felt I had a good background everywhere – not just accounting,” she says. Aston also gave her a head-start in her ACCA accounting exams. “I found I was so much more confident. I actually knew the first few modules – instantly,” she adds.
But there is much more that needs to be done to prosper in an investment bank. Graduates are still set to be in hot demand in the years to come. Yet competition is still intense, despite a lesser demand in Europe.
“My advice is to grasp every opportunity that you get given,” says Andy, his face unchanging as he delivers a final verdict.
“Demonstrate that you’re not just a person – that you’ve got a life. [Demonstrate] that you’re not just a person that can do that job, but you’re going to join the team. We’re a team at the end of the day – not just a business.”