What Is Financial Engineering? 6 Career Options For A Financial Engineer!

Are you into numbers and complex calculations?  Do you wake up with an urge to check the stock market and if there’s been a rise or fall?? If yes, then you have found your calling— Financial Engineering it is! 

Wondering what that is?

Well, it is the application of mathematical methods to financial problem-solving. If you are looking for an application-based and practical job in finance, you should explore career options in financial engineering. Let’s take a look at the scope, salary, and opportunities in this field!

Financial Engineering sounds like an interesting mix of finance and engineering, doesn’t it? Is it though? Let’s find out!

Who is a Financial Engineer?

“The application of science-based mathematical models to make decisions about saving, investing, borrowing, lending, and managing risk”

This is how Zvi Bodie, Professor of Management at Boston University, defines Financial Engineering. 

What’s the role of a financial engineer? Well, he’s tasked with the following:

• To address current financial issues.
• Create new and innovative financial products
• Employ tools and insight from the fields of computer science, statistics, economics, and applied mathematics. 

As a financial engineer, you must have a thorough understanding of financial markets and market volatility. Financial engineers create simulations and models to predict possible market behaviors based on their knowledge of the financial market and financial theories. It sounds like there is a lot of finance involved, right? Well, it can be a fun and fulfilling career if you’re up for it. As a financial engineer, you can work for any reputable financial institution, start your own consultancy, or do both. 

Path To Financial Engineering

First of all, how to become a financial engineer? A bachelor’s degree in a finance-related field, such as accounting, mathematics, or economics, followed by a master’s degree in financial engineering or computational engineering, is required to become a financial engineer. Some top colleges that offer a course in this field are:

• Indian Institute of Technology, Kharagpur 
• GD Goenka University, Gurugram
• Indian Institute of Quantitative Finance

Students who are interested in finance and have strong scientific and mathematical backgrounds should take this course. The primary responsibilities of a Financial Engineer would be to create wealth by trading the company’s capital, develop new financial products, conduct risk management, and measurement, and manage investment portfolios.

What is the scope of this career? 

With the global economy reviving, there has been an increase in the demand for Financial Engineers. Financial engineering as a career first gained traction in India about a decade ago, and it has since grown significantly. Because of its enormous potential as a career, it will be the next big thing in a few years. Finance engineering is in high demand, particularly in a growing market like India, where the market requires more new techniques to be incorporated. 

Thus, Financial Engineers find work with:

• Global investment banks
• Hedge funds
• Asset management firms and proprietary trading firms
• Corporate Financial Risk Management Companies
• Mutual Funds Companies
• Equity Research Companies
• Brokerage Firms
• Engineering firms and other financial service providers

You can clearly tell there is a lot of scope and many opportunities available in this field.

6 Career Opportunities As a Financial Engineer

Here are some of the many common job opportunities available as a financial engineer. 

1. Corporate Financial Advisor

A financial adviser works with clients to educate them on various products and services that can help them improve their financial situation. They may assist clients in setting and achieving various financial goals, assessing their risk tolerance, and determining their expenses and assets. Other responsibilities include keeping clients informed about their financial progress.

In India, the average starting salary for a Financial Advisor is around 1.1 Lakhs per year. The highest annual salary a Financial Advisor can earn is 7.7 Lakhs.

2. Portfolio Manager 

A portfolio manager manages a client’s financial portfolio in order to improve its effectiveness. Their responsibilities may include advising clients on their investment objectives, analyzing current performance, creating reports to investigate what is going on, and adjusting investments as needed. Portfolio managers frequently work with various clients at once.

The annual salary for a Portfolio-Manager in India is 4,31,898. The highest annual salary in India is 35,63,032.

3. Risk Manager

Risk managers assess various financial and business risks for a company and devise mitigation strategies. They may create multiple risk management controls, emergency contingency plans, and risk management recommendations for business teams.

The annual salary for a Risk-Manager in India is 4,93,491. The highest annual salary is Rs. 27,48,958.

4. Financial Specialist 

A financial specialist assists businesses in organising and carrying out their financial plans. They may assist in the development of fiscal policies, the creation of financial reports, the accuracy of accounting records, and the creation of budgets with their clients. They also assist in the creation of cost analyses and the examination of expenditures in order to keep their clients on a budget. 

In India, the average starting salary for a Finance Specialist is around 3.5 Lakhs per year. The highest annual salary one can earn is 17.3 Lakhs.

5. Market Analyst

Market analysts carefully examine a company’s sales and services to determine its likelihood of success in the current market. They analyze various types of qualitative data, discuss market trends, and develop strategies to help a company compete at a higher level.

Market Analyst salaries in India range from 2.5 Lakhs to 13.0 Lakhs per year, with an average annual salary of 8.0 Lakhs.

6. Data Scientist

A data scientist collaborates with businesses to develop financial objectives based on meaningful data. They may assist these companies in comprehending this data through proper synthesis and developing algorithms and predictive models to broaden their understanding.

Data Scientist salaries in India range from 4.5 Lakhs to 25.0 Lakhs per year, with an average annual salary of 10.5 Lakhs. 

Let’s Talk Money!

Financial Engineers in the private sector can earn between Rs.30,000 and Rs.40,000 per month as a starter and can earn up to Rs.1,000,000 per month with knowledge and expertise. 

They are also entitled to other benefits and allowances in addition to housing, medical expenses, and free/concessional air passages for their family members and dependents.

Interested in the numbers-game? Let’s get  #CareerReady!

These are just some of the many options that await you. All you need to do is focus on your strengths and find the perfect fit for your interests and skills. If this seems a tad bit confusing, reach out to us. We’d be happy to help you find the right career fit! 

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