The collapsing banking sector and its implication to the study of banking in our universities

In the not too distant past, the Ghanaian banking sector was very buoyant and colourful to the admiration of many. Many foreign banks found safe haven in Ghana. They had so much promise for the Ghanaian economy. Access to loans were as easy as a hot knife cutting cheese. Their offices are huge and flashy, and their banking halls are very clean and fitted with modern communication gadgets. Lucky, customers had hot coffee, tea, water and juice. They poached staff from their competitors by giving juicy packages. Staff smart suits can be compared to Paris suit designers on the catwalk. They drove expensive cars. Their offices were flamboyant. They opened up numerous branches across the country and they employed many.

Could the then growth in the banking sector be the answer to Ghana’s finance? Recent phenomenon in the Ghanaian banking sector has given cause for worry and many are asking what the future holds for banking in Ghana. Are there more banks to go down as some financial and non-financial pundits are anticipating? In this article, I will take a dive into the study of banking in our universities and what the future holds for the discipline in light of recent and anticipated future happenings in Ghana’s banking sector.

Privatisation of higher education in Ghana gave rise to the number students offering courses in Business Administration with specialisation in Banking and Finance. This happened at a time when the Ghanaian banking sector was experiencing speedy growth. Let’s note that the growth of the banking sector did not only create employment for graduates of banking but also business administration as a whole. For instance graduates of Human Resource, Marketing, Accounting, Finance, etc. all gained opportunities to work in the expanding banking sector.

Even before university students could graduate to seek employment in the banking sector, they had opportunities of doing internships in the banks. Some through internships got jobs in the banking sector. A good guess points to the fact that from the year 2008, we saw a beautiful and promising future of the Ghanaian banking sector. The sector continued to grow in numbers as new banks were being established until year 2017. However, year 2018 seem to be a turning point in the fortunes of the banking sector in Ghana with the major takeover by the Bank of Ghana.

The implication for the collapsing banking sector in Ghana will certainly affect university students and/or graduates who studied or are studying banking. The promises that studying banking holds for       students and/or graduates includes:

  1. Exciting career

Career in banking is an exciting one as it offers a fast-paced and continuously challenging career. The cycle of volumes of worldwide trade cannot be completed without the involvement of the banking system from both buyers and sellers. This makes the banker very important. The quantum of deals increases the banker’s adrenalin making the career exciting.

  1. Professional development

The banking profession is one that provides good opportunities for professional development. Great banks that have stood the test of time like Citi, JP Morgan, NatWest, Barclays, Credit Suisse, Morgan Stanley but to mention a few are banks who have track records to giving opportunities of structured training and development to their staff.

Good banks are those that invest in their staff by developing them leading to obtaining professional qualifications to advance their career. In fact one of the expectations of many staff is to become better than when they were employed. Banks acknowledge this fact knowing that a trained staff translates to efficiency which maximizes profit.

  1. Remunerations and benefits   

In some developed countries, the expected starting salary in Investment Banking is not less than £45,000 annually which is relatively higher than what many graduates get in different occupation and even graduates in different departments of the bank. Not only do they give fat salary but attractive benefits as well including insurance, subsidised travels, health care, food and gym membership.

Least I forget, the banking sector also offers rewarding bonuses. Such bonuses attracts many to work extra-long hours during weekdays and weekends, and some times during holidays. Some even forfeit their annual leaves just so they can take leave encashment.

  1. Travels and working abroad

High flying banking officials travels a lot for work. The global nature of the baking career requires that bank officials travel a lot to their branches abroad for work. Not only to their branches but also to do business deals in other countries. Traveling abroad for work is a high point for many graduates working in the banking sector. It is actually one of the motivating factors for young graduates who seeks employment in the banking sector.

In Ghana, some of the Nigerian banks like JP Morgans sends all their fresh graduate employees to Nigeria for their initial graduate training. JP Morgan sends all their fresh graduate employees to New York for their global banking training.

  1. Longevity of career plan

The banking sector promises longevity of career plan. When one successfully works with a good bank over a period, it enhances their CV making it attractive to future employers. That notwithstanding, working in a good bank promises stability of employment. Due to the nature of the banking work (the competencies and dedication required), banks love to retain their staff who have a proven track record of dedication and quality service.

This makes it competitive for employees to work hard enough to have that longevity of banking career and when they lose interest in banking or have the need to change career, their experience and dedicated tract record at the bank enhances their prospects of getting hired quickly.

Having elaborated on the five (5) points above among the reasons why the banking sector is attractive, Ghana faces a peculiar challenge in the sector which if not addressed immediately and solution sorted, it will have a telling effect on the sector that may trickle down to the study of the discipline in our universities.

Some of the implications that the banking sector in Ghana may have on the study of banking in Ghanaian universities may include:

  1. Low enrollment of Ghanaians

The wake of the surge in Ghana’s banking sector is likely to promulgate low enrollment in the study of banking in Ghanaian universities. The expectation of many banking students to gain employment in Ghana’s banking sector will be unstable with recent disruptions in the sector. It is a gamble for students to enroll on a programme that has no potential for easy access to employment.

The situation may not be the same for international students studying banking in universities in Ghana. The banking sector may hold promises for those students in their home countries and therefore may not be perturbed by the happening in the sector in Ghana. Albeit, Ghanaian students studying banking with the aim of working in other countries with their qualification may also not be affected.

It is expected that some confidence will be breathed into the banking sector so that it will not have a tolling effect on students who wish to study it.

  1. Low income level for universities

In the event that students’ enrollment in banking reduces, it may mean low income level for some universities if those students do not opt for different courses in the same university. Different students may enroll in different universities based on the university’s strength in delivering those courses.

If students know certain universities to have strong faculties in banking and for some reason the students decide not to study banking, they may not necessary enroll in same universities because they university also offers communication studies which is their new choice of study.

  1. Dwindling effect on human resource capital

If enrollment in the study of banking dwindle due to students being scared of the sector, it will definitely affect the banking human resource capital. In the current situation where the banks have the luxury of recruiting from a large pool of graduate of banking, their choice will be limited to select from a tinny crop of graduates who enroll on the programme.

 

  1. Internship                   

Interns plays formidable roles in helping the workforce of an economy at a relatively low cost. If the anticipated situation occurs and enrollment in banking at the universities reduce, banks will have difficulties getting banking students to serve as interns. The banks will be forced to use students of other discipline rather banking and the benefits that will accrue to banking students at the various banks will not be attained.

Conclusion

The global financial meltdown in the millennium seem not to go away soon. Ghana is having its fair share of the unexpected banking difficulties that seem to be looming in the sector. With the growing number of banks in Ghana with high cost of operation and not so profitable operations, it seem that the financial policy maker (the Bank of Ghana) is making every attempt to strictly regulate the sector towards stability.

It will be an interesting future study to know how the scare in the banking sector impact enrollment of students in the study of banking after the year 2018.