Operational investment bankers need to possess excellent numerical and analytical skills and a hard-working attitude to deal with the high level of responsibility assigned to them
The operations team is responsible for the processing and settlement of all the financial transactions made at an investment bank or investment management firm.
As part of the operations division, also known as the 'back office', you would provide support to the client-facing departments, such as trading, corporate finance, and corporate banking - sometimes known as the 'front office'.
The front office generates business for the bank, and operations ensure that the business is administered in an efficient, controlled, risk-free and timely manner. In this role you will ensure that products, services and money change hands how they are supposed to.
As an operations professional, you will be involved in developing new systems in order to maximize efficiency and profitability for the bank. You will also ensure each transaction is cleared, settled and reconciled according to regulatory and control requirements.
Operations covers a range of activities. Following the buying and selling of financial products and services by the bank, operations staff ensure that each transaction is:
- cleared - funds and financial products moved between buyer and seller;
- settled - ownership confirmed efficiently and accurately;
- reconciled - correctly documented and reported.
The structure of departments varies from bank to bank, but your tasks would typically involve:
- running processes to clear and settle transactions;
- reconciling systems by checking that the data flows from the revenue-generating front office to the operations systems (operations control);
- monitoring the activity and reports of daily transactions;
- investigating breaks in the cash account within an investment bank;
- liaising with clients regarding transaction settlements, as and when required;
- troubleshooting system problems.
As a manager of an operations team you will:
- act as an interface with other divisions of the bank, for example, liaising with traders and ensuring all issues are resolved in a timely and efficient manner;
- recruit, train and coach team members;
- organise team meetings, manage team members and have responsibility for individual and team appraisals;
- ensure client protection rules are adhered to;
- make sure that processes are constantly improving, and participate in step-change improvement projects;
- manage projects such as analysing a system, identifying and specifying developments and improvements and coordinating the testing and implementation of new systems.
- Typical starting salaries range from £25,000 to £50,000 plus benefits and a bonus.
- Salary progression varies according to the role with the best paid operations staff earning £85,000 to £120,000, plus benefits and bonus.
Salaries in operations do not reach the levels of the revenue-generating front office roles, such as trading, but still remain high compared to similar roles in other sectors.
Remuneration packages in investment banks often include benefits such as health insurance, life assurance and subsidised gym membership, plus discretionary annual bonuses (based on individual and company performance).
Income figures are intended as a guide only.
Investment banks have a reputation for long working hours. While this is true for divisions such as corporate finance, working hours in operations tend to be more regular, typically 8.00am to 5.30pm or 6.30pm, Monday to Friday.
However, when working on projects or towards the end of the month, longer hours and some weekend work may be necessary to meet deadlines.
Flexible or part-time working is becoming more common, especially in the regional hub offices sited away from the City.
What to expect
- The job is mostly office based.
- There are no opportunities for self-employment, though consultants may be used for major improvement projects. Many banks have career-break schemes, but they are often restricted to long serving members of staff and are only approved by senior management on a case-by-case basis.
- Investment banking has traditionally been male dominated, but there tends to be a higher proportion of women in operations than in other areas. Many banks participate in schemes that encourage applications from women and other underrepresented groups, such as Women in Banking and Finance.
- Most jobs are available in financial centres, such as London, although there has been a tendency to move operation functions to lower-cost areas in the UK like Bournemouth and Glasgow, and offshore to countries such as India. Job availability tends to fluctuate wildly due to economic conditions.
- Many banks have a 'business casual' dress code, though some maintain the requirement for smart business dress. The working environment may be demanding and stressful, with tight deadlines, but the role offers variety and challenge. It is sometimes necessary to adjust home and social life to meet the priorities of the job. The culture is often described as 'work hard, play hard' and socialising with colleagues is common.
- There may be travel involved to some of the bank's other sites overseas, but travel opportunities are limited in operations, and will depend on the department or product.
To enter a graduate-level job, you will need at least a 2:1 degree as well as strong academic and extracurricular achievements.
The entry into operations tends to be either as an administrator, or as a graduate trainee, normally known as analysts.
Typically the banks will accept applications from graduates of any discipline, but the following subjects may be helpful:
- business studies;
Applicants from non-related disciplines will not be at a disadvantage, but they will need to show an understanding of, and keen interest in, the business.
Graduate schemes are very competitive, and some employers require a first class degree.
Applications from people with postgraduate degrees are welcomed, though they are not likely to receive any preferential treatment.
Those with a Masters of Business Adaministration (MBA) and certain other postgraduate degrees plus two to five years of relevant work experience, may be able to apply for a higher-level training programme as associates, but it's worth noting that these programmes are usually aligned to front office roles. Search for MBA courses.
Each bank will be looking for slightly different characteristics, but generally you will need to show evidence of the following:
- the potential to achieve a leadership position;
- the ability to work well in a team;
- good communication skills, especially the ability to persuade and influence others;
- a strong customer service ethos;
- excellent numeracy and analytical skills;
- a creative and innovative approach to problem solving;
- attention to detail, plus excellent organisational and time management skills.
To gain an interview for a graduate programme, you will need a full CV, perhaps with:
- an internship at an investment bank;
- positions of responsibility in societies or sport teams;
- part-time work alongside your degree;
- evidence of sustained interest in finance, such as managing a shadow portfolio of investments.
Operations professionals are recruited by investment banks.
Graduate scheme deadlines vary so check on the companies' websites. It is advisable to apply as soon as possible as they often interview before the closing date is reached, and recruit on an on-going basis.
Investment banks come in many shapes and sizes, from smaller, niche players, such as Rothschild and Lazard Ltd, to large, global organisations, such as:
- Credit Suisse;
- Goldman Sachs;
The banking sector is a volatile one and investment banks are affected by economic cycles, which have a knock-on effect on graduate recruitment.
London and New York have dominated financial employment in the last few decades, but the increased growth in emerging markets, such as Russia and China, have lead to other financial centres growing around the world.
Look for job vacancies at:
- Financial Times
- Guardian Jobs
- Inside Careers: Banking, Securities & Investments
- The Times Jobs
You can find vacancies in operations through specialist financial or banking recruitment agencies such as City Jobs, although many of these will require relevant experience.
You will be trained on the systems and products that your department supports. As these change regularly, all employees will undergo training at least yearly.
Sponsorship towards professional qualifications is often offered to those identified with the potential to progress up the ranks.
If you are on a graduate development programme, you will undergo a structured set of training courses and coaching sessions to develop the knowledge, skills and experience to become a manager, typically over a two-year period.
Trainees will also usually start working towards a professional qualification relevant to their area. The Chartered Institute for Securities & Investment (CISI) provides a range of qualifications for the financial services industry, some of which can lead to chartered status. Qualifications include:
- investment operations certificate (IOC);
- certificate in IT for investment operations;
- advanced certificates in global securities operations and operational risk;
- diploma in investment operations.
There are various other professional bodies that offer training and support, such as the:
Your career may progress in a linear way leading to promotions that encompass more responsibility, such as:
Continued success can lead to promotion into senior management roles, although competition for these roles is high, and progression is likely to be slow.
It is often possible to move, either temporarily or permanently, into project management or into a specialist role, such as IT or HR. Moving into these areas can provide breadth and balance to a career, but may affect career progression in the short term.
Movement from operations into client-facing roles has become more common, though still fairly rare as the skills sets required for these roles are very different.