THE FIRST HIGHER EDUCATION, Anna Kislitsyna
|National Banking Journal (Moscow), February 01, 2014|
THE FIRST HIGHER EDUCATION, Anna Kislitsyna
Vyacheslav Semenikhin, managing director and head of Internet sales of the Urals Bank for Reconstruction and Development, psychophysiologist according to the first education, says, "A bank is an organism understandable for me but I have passed through several specialized courses of improvement of qualification anyway, I have a certificate of the Federal Service of Financial markets. I have also graduated from Stockholm School of Economics Russia.
National Banking Journal (Moscow), February 01, 2014
THE FIRST HIGHER EDUCATION, Anna Kislitsyna
Not all executives of Russian banks have the specialized first higher education. However, this circumstance does not prevent them (and in some cases it even helps) from successful management of financial crediting organizations.
The cult Soviet movie "Seventeen moments of spring" showed that the entire supreme leadership of the Third Reich had secondary education. However, this did not always correspond to reality. Russian bankers would be far superior to the failed rulers of the world: all executives of financial crediting organizations have higher education and many of them two or even three certificates of graduation from higher educational institutions. In any case, practice shows that the first higher education usually has the biggest effect on the interests of people and on success of their work because certain skills very demanded for career growth are enrooted together with knowledge. NBJ decided to find out how the bankers evaluated usefulness of the education obtained back in the Soviet higher educational institutions.
Re-qualification against the background of reforms
Surge of banking activeness that happened in the 1990s required urgent injection of deficit economic and financial specialists into the new system. More experienced specialists were working in state banks but private organizations were often opened by people who had no fundamental knowledge about the banking business.
People far from finance came to work to the new structures. Victor Nosov, vice president and director of the department of factoring operations of Promsvyazbank, recalls, "My youth and professional establishment coincide with the time difficult for Russia when it was not far-sighted to plan career: most often, what was planned did not come true. In 1987, I graduated from the Leningrad Electro-Technical Institute of Communication with specialty of "engineer of electric communication." In the middle of the 1990s, it was believed that it was possible to work little and to earn much in commercial banks. I came to work to Unicombank as programmer but I finally got bored by the hardware and dull programs. I started working with securities and currency operations. My work for other credit organizations was associated with them. Walking through the lobbies of IBG NIKoil once, I saw a table with "factoring" inscription. This word determined by further professional fate."
Profession of engineer was really demanded in the USSR: design bureaus and research institutes could not work without employees with such specialty. The fact that such specialists turned out to be very demanded by the first Russian banks had a simple explanation: engineers are literate in technical disciplines, their work requires analytical mindset, strong mathematical capabilities and logic, in other words, qualities so necessary for professional growth in a financial crediting organization.
Oleg Skvortsov, deputy CEO of Renaissance Capital bank, says, "According to the first education, I am a physics engineer. In 1986, I graduated from the Moscow Mining Institute. Economic education was not as popular then as lately. Engineers and researchers were demanded. After graduation from the institute I remained working there in one of applied laboratories. My career in the field of finance began in 1995 from position of financial manager of production company Kubost. A year before this, in 1994, I graduated from the Higher School of Finance and Management of the Presidential Academy. I received knowledge fairly deep for that time. Incidentally, it was not so simply to get it at first. Establishment of market economy was only starting in our country. There were practically no necessary educational materials about economy, finance, banking business and market of securities and it was necessary to study foreign literature too. I remember how I have studied economic cycles and Elliott waves with a dictionary. In 1996, I moved to Uniastrum group where in the period since 1999 until 2005 I was CEO of Uniastrum Bank."
In the Soviet epoch physics was associated with big discoveries and progress. The knowledge obtained by physicists in the process of education was important for work in a bank.
Svetlana Kulagina, chief executive director for small businesses of UralSib bank, recalls, "According to the first education, I am radio physicist. I graduated from the radio physical department of the Nizhny Novgorod State University named after Lobachevski. After graduation from the university I was occupied with scientific activity. Afterwards, I worked as programmer for ten years. I read that the EBRD announced a contest for participation in a pilot project for crediting of small businesses. I passed through it! In the EBRD we learned art of crediting, management and even obtained human resources management skills. Later, I graduated from the economic department of my university."
At present, eight of the ten bankers who occupy managerial posts in financial crediting organizations have engineering of physical first higher education.
Foundation for further growth
There appears a question: if a physicist or an engineer can work in a bank it turns out that efforts for training of relevant professionals – bankers, financiers, economists – are not quite in vain but secondary? This is not quite so: the major part of contemporary bank employees who have come to credit institutions from other industries have preferred getting the second higher education or additional specialized education.
CEO of Nordea Bank Igor Bulantsev (he graduated from the Moscow State Technical University named after N. Bauman with specialty of "engineer – radio electronic specialist") says, "In 2000, I got the second higher education in the Financial University under the Government of the Russian Federation with specialty of "finance and credit" and in 2006 I graduated from IESE Business School under Global Executive MBA program."
Vyacheslav Semenikhin, managing director and head of Internet sales of the Urals Bank for Reconstruction and Development, psychophysiologist according to the first education, says, "A bank is an organism understandable for me but I have passed through several specialized courses of improvement of qualification anyway, I have a certificate of the Federal Service of Financial markets. I have also graduated from Stockholm School of Economics Russia."
Svetlana Kroshkina, deputy CEO of Investtorgbank (she graduated from the Kuybyshev Polytechnic Institute with specialty of "programmer"), remarks, "Having understood that I wish to continue the work in the banking business where opportunities for self-fulfillment are broader than in capacity of a clerk in a servicing division of a credit organization, I drew a conclusion about a need to get the second higher financial economic education."
Nonetheless, majority of specialists who came to banks to work at the end of the 1980s or at the beginning of the 1990s pointed at an indisputable benefit that was given to them by their first certificate. Alexander Faleev, CEO of Rosgostrakh Bank who has graduated from the Khabarovsk Institute of Railway Engineers with specialty of "electrician engineer at transport," states, "Any education is always only beneficial for a clever person. Knowledge of technical disciplines helps understanding many economic and financial processes deeper and understanding their physical nature. This provides an advantage in fulfillment of many absolutely diverse tasks faced by a bank. I am also convinced that without knowledge of the basics of information technologies it is impossible to manager a big credit organization in today's realities."
Deputy CEO of International Financial Club bank Artem Sirazutdinov (he graduated from the Siberian Metallurgical Institute with specialty of "engineer in technology of aluminum production") confirms, "The first education is the foundation that lets you feel confident. Engineering education requires industriousness, work on yourself, forms analytical thinking, strong mathematical and statistical bases, teaches you not to be afraid of problems: you know that you will be able to solve any of them sooner or later. Technical education also enables you to understand clients better because most often their business is of production kind."
Svetlana Kulagina (UralSib bank) says with assurance, "The secret of my professional success is definitely in my first education!"
The current situation in training of professional human resources for financial crediting organizations is noticeably equalized, contemporary Russian bankers study also in the Financial University Under the Government of the Russian Federation, Stockholm School of economics Russia, the Russian Presidential Academy of National Economy and Public Administration, Moscow State Open University and other higher educational institutions.
According to Public Opinion foundation, in May of 2013 37% of working Russians would wish to improve qualification and obtain additional knowledge and skills. One-fifth of respondents would wish to master a new profession. There were grounds to presume that there were many bank employees among the respondents: the government already prepared amendments to the law "On banks and banking activity" according to which executives of credit organizations would be obliged to disclose information in the Internet about their qualification and experience of work. The obligation will be laid on members of the boards of directors, CEOs of banks, their deputies, members of collective executive bodies, chief accountants of the head officers, their deputies, heads and chief accountants of divisions.
A little of history
At present, Russian higher educational institutions release economists and financiers eagerly. A young employee who has just come to work to a bank will most likely continue obtaining of knowledge after graduation from alma mater: entire universities are being created at credit organizations for teaching and improvement of qualification of human resources.
It is difficult to believe now that just a couple of centuries ago there has been no one to work in banks.
At the time when Anne of Russia was implementing the simplest banking functions – loans were opened from the Mint at 8% per year – the matter was not about creation of a special staff of financiers yet. The Empress complained about "absolute absence of credit institutions and huge extortion of money lenders because of this." It was necessary to solve the problem simply and nobody thought about human resources yet.
Elisabeth of Russia had a more responsible approach to streamlining of finance, having signed a decree on establishment of State Lending Banks, as well as Bank for Replenishment at the St. Petersburg Port of Commerce and Merchantry. Since that moment, credit organizations were managed by nobility. It is possible to call Count, Senator, Field-Marshal General Petr Ivanovich Shuvalov can be called one of the most talented Russian bankers.
Dutch Ivan Frederike successfully managed Velden, Bekster and Frederike bank during the rule of Catherine the Great II. With his active participation Russian Empire drew one of its first foreign loans from Raymond and Theodor de Smet, bankers from Amsterdam.
Characterizing the general picture of development of the banking system of the Russian Empire in the 19th century, it is important to emphasize big-scale shortage of professionals. Since 19860, the period of establishment of the State Bank, invitation of noble merchants of the first and second guilds, as well as foreign financiers and entrepreneurs to service compensated for this shortage. Financial and railway tycoons from Poland served as a paragon of business skills. Adolf Yulyevich Rotshtein who headed the St. Petersburg International Commercial Bank was an especially prominent banker at the turn of the 19th-20th centuries.
At present, employment in a credit organization is not allowed without passing of meticulous check in the security department. In the past probably membership in a Masonic lodge or involvement into activity of a sect could hinder the work. Valuable acquaintances and relations were considered the main advantage of financial service.
Trips of Russian financiers abroad were very beneficial for the human resources reserve of banks. Specialists mastered both general and specific peculiarities of running of banking business and made sure of benefit of crediting not widespread in the Russian Empire yet in practice. Before coming to the post of the head of the State Bank, Yevgeny Ivanovich Lamansky visited France where h was inspired by the idea of creation of a specialized educational institution for bankers and after return to the Motherland he established the first school of bank accountants in the empire.
Academic economists start managing financial crediting institutions at the end of the 18th century – at the beginning of the 20th century. Professors Ivan Alexandrovich Stebut (Petrovskaya Agricultural and Forestry Academy) and Nikolai Khristoforovich Bunge (Kiev University) were especially famous in the past.
Former officials from the Finance Ministry or credit chancellor's office were often invited to managerial positions in banks. Specialists of such level created prestige of an organization. Minimal requirements were set for ordinary employees: people practically from all classes were employed and the only condition of hiring was presence of mathematical and analytical capabilities. At that time higher education was accessible only to selected managers.
Before the reform of the State Bank every employee could achieve significant success being in financial service. After the 1890s, only officials with higher education could make a career.
Development of the banking system resulted in appearance of some specialized educational institutions in Russia, for instance, Commercial Upbringing School at the Moscow upbringing house for orphan children, Emperor's Moscow Commercial School and Moscow Practical Academy of Commercial Sciences.
Higher commercial education appeared in the Russian Empire at the beginning of the 20th century on the basis of schools established by merchants in the past. For instance, the Moscow Commercial Institute was opened in 1907. It presented political economics, commercial law, banking calculations, insurance business and other disciplines. There were already 15 specialized higher commercial educational institutions in Russia by 1913.
Appearance of banks in the country initiated professional training of human resources in the field of finance management, which finally resulted in opening of some higher and secondary specialized educational institutions. These events deny the famous statement that there can be no indispensable people. Bankers became exactly such people in the past.
Results that Russian banking system achieved by the beginning of the 20th century were annulled in the period since 1917 until 1921. Political course was aimed at liquidation of all manifestations of capitalism. Banks as institutions trading in money were exposed to a strike in the first ranks. By decree of the Central Executive Committee of December 14 of 1917 the young Soviet state declared itself the only monopoly of banking business uniting the State Bank with all pre-revolutionary crediting organizations. The New financial structure was named People's Bank of the Russian Soviet Socialist Federative Republic.
Proletarians are not among bank workers and that is why workers' control was out of the question: after issue of the law on nationalization 50,000 employees of credit institutions went on a strike. In any case, we need to say that their strike has not lasted for a long time: the threat of execution for sabotage had magical effect on disobedient employees and they started working already as specialists of the People's Bank.
Throughout the entire Soviet period financial specialists were definitely trained but they had to work in restrained conditions of the administrative command economy. The principles of socialism used in the crediting and monetary policy became an obstacle for further formation of the reserve of bankers in the country.
Consequences of inefficient system of training of professionals of the banking sector became especially obvious in the period since the end of the 1980s until the beginning of the 1990s. Restoration of the two-tier banking system was going on then, cooperative banks started opening (for entrepreneurs) first and commercial banks started opening after them. They were gradually improving their business. Their managers majority of which, as it had already been said, had no special education were learning to manage financial crediting organizations. The more they were submerging into this process the more obvious it was becoming which role was played in their life and career by the first higher education.