Financial engineering is the application of mathematical methods to the solution of problems in finance. The study of financial engineering includes elements from applied mathematics, computer science, statistics, and economic theory.
Financial engineering draws on tools from investment banks, commercial banks, hedge funds, insurance companies, corporate treasuries, and regulatory agencies that employ financial engineers. Using financial engineering methods, these businesses try to solve problems relating to new product development, derivative securities valuation, portfolio structuring, risk management, and scenario simulation.
As a financial engineer, you will be working on the trading desk and delivering models, risk calculators, etc directly to traders, or in risk management, model validation, and library control, CVA, or quantitative development and programming.
A career in Financial Engineering: What you’re going to need
A strong background in electrical and/or computer engineering (with a master’s degree, preferably), very strong programming skills (C++, Java, C#, Scala, Python, etc.) and comfort with very large data sets are key. If you are interested in the mathematics of it all, having a PhD is a bonus, although not a necessity.
Successful applicants to Master of Science in Financial Engineering programmes typically have undergraduate degrees in Operations Research, Applied Mathematics, Mathematics, Theoretical Physics, Electrical Engineering, Computer Science or Engineering, and Mechanical Engineering.
Careers following a degree in Financial Engineering
Following an Master of Science in Financial Engineering degree, candidates typically get hired in the following fields:
|Fields||Companies & Roles|
|Risk Management||Companies: Axioma, CME Group, Morgan Stanley, Bank of America, KPMG, Oliver Wyman, Wells Fargo
Job Titles: Risk Analyst, Quantitative Management Associate, Senior Consultant, Client Support Associate, Quantitative Associate
|Research||Companies: PwC, ITG, Banco Santander
Job Titles: Senior Economist, Research Associate, Research Analyst, Financial Analytics & Derivatives Analyst
|Portfolio Management, Strategy, Modeling and Valuation||Companies: J.P. Morgan, Morgan Stanley, Goldman Sachs, PwC, CME Group, Barclays Capital, Citi, Squarepoint Capital, Credit Suisse, Volant Trading, Weiss Asset Management
Job Titles: Quantitative Analyst, Consultant, Quantitative Research Associate, Strategist, Valuation Associate, Senior Analyst, Quantitative Researcher, FX Electronic Trading Strategist
|Trading and Investment Banking||Companies: Credit Agricole Securities, ABG Sundial Collier, Volant Trading, J.P. Morgan, RBC, Nomura, Barclays Capital, UBS, HSBC, Morgan Stanley
Job Titles: Associate, Structuring Analyst, Trader, Quant Trader, Trading Analyst
|Corporate Finance, Financial Technology and Data Analytics||Companies (2015): World Bank, Goldman Sachs, Salesforce, Deloitte, Bank of America Merrill Lynch, TransMarket Group
Job Titles (2015): Financial Advisory Associate, Analyst, Technology Associate
Typical Salary Statistics
Where should you get a Master of Science in Financial Engineering degree from?
Master of Science in Financial Engineering programme: How to apply
Typically applications for all Master of Science in Financial Engineering programmes are online. The components of an application packet include: