12th Nov 15
MBA graduates 40% less likely to opt for a career in banking
The Financial Times has reported that graduates from the top ten MBA programmes are 40% less likely to go into banking than they were in 2008 due to trading scandals, decreasing pay and the multi-billion dollar losses in the industry. Graduates are instead turning to companies such as Amazon, Google and McKinsey to avoid the insecurities of finance.
The FT’s analysis of graduates from the top ten MBA programmes reveals that only 10.6% are opting for a banking career, a 6.8% drop from the 17.4% who went down the banking route in 2008. This drop is seen most acutely at Harvard Business School where the popularity of a career in investment banking has fallen by more than half.
John Reed, a journalist writing for the FT, argues that this move away from the finance sector can be attributed to the failures of the universal banking model. He suggests that the model is “inherently unstable and unworkable” due to the lack of cost efficiencies of merging a variety of functions into a single bank, and the incompatible cultures of traditional banking and investment banking. The universal banking model is a relatively new creation in the US and an increasingly debated topic, so it will be interesting to see how it fares following the upcoming presidential election.