New breed of Finance and Capital Markets Professionals

Before I start to express my piece of mind I would like to set some hygiene points. The category of professionals I intend to generalise here are all those non-IT professionals involved in various pre/post-trade functions. We exclude the front office guys (trader, deal crackers, sales, BDs) here for the plain reason that there is a negligible scope if any for them to do anything different but generate money...

So we are referencing here all other professionals which includes everyone concerned with Research, Risk mgt, Performance mgt, Operations, Due-diligence, Compliance, Reporting, etc.

Enough of introduction & warnings...you know by now if this piece relates to you or not...

Ever since I qualified as a finance professional about a decade ago, I realised we had a parallel breed of professionals who were itching to penetrate on almost any damn finance job out there. Yes I am talking about ‘Engineers’. The value proposition they brought was superior number-crunching ability to otherwise pure play commerce turned finance professional guys. They found drawing a valuation model more interesting than replicating the mechanics of a pulley. Sorry for the bad analogy but you get the point, it is the monetary benefits that drove the choices. Surely the engineers I am taking about did bring their fair share of finance with a MBA, CFA®, or other finance/capital markets driven certifications.

Back then the organic finance guys still enjoyed an edge over the non-organic peers i.e., engineer turned finance professionals. Perhaps the so called ‘domain’ was considered and looked up more holistically then which worked in favour of the former. This is what I coin as a ‘pre-coding era’ wherein jobs attracted more organic domain driven talent than others.

Since then the splurge and demand of engineers or rather I should say in-organic finance professionals have only increased multi-fold times and the market continues to appreciate the skill-set they promise to bring. This is true especially since last 3 to 5 years. I term this as the ‘Quant era’ or the ‘Coding era’.
The trend noticed in last few years is in-fact other way round to that witnessed a decade ago wherein now the math and coding driven candidates (with little domain background) are given priority over pure play domain guys. In my view every job these days has a quant element to it. What this means is it’s not enough for one to just have a fair understand of the domain but at the same time have strong analytics sense as well.

With the rise of data science and big data elements, every role out there has a flavour of Quant. This is again contributed with the rise in statistical driven packages like R, Python, etc which deliver cutting edge analytics and modelling which was earlier complex and taxing to perform. What’s more is most of these languages are free to use (opensource). Surely every organization out there wants to automate manual processes and take statistically backed decisions to the extent possible. This is true even for functions like accounting where there is a fair bit of spreadsheet based reporting to be performed and something like a VBA comes in very handy.

Some coming back to the point of which professionals are preferred in this day and age, the answer is clear. It’s definitely the guys who come in with the knowledge of these packages or some coding background like C++ alongside some domain skills. Fortunately my exposure with students and businesses at large as a trainer and entrepreneur allows to me witness these dynamics very closely.
Hence the trend has changed from the time when engineers had to catch up on their finance skills to now when finance professionals have to catch up with analytics and coding skills.

What I mentioned above is not just true for entry point professionals but also experienced ones. There is a constant need to make ourselves as much indispensible as possible even in our current roles let alone exploring fresh opportunities. While this is easier said than done fortunately there are loads of online learning channels to ease the process. I personally used Datacamp site to learn some of these skills myself as I found it more user friendly and practical but, there are many more to choose from based on your individual use case and preference (not to miss, some of these are free).

Finally I would like to clarify that the merit of this article is not to conclude or rank some set of professionals over other but instead it’s to help both the types of breed to balance out their skill proposition to have that edge when seeking their career opportunities. Having those thrust worthy domain driven academics is no longer a powerful shield as it use to be erstwhile. The ‘Quant era’ is here to stay!

Wish you a productive and fulfilling professional year ahead!