Banking, investment and insurance: Overview

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The industry in a nutshell

The UK’s banking, investment and insurance industry covers a wide range of employers, including investment banks, commercial banks and building societies, broking firms, independent financial advisers, insurance and reinsurance companies.

The industry has been strongly hit by the economic downturn, resulting in cuts in pay and a decrease in the number of jobs available. Although there is some optimism with regards to the future, the industry is still cautious about any long-term recovery.

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Despite the recession, the industry is still important to the UK economy. Graduate employers are keen to maintain their profile on campus and there are opportunities available in most areas of the industry for skilled graduates.

What kind of work can I do?

• Retail banking - covers the financial services provided by the high-street banks for individual customers and small businesses through their branch network.
• Investment banking - covers the provision of specialised financial services and advice to industrial, commercial and government clients.
• Private banking - specialist banks offering services to high net-worth individuals (the wealthy). The range of financial services offered is wide and can be tailored to the needs of the customer, e.g. asset management, estate planning.
• Mergers and acquisitions - buying, selling or combining different companies.
• Actuarial - concerned with long-term financial planning in areas such as insurance and pensions.
• Property insurance.
• Life assurance.
• Insurance broking - analysing client needs and negotiating the best deal with insurance companies.
• Reinsurance - insurers spreading their risk by taking on their own insurance against their claims.
• Underwriting - analysing risks and setting premiums.
• General management or operations - functions covering accountancy, marketing, management services, IT and human resources.

What’s it like working in this industry?

• The work environment is very fast-paced and dynamic.
• Although the work culture differs among firms, working hours can be long, particularly for new graduates in some areas of investment banking.
• Despite the current recession, graduate salaries are among the highest in the UK. Investment banks in particular are still offering very competitive starting salaries to graduates.
• Graduates entering the industry can earn an average salary of £27,500, with students entering investment banks expected to earn an average salary of £38,000 (The Graduate Market in 2009, High Fliers Research Limited).
• Many employers offer additional benefits such as a sign-on bonus (lump sum of money on joining the company), gym membership, pension scheme, private health insurance and a company bonus scheme.
• Many employers have diversity initiatives in place. Women, minority ethnic graduates and graduates with disabilities are currently underrepresented in investment banking and there are various programmes in place, for example Diversity Now, to encourage them to take up a career in this area.
• Full-time employment is the norm in the financial services industry.
• There is a good level of mobility within firms to progress up the career ladder.

How big is this industry?

• There are over one million people currently working in the UK financial services industry in more than 35,000 companies (UK international financial services - the future, HM Treasury, 2009).
• The financial services industry employs around 4.2% of the UK workforce (Labour Force Survey, Office for National Statistics, 2009).

Where can I work?

• Although The City of London is the focal point of the UK financial services industry, it accounts for just under one-third of overall industry jobs.
• There are thriving financial districts in other large cities such as Manchester, Leeds, Bristol, Edinburgh, Glasgow, Cardiff and Belfast.
• Many of the organisations in the UK financial services industry are part of international groups or have international interests and clients based outside of the UK.
• Opportunities to work overseas may be available to those who make their careers with global firms. Despite the recession there are still opportunities abroad, especially in emerging markets in countries such as Brazil, Russia and Kazakhstan. Students speaking Asian languages can find opportunities in Hong Kong, Singapore and China. For more information see opportunities abroad.