Commercial Banking

The diversity of occupations in commercial banking makes it difficult to make projections about employment opportunities that ring true across the whole industry. Commercial banking is an umbrella for a broad range of occupations, everything from front-line customer service in branch offices to loan production, regulatory compliance, and back-office support.

Employment opportunities across the financial and business sectors are expected to grow about as fast as the average for all careers through 2031, according to the U.S. Department of Labor (DOL). As more Baby Boomers enter their retirement years, many will turn to brokers or financial advisors for help managing their retirement nest eggs, potentially stirring demand for personal bankers and securities brokers.

Job opportunities for loan officers are expected to grow by 4 percent (as fast as the average for all careers) from 2021 to 2031, according to the DOL. It reports that “increased demand for loan officers is expected as both businesses and individuals seek credit to finance commercial investments and personal spending. Loan officers will be needed to evaluate the creditworthiness of applicants and determine the likelihood that loans will be paid back in full and on time.” However, the DOL also predicts that the “decline of bank branches and the increased use of productivity-enhancing technology in loan processing are expected to slow employment growth for loan officers. Some loan applications can be completed online and underwritten automatically, allowing loan officers to process more applications in a much shorter period of time.”

Employment for financial managers (treasurers, finance officers, credit managers, cash managers, risk managers, etc.) is expected to grow by 17 percent (much faster than the average for all careers) through 2031, according to the DOL. The DOL says that “services provided by financial managers, such as planning, directing, and coordinating investments, are likely to stay in demand as the economy grows. In addition, several specialties within financial management, particularly cash management and risk management, are expected to be in high demand over the decade. An understanding of international finance and complex financial documents is important.”

Job opportunities for financial analysts (buy-side analysts, sell-side analysts, portfolio managers, fund managers, ratings analysts, and risk analysts) are expected to grow by 9 percent from 2021 to 2031, according to the DOL, or faster than the average for all careers. Financial deregulation expanding the scope of services banks may offer their customers will spur demand for financial analysts and personal financial advisors. “Wealth management will move alongside deposit-taking as a baseline service for retail banking,” according to Retail Banking 2020: Evolution or Revolution?, a report from PricewaterhouseCoopers. However, banks will continue to face considerable competition in financial services from non-bank establishments, such as insurance companies, tech companies (Facebook, Apple, etc.), and independent financial advisor firms. Demand is also increasing because the collection of Big Data and technological improvements enables financial analysts to conduct high-quality analyses that bring value and increased profits to their employers. In addition, the DOL says that “emerging markets throughout the world are providing new investment opportunities, requiring expertise in geographic regions where those markets are located.”

Employment for information security analysts in the finance and insurance sectors is expected to grow by 29.7 percent (much faster than the average) from 2021 to 2031, according to the DOL. Demand will be strong as the banking industry strengthen its IT security infrastructure in response to cyberattacks.

The increasing use of distributed ledger and blockchain technology, data analytics, cloud computing, and artificial intelligence (AI) will create strong demand for tech workers who are familiar with these technologies and the banking industry. There is currently a shortage of technology workers with this expertise. The information technology association CompTIA recently listed machine learning, cloud computing, data analysis, data science, data visualization, and Big Data among the top 20 in-demand technology skills. “The largest banks are automating work anywhere they can, especially routine work like cutting and pasting data from one app to another," according to American Banker. “Use of AI and robotics will only grow provided banking regulators become more open-minded about them. This will dramatically change banking jobs and the skills required to do them. People will be needed to design and train bots and AI engines, to test and oversee them, and to manage the employees who do those jobs.”

Job opportunities should be favorable for office and administrative support workers because they make up a large proportion of bank employees and because many individuals leave these positions for other jobs that offer higher pay or greater responsibilities. The need for skilled workers will create good job opportunities for individuals with financial services backgrounds.

Each year, the recruiting firm Robert Half International publishes a salary and employment report. In its 2023 Salary Guide, which covers financial and accounting workers, it says that professionals experienced in risk analysis, compliance, and auditing are in the highest demand. “Those with 3-7 years of experience are typically the most highly sought specialists among financial services institutions, and their starting salaries continue to climb.” It also reports that the hottest jobs in this sector are accounts payable/receivable clerks, auditors, bookkeepers, compliance analysts, controllers, financial analysts, payroll managers, senior accountants, staff accountants, and tax accountants.

Employment for bank tellers is expected to decline by 12 percent from 2021 to 2031, according to the DOL. Seventy-two percent of Americans surveyed in 2022 said they most often accessed their bank accounts via online and mobile channels, according to an ABA/Morning Consult survey. Fourteen percent reported using their bank branch most often to access their accounts. “As mobile banking capabilities have evolved exponentially over the past decade thanks to bank investments in technology, we’ve seen many consumers become more comfortable embracing their phones and tablets to make everyday transactions,” said Brooke Ybarra, ABA senior vice president of innovation strategy. In response to changing banking preferences, the number of bank branches has declined in recent years—from 83,663 in 2013 to 78,774 in 2017 to 72,534 in 2021, according to the FDIC. Nearly 2,395 bank branches closed from 2020 to 2021.

Overall, banks in the U.S. report trouble recruiting and retaining millennials. Fifty percent of banks surveyed for the Crowe 2022 Banking and Compensation Survey reported that retaining young talent was “somewhat challenging,” while 12 percent said it was “very challenging.” Issues that deterred millennials from entering or staying in the industry include low compensation, the perceived lack of opportunity for promotion, and a desire for more job flexibility. “The banking industry has struggled for a long time to attract younger employees,” according to Crowe. “Historically, retail banker wages and job requirements have been low, technical expectations are limited, and preference has been to hire experienced individuals. There has been a shift in mindset to now seek younger generations to fill these positions to increase technical proficiency and bring more diversity to the position.”

While the overall outlook for commercial banks remained consistent with pre-pandemic projections, the 2020 coronavirus outbreak affected many areas where banks participate, such as in new business and home loans. For individual customers, online banking and mobile apps helped them navigate social restrictions and lockdowns. An overall economic slowdown due to business closures, supply chain disruptions, and unemployment also created challenges for banks. However, some of their core businesses, such as credit cards and personal banking remained strong. Many banks took a supportive role in the crisis by working with business customers to help them weather the bad times. Government-mandated hiatuses for foreclosure actions and other steps might take against debtors in default, or "loan stress," forced banks to work around these situations. Many sought to cut costs, temporarily close branches, and reopened only with social distancing guidelines in place.

The commercial banking industry in the U.S. is valued at $1 trillion, with 81,150 businesses employing more than 2.2 million people, according to the research group IBISWorld. Moving forward, government support will continue to benefit commercial banks, with oversight by government agencies continuing as well. Large, well-established commercial banks will grow faster than smaller savings institutions post-pandemic. Innovation and adoption of new technologies are expected to continue in the commercial banking industry in the near future. A Deloitte report describes its take on the post-pandemic banking industry as follows: "In addition to the financial fallout, COVID-19 is reshaping the global banking industry on a number of dimensions, ushering in a new competitive landscape, stifling growth in some traditional product areas, prompting a new wave of innovation, recasting the role of branches, and of course, accelerating digitization in almost every sphere of banking and capital markets." Another aspect of banking that is also changing is that more people want banks to "help address income inequality, racial and gender inequity, and climate change." Sustainable finance and banking with a purpose will become increasingly important for societies.