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Financial Engineering and Quantitative Analysis is here to Stay

Aug 14, 2019| Article

The juxtaposition of engineering with economics and computer sciences have long been a growth driver for the most progressive financial institutions for almost four decades now. For good reason too, according to IBCA studies, global investment banking giant Goldman Sachs pays upwards of $174,000 per year to its quants. Post the OTC and ETD instruments boom in the 80s, quantitative trading and technical analysis has taken huge strides in going mainstream and in most global economies, have surged past fundamental stock picking, snapping up a market value of more than $ 700 trillion. Enough said.

SO, YOU THINK YOU CAN QUANT?

While most mathematics graduates or finance MBAs seem to think so, the large players in the global investment banks know well to separate the wheat from the chaff. Specialized, market specific and in some cases, product specific knowledge and background are pre-qualifiers even before applicants are considered for an interview. This is compounded by the advent of algorithmic trading in global markets, which alone accounts for 70% of the total volume in the US markets. Qualifying as a quant circa 2019 is equal parts mastery over products, computer science and of course, mathematics. An expansive umbrella of skills where outdated curricula and academic institutions fall woefully short.

THE ONLY WAY FORWARD

Industry specific knowledge and constantly upgraded skills will hold court going forward, according to investment banking CEOs and consultants. Deep industry knowledge is key and plays the eliminator’s role in most job applications. Industry leading certifications such as those from the Investment Banking Council of America are today increasingly being regarded and rewarded for their market-relevant curriculum, strong foundational knowledge frameworks and massive industry reach are making the cut as pre-qualifiers for investment banks across major markets. Investment banking is being reborn even as you read this, and if you don’t hop on board, you’re probably missing out on the career opportunity of a lifetime.

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