WHAT IS FINANCIAL ENGINEERING?
Financial Engineering is a discipline that applies theories and tools of Mathematics, Statistics & Probability, Physics and Computer Science to solve the problems of Finance. It is also sometimes referred to as Quantitative Finance, Mathematical Finance or Computational Finance. Modern investment finance has become very much dependent on Mathematics, Statistics and Numerical Computational Methods. Investments involve complex financial instruments the pricing, trading, risk analysis of which are complex and involve sophisticated mathematical models.
CAREER OPPORTUNITIES
Financial Engineers are highly valued worldwide in investment banks, commercial banks, hedge funds, asset management companies, securities trading firms, portfolio management firms, broking firm, consulting firms, mutual funds, private equity firms, investment research and analytics firms, financial consultancy services, financial software companies, treasury and financial planning departments of non-financial corporations, insurance companies, government financial agencies, pension funds, etc. With the evolution of algorithmic trading the demand for financial engineers is particularly high in the field of quantitative, algorithmic and automated trading. The combination of skills that financial engineers possess viz. understanding of complex financial strategies, mathematical and statistical models and computational programming proficiency, is in high demand, because it is difficult for employers to find such skill combinations in MBA Finance, engineering, physics or mathematics graduates.
JOB PROSPECTS
There is a high need for qualified financial engineers in the market. The demand for new financial engineers is particularly high in structured finance establishments. Moreover, the world of systematic, quantitative, algorithmic and automated trading offers various openings for financial engineers.
The graduates of Financial Engineering are highly valued by Investment Banks, Hedge Funds, Regulators, Stock Exchanges, Broking Firms and other financial institutions which deals which deals with complex financial institutions. The graduates of financial engineering courses are multi disciplinary experts and can seamlessly fit into investment finance and risk management roles if the course teaches along with comprehensive theories the practical application and implementation. These courses prepare students for technically sophisticated jobs as :
- Quantitative investment managers - Quantitative analysts - Hedge fund managers - Derivatives specialists - Algorithmic traders - Risk management professionals
CURRENT SCENARIO IN INDIA
Financial Engineering is a new field in India and as such there are very few skilled financial engineers available in India and the demand is much more than what is available. Some institutions have started offering courses in financial engineering and quantitative finance to create a pool of skilled manpower. Indian Institute of Quantitative Finance has been offering courses in this discipline. IIQF offers part time online certificate programs in Financial Engineering that are theoretically quite comprehensive and major thrust on practical implementation aspects.