What are Banking Certifications?
When considering to pursue a career in banking, having the appropriate banking certifications can enhance your reputation and move you closer to getting a promotion. The certifications can also help a banking professional increase their earning power and ensure quick career progression.
Although banking certifications are not mandatory, educated investors and clients give credit to banking professionals who spend long hours to get the accreditation, and it is a confirmation of their high ethical and professional standards. Individuals seeking to get the certification must complete hours of coursework and pass a professional examination at the end of their coursework.
- Banking certifications are designed to increase a candidate’s professional readiness and overall marketability since recruiters will take note of their industry knowledge and experience.
- Examples of highly rated certifications for banking professions include CFA, CPA, CIMA, CMA, and FRM.
- Financial professionals holding a key banking certification enjoy better job prospects, high earning power, more specialized industry knowledge, and a large number of opportunities.
Top Seven Banking Certifications
The following are the best banking certifications that banking professionals should consider when looking to build a career in the banking industry:
1. Chartered Financial Analysts (CFA)
The CFA designation is one of the most popular and rigorous certifications for finance and banking professionals. The certification is administered by the Chartered Financial Analyst Institute. The CFA program comprises three levels that professionals are required to complete and pass.
A finance professional with a CFA certification is highly regarded in the banking industry. They are considered experts in a variety of fields such as economics, portfolio management, investment banking, equity research and analysis, etc. Professionals with CFA credentials can work as financial analysts in investment banks, mutual funds, insurance firms, hedge funds, and consultancy firms.
2. Certified Financial Planner (CFP)
The Certified Financial Planner Board of Standards offers the CFP certification, and it requires candidates to complete a course comprising over 100 topics, including insurance, retirement planning, estate planning, stocks, bonds, etc. At the end of the course, candidates are required to complete a rigorous seven-hour test. Banking professionals with CFP certification are qualified to work in wealth management, private banking, and retail banking.
A financial planner who already completed the CFP course and obtained a practicing license from the CFP Board works with individuals to help them understand their investment options and make informed financial decisions based on their situation.
Due to the high level of trust that clients place in such professionals, the CFP Board regularly publishes information on the standard financial planning process and current licenses that are in good standing, which potential clients can access before commencing a working contract with a CFP professional.
3. Financial Risk Manager (FRM)
The FRM certification is granted by the Global Association of Risk Professionals (GARP), and candidates are required to complete detailed coursework and pass a two-part eight-hour test. The course is revised periodically to include new trends and changes in the area of risk management.
Professionals who pass the FRM certification course often work in banks as risk analysts and risk officers, and they help private clients make prudent investment decisions and mitigate risks. FRM-certified professionals use financial instruments to manage exposure to credit risk, market risk, liquidity risk, among other risks.
4. Chartered Alternative Investment Analyst (CAIA)
The CAIA certification is specifically designed for professionals who want to build a career managing alternate investments such as asset management or hedge funds. The CAIA course is structured into two levels, and it takes about 12 to 18 months to complete the coursework and sit for exams. It covers multiple topics such as risk management, asset allocation, hedge funds, private equity, and real assets.
5. Certified Public Accountant (CPA)
The CPA certification is offered by the American Institute of Certified Public Accountants (AICPA), and it targets professionals in the finance and accounting industry. The CPA certification is highly valued in the modern workplace, and it is a representation of the highest level of methodological competence and accomplishment.
The CPA certification requires at least 150 hours of coursework, and it covers a wide range of topics such as auditing, taxation, company law, financial accounting, management accounting, financial reporting, and risk management. Candidates who complete the CPA coursework and exams need a CPA license before they can offer audit and tax services in public accounting.
6. Certified Management Accountant
The CMA certification is offered by the Institute of Management Accountants. It is structured in two parts, and candidates must pass 11 financial competency tests. Finance professionals who hold the CMA certification get an opportunity to work on the corporate side of the business. They use their skills to make strategic financial decisions for the company.
7. Chartered Mutual Fund Counsellor (CMFC)
The CMFC certification is a ten-week financial course that is offered by the College of Financial Planning. Candidates who pursue the CMFC course must pass an exam at the end of the course, in order to be considered an expert in mutual funds. The CMFC certification allows candidates to better understand the complexities of the mutual fund industry and other package investment products.
Thank you for reading CFI’s guide to the different Banking Certifications. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below: