McKinsey & Company, Goldman Sachs, ICICI Bank and Kearney analyze the career prospects of Finance and Consulting domains

The most sort after specialization in a B-School, Consulting, is also one that’s easily misunderstood. The world of glamour that tends to coax young MBA graduates to opt for this one domain, might have a different story altogether. To clear the cloud of suspicion that revolves around the two prominent disciplines of Finance and Consulting, Dare2Compete IGNITE – The Spark to Your Dreams, Season 2 released another episode of its insightful sessions with the leaders of the industry. Hop in to know the opinions and perspectives of eminent leaders from in and around the globe and better understand the career prospects of the Finance and Consulting domains.

Industry stalwarts on the panel lifted the curtains of the session and graced the occasion with their presence. We had Leah Zacharias, Chief of Staff team, Goldman Sachs (alumnus IIM Kozhikode); Souvik Sen, Chief Manager, Global Market Group at ICICI Bank (alumnus IIM Bangalore); Harsh Gandhi, Management Consultant, McKinsey & Company (alumnus IIM Lucknow) and Kartik Pal, Senior Business Analyst, Kearney (alumnus IIM Ahmedabad) to discuss the career trends and prospects of the Finance and Consulting domains.

• While we take you on a ride to analyze the career prospects of the Finance and Consulting domains, we will shed some light on the following crucial insights: 
• Difference between the worlds of Finance and Banking
• What is Strategic Consulting?
• How the universe of Consulting has changed because of Coronavirus
• How have banks adapted to Coronavirus?
• Career prospects of Finance and Consulting domains in these firms and the requisite skill-sets
• How a student should choose what profile is best for him/her

Understanding the worlds of Finance and Banking

The terms Finance and Banking though are correlated and exist in a common sphere, in reality, hold quite different definitions. Here’s a better picture of what these two terms are all about.

Finance: Finance as a term is a very vast, encompassing several domains. Covering the bits that we have come across along with the ones we aren’t familiar with, Leah, Goldman Sachs, broke the term down to explain the various components of Finance. 

• Bank accounts, General banking, Insurance, Trading and Stock markets, and Mutual funds.
• Investment Banking, Investment/ Asset Management, Securities and Trading for Institutional clients, Transaction banking for institutional clients and Investment Research.

So, there is a large array of products on the institutional side. Let’s understand them better with a fair introduction of each of the above-mentioned terms.

Investment Banking - Investment Banks primarily do two things. The first is to advise clients on M&A (mergers and acquisitions) transactions. And the second is to work on their financing. So basically, the investment bank is the client’s financial advisor who analyzes targets for them as well as the industry and tells them whether or not it is a good time to make a particular acquisition for their company. After a few negotiations, the deal is closed and the client acquires the company.

Another part is when suppose a client needs to quickly tap into some market without diluting its shares because of a cash crunch. That is when Debt Market comes into the picture, which is one of the finance aspects of banking. This is where an Investment Bank again advises you on debt raising.

Investment Management/ Asset Management - In cases where a particular client is extremely wealthy and has no clue about what he should do with his money, financial advisors come into the frame. And that’s where something like Private Wealth Management business at Goldman Sachs (which looks at advising high net worth individuals on where to invest their money) takes the leash. Asset Management or Investment Management could be for any type of client - government, pension fund, a university with a lot of money, etc.

Trading - At a retail level, we all may or may not trade in the stock market. So, for institutions and companies that do want to invest, there are firms that help clients devise a trading strategy or price products.

Retail Banking - Called Markets by Goldman Sachs, it was started in 2016 and is a relatively new domain for the organization. And this is the everyday banking for retail customers. In recent times, a lot of focus has been on the digital transformation of this domain.

Merchant Banking - More popularly known as Private Equity, Venture Capital, Angel Investing, this is where firms are willing to invest in various stages of start-ups. So, this is another stream of finance that is institutional. 

Equity Research - Provided by a number of banks for institutional clients, this primarily refers to looking at sectors and specific companies to provide an outlook on them. A lot of analysis is required along with core technical skills and a flair for writing.

Corporate Treasury - Say, for instance, you run a bank and have to give everybody money to run their own businesses. So, if there are 10 different business, you will be required to maintain the liquidity of these businesses, meet capital requirements along with being mindful of the interest in the company.

Risk Management - These are the broad aspects that one can look at within finance.

Banking: Explained in detail by Souvik, ICICI Bank, he begins by talking about the foundation of ICICI Limited which was laid in 1955, initially a joint initiative between the government and the World Bank. At that point, immediately after independence, the financial system of the country was in a nascent stage and so was the corporate ecosystem. Back then, ICICI Limited wasn’t a bank and worked on project finance as well as did its bit in nation-building. Subsequently, four decades later, the ICICI bank was formed. 

For a very long period of time, the banking segment has focused on advances, loans. It is only of late, that there has been a significant change in that direction. Where asset still plays an important part of banking, other fields have emerged - investment needs of corporates, trade services, both domestic as well as cross border transactions, forest risk management. Other ecosystem-driven banking aspects include - salary accounts of corporates, backward and forward integration to the dealer financing and vendor financing of the corporates, etc.

In the retail segment, the time to market has reduced substantially now. Data Analysis and AI-based analysis has made it easier to figure out the spending habits of an individual to make things like insta loan, insta credit cards, available to them. All it takes is 30 secs to apply for a credit card without the need for documentation which then gets delivered to your place in a week’s time. 

The glamour of Strategic Consulting

Consulting, as dictated by Kartik, in the most literal sense is to understand the problem and advice and that is what is need to be done in the shoes of a Consultant. You will have a variety of clients with a variety of needs and you’ll be required to give the clients a best-fit solution given his constraints and requirements. The range of a Consultant’s work can go from working for an SME on their procurement or manufacturing needs to advising the government on how to create or how to transition to electric vehicles in the country.

At the company level, there are two distant kinds of things. One is their scope of industries which can range from automotive, financial, banking, consumer industries, etc. And the other is in terms of functions - top-line growth, retail, pricing, digital analytics, etc.  

When asked about how different the implementation part of Consulting is from the advising part of it, Harsh, McKinsey & Co., says that as a typical strategic consultant, you are doing a strategy which is typically a new business build, solving for a problem, which is very specific to you. Whereas, in implementation, what typically happens is that you want Consultants to not only allow the people on the ground to actually implement that strategy but also help them understand where they are facing those issues. So, at the implementation level, the Consultant’s role is more of playing the de-bottle necker of sorts rather than just being the person who leads everything. So, primarily, both of these are two sides of the same coin. 

How COVID has changed the way companies look at external Consultants

As we explore the career prospects of the Finance and Consulting domains, Harsh puts forth a point that Consulting has been much more intense in times of COVID than it was previously merely because the clients are now approaching Consultants for a lot of advice. Now that there is a lot of uncertainty, it becomes more relevant and impactful if Consultants can provide a line of thought, if nothing else. So, it is in a very good position right now.

In fact, it has become a lot more engaging now. Typically where the day for a Consultant would end at 9, it ends earlier now and people have much better control of when they would want to work. It’s being done virtually but apart from that, there is no difference.

How Banks have adapted to COVID 

As far as Banking is concerned, Souvik mentions that there is a wide-scale cash flow stress on the corporate side and because of that, banking will get affected. Where sectors like FMCG, Pharma and Telecom haven’t suffered the impact much, sectors like aviation, tourism or textiles have suffered a huge cash flow issue. To deal with this, the government, as well as the regulatory authorities, have come up with a lot of support - a lot of liquidity measures have been given.

But there is a risk aversion in the banking industry right now, which is one side of it. The other side reveals that there is a solid push on the digital transformation which was already going on in the Banking industry but COVID has accelerated it manifold.

Banks have also been very supportive. With the example of ICICI Bank, Souvik says that when this unanticipated crisis came into the picture, the bank supported its employees a lot. People who are not based out of branches were allowed to work from home, which was unimaginable previously. Time and effort have been invested for cross-functional training along with providing the necessary healthcare support. Also, along with the employees, the Banks have ensured that the customers are not impacted too. For the same, digital transformation measures have been implemented and a lot of work has been shifted online; from WhatsApp banking to mobile ATM vans, an instabiz app for all the trade transactions to the use of digital signature, online franking, cardless cash withdrawals.

On the impact on Investment Banking, Leah, Goldman Sachs, quoted that banking in terms of M&A has dropped significantly. But deals are still happening. Across the world and in India, Finance has stepped in significantly to plug the gaps in liquidity. Because of the cash flow crunch, businesses have really had to step into the market to tide through the prevailing crisis.

In terms of recovery for M&A, Leah predicts that it will happen in phases. The first will be where district sales step in and the M&A transactions will be within the industry, within the country. Towards the end of the year, we may start to see cross-border associations. 

Different profiles and the requisite skill-sets

When traversing through the career prospects of the Finance and Consulting domains, the panellists shared the profiles offered in their respective organizations.

McKinsey &Co.: Harsh mentions that Consulting does not specifically have a lot of profile play in terms of which profile is specific for a job. An essential skill-set is the need for a prospective candidate to be a good problem solver. You can be an engineer, a commerce student, a rocket scientist or anything else, but if you are a good problem solver, the deal can be made, he said. In addition to this, you must have some amount of communication skills and the ability to present yourself in front of clients.

A lot of training programs happen along with frequent training sessions on intervals of 6 to 10 months. These ensure that the skill-sets in terms of soft skills that need to be upgraded do get upgraded in addition to giving you an update on what’s happening in the industry as well.

During the recruitment process, workshops are conducted to train the people who will go through the interview process. This is basically done so that the candidate feels as confident as they can feel. You can have a number of skill sets but you need to be able to apply them and be confident about what you’re speaking, said Harsh. It also gives a different perspective for solving problems.

Kearney: The core profile is that of a Management Consultant at Kearney. Then there are two specific profiles - one is in Digital transformation and the other is in Analytics. The core skills required are analytical as well as communication skills - the level of these vary depending on the role that is being offered.

Expectations from candidates differ on grounds of the level at which one enters the company. If you’re being hired for the role of a Business Analyst, the skills of communication and analysis will be required and client management can be learnt on the go. But if a role for a senior position is on offer, the skill of managing clients will be looked for in prospective candidates.

The company also offers a variety of training programs at different levels. These are mostly linked to a candidate’s career trajectory in the firm.

ICICI Bank: The bank offers a lot of different roles in campuses which often varies from one campus to the other. The roles on offer are as follows -

Wholesale Banking group - This is end to end banking for large corporates.

International Banking group - Focuses primarily on the international subsidiaries for the corporate banks, the Indian linked businesses in overseas locations.

Commercial Banking group - Focuses on day to day transactions, domestic transactions, cross-border transactions, LC opening, trade finance products, etc.

Markets group - There a number of divisions in this segment. One particular role is that of trading. There are different assets on which you trade - equity, foreign exchange, different currencies, etc. The other is a customer-facing role.

SME Group - Similar to Wholesale banking group - they work with small and medium enterprises and take care of the SME sized corporates.

Other profiles are Retail Banking, Human Resource Group, Risk Assessment/ Management groups and the Technology/ Digital group.

In respect to training, Souvik mentions that when a candidate joins, he/she joins as a Management Trainee and there is a one year probation period. For the one year period, candidates are required to work and learn in the domain they’ve been recruited in.

Subsequently, lateral hiring happens internally, within the company where the employees can apply. These are called OJP - open job postings. This happens over a period of time. You have to start with some specialization and then move to generalization for which you will be required to understand the inter-banking roles. OJP is generally offered to somebody who has worked on a role at least for a period of 2 years. If after 2 years one wants to shift, then they will have to go through an interview and clear it to get selected for another role.

Goldman Sachs: For the essential skill sets, a strong understanding of the concepts of finance is crucial. Even if one has the ability to understand it, they can be considered for the job. This one skill is non-negotiable. Apart from this, candidates must be able to read financial statements in terms of being able to judge what it means going forward. Essentially, you need to be able to connect the dots. Leah advises candidates to be present in discussions mentally and put their 100 per cent to imbibe the information. They must be able to distil the information and get a point of view of their own.

In regard to training programs, Leah mentions that Goldman has one of the best training programs. Also, in the beginning, candidates always work in the shadow of a senior person and a lot of learning happens on the job. To top it all, internal mobility is very common in Goldman Sachs. But there are thresholds that you need to cross. You must spend a considerable amount of time in a particular role before switching to another. 

What profile suits me the best?

When discussing the career prospects of the Finance and Consulting domain, a crucial question came into the picture - “How should a candidate decide what role fits him/her the best?”

Kartik, Kearney, raises a point here, saying that one of the most underrated part of campus placements is the pre-placement talk which is often seen as a burden, but are a great source of information. Candidates can understand what their career trajectory will look like and then match it with their interests to decide what career they would want to choose.

Harsh, McKinsey & Co., asks students to understand the role of a Consultant. Once they understand that, they will get to know whether or not they would want to do that sort of work. For this, he suggests that students must connect with folks who are within the company. “Understand who is doing this and why they are doing it”, he adds.

On similar lines, Souvik, ICICI Bank, says that students in their first year of MBA have preconceived notions and automatic biases about the roles, locations and companies they would like to work with. He asks students to keep their mind open and speak to a lot of seniors as well as Professors in B-schools. Networking is the best thing that B-schools offer.

Leah, Goldman Sachs, adds to all the above points by saying that apart from networking which is super important, students must be honest with themselves. Even if the job is glamorous, they might not enjoy doing it which is completely okay. They must find themselves in areas that they would like to work in.

Advice from the leaders

On a closing note on the career prospects of the Finance and Consulting domains, the four panellists shared a bit each.

Leah advised students to work on their ability to innovate and bring something new to the table along with resilience. “Get out, meet people and figure out what you want to do”, said she. Souvik emphasizes on two skills - attitude and aptitude. While aptitude, he says, is possibly given, one must be passionate about their work in their attitude. “See if this is the kind of work you want to do, learn continuously, acquire new skills, understand holistically what the business is”, he said.

Harsh, on the other hand, had two simple cents to add. He asked students to put their effort in building relationships and stay curious. “Only when you start asking questions do you start understanding things”, he mentions. Kartik suggests students to not be afraid to stand out of the crowd.

IGNITE - The Spark to your Dreams, was realised through a series of 6 information-packed sessions which saw recruiters and leaders from Reliance, ABG, TAS, Flipkart, Mondelez International, BCG, McKinsey, Bain & Co. and more. In case you missed any session, here are links to catch up on them: