Corporate Banking 60 Islamic Finance

CORPORATE BANKING

A corporate banker handles banking responsibilities for company accounts and offers the bank’s services to help the business grow.

OVERVIEW

Corporate banking is a subset of business banking and involves a larger range of banking services that are offered only to corporate entities. Clients that make use of corporate banking services can range from small-and-medium enterprises (SMEs) to large corporations, and even government agencies at times.

Corporations use banks for many purposes, including managing their finances and making transactions. However, corporate banking goes beyond just that. Some of the services that corporate banking divisions offer to clients include:

Credit

Treasury services

Fixed asset requirement financing

Trade financing

Advisory services (e.g. capital markets, fund management, debt structuring, etc.)

Much of corporate banking involves working with clients to develop customised banking solutions tailored specifically to their needs. This is especially important for big multinational companies or state agencies, which often have to work with very complicated financial processes internally.

CAREER PATHWAYS

Corporate banking is far more selective than regular commercial banking, so most graduates usually enter the field as analysts through dedicated graduate schemes. As an analyst, you’ll start off by performing a supporting role for client-facing staff. By shadowing relationship managers to client meetings and providing research and analysis on possible banking solutions, this is how you will familiarise yourself with corporate banking services and pick up clientfacing skills.

After about a year or two as an analyst, you’ll typically move up to associate level. At this stage, you’ll be expected to start managing clients on your own and build relationships with them. You will get deeper into the details of what a client’s business does by analysing their financial data, making recommendations to clients, and then helping to implement them.

Corporate bankers usually work with a variety of banking products and services as opposed to focusing on just one. As such, professionals often get the chance to flex their intellectual and creative muscles as they look to successfully match and tailor the right products to different clients.

However, this also entails handling demanding and difficult cases, and the working environment is fastpaced and highly stressful. Expect to work long and unsocial hours, and to be on call by clients at all times of the day. Nevertheless, the prospect of lucrative upward mobility and the chance to develop your business acumen by analysing companies and their processes in depth make this pathway a popular choice.

REQUIRED SKILLS

Although finance-related degrees aren’t necessary for this role, recruiters usually keep an eye out for applicants with skills in numeracy, negotiation, interpersonal communication, and the ability to analyse complex problems.

At the core of corporate banking is client relationship management. So you will need to demonstrate high emotional intelligence and the ability to manage unexpected situations and keep your cool even when clients are demanding.

Internships are one of the best ways to build a case for getting into this industry. Do your best to acquire a wide range of finance and customer management skills through relevant placements while you are still in university.

There is a lot of competition for roles in corporate banking, and banks typically recruit from a few targeted universities for those roles. Hence, your college, degree, and grades all matter. If you want to stand out among other applicants, take up different courses or additional certifications related to banking or corporate financing if you can!

ISLAMIC FINANCE

Islamic finance is about helping clients make money in adherence to the principles of Islamic law or Shariah law.

OVERVIEW

Islamic finance is a system of banking that complies with Islamic law, also known as Shariah law. Broadly speaking, it focuses on avoidance of “Riba” (usury), the prohibition of speculation and gambling, the encouragement of saving and investment for future generations, and the promotion of fair trade.

There are two major aspects of Islamic finance that differentiate it from conventional finance. First, traditional financial institutions charge interest rates - this is prohibited according to the Quran. Second, the profits of a business venture cannot be distributed among shareholders until after the company is profitable, which is different compared with conventional investments where profits are distributed before the venture is completed.

Through the use of various Islamic finance concepts such as Ijarah (leasing), Mudharabah (profit sharing), and Musyarakah (partnership), financial institutions have a great deal of flexibility, creativity and choice in the creation of Islamic finance products.

According to Bank Negara Malaysia, Malaysia’s Islamic banking assets reached US$254 billion as at December 2019, with total funds placed with Islamic banking products now representing 38 percent of total local banking sector deposits.

CAREER PATHWAYS

As with many other investment roles, graduates typically start out as analysts in this field, before eventually taking on more clientfacing responsibilities. If you are entering through a graduate programme, you can expect a general rotation across different departments - with a particular emphasis on Shariah banking principles.

Given the specialised nature of this field, you will have to attain Chartered Islamic Finance Professional certifications at some point if you intend to keep advancing.

Once you have acquired Chartered Islamic Finance Professional status, you can choose to specialise in areas of banking such as wealth management, Takaful, Islamic structured products, or regulation and compliance.

As Malaysia is a global Islamic finance hub, you can expect to work with international clients as well. Potential employers include the Islamic finance divisions of local banks, international banks that offer Shariah-compliant services or Islamic firms.

REQUIRED SKILLS

Though finance degrees or Islamic finance diplomas are advantageous, they are not a requirement. Demonstrating strong numeracy, communication, and client-facing skills are more important, as is being able to demonstrate a broad knowledge of Islamic finance practices.

Foreign language proficiency is very useful, particularly languages from other countries with Islamic majority populations. Some examples include Arabic, Bahasa Indonesia and Turkish.

As Islamic finance has a responsibility to invest in products that are beneficial to society, many investors identify Islamic financial products as similar to SRIs (socially responsible investments).As such , a great deal of integrity and responsibility is necessary when working with strict rules and a very specific code of conduct.

However, the nature of Islamic finance is made complex due to the role of Shariah advisory boards. These boards, along with professional bodies and think tanks, pass judgements on existing products and advise on the development of new products.

Therefore, staying constantly upto-date on the latest developments in Shariah-compliant financial practices will be vital for an Islamic finance professional. Not just in Malaysia, but in other markets around the world as well.