Please state your current profile and explain your profile. If possible help us understand any previous profiles you’ve worked for.
I am currently pursuing my Masters (MS) in Financial Engineering at Columbia University, New York. I joined the program in August 2017. I still have a semester to go before I graduate in December. Meanwhile, I’m spending my summer at PanAgora Asset Management, Boston as a Quantitative Equity Research Intern. In my current role here, I am using quantitative methods to generate Alpha Signals from Alternative Data. To put it in very simple words, my work here revolves around developing trading strategies which can potentially generate higher returns based on gaining insights from historical data. Prior to coming to the US, I worked for one year at Credit Suisse, Pune as a Technology Analyst.
What made you decide to pursue a career in finance? What are the challenges in pursuing such a career?
My first tryst was finance was during my internship at Credit Suisse, at the end of my 3rd year at NIT Trichy. To be honest, I never really aimed/prepared for such a role. I was going through the usual drill of campus interviews for internships. A month (or maybe more) into the process, I started getting a bit restless as I wasn’t making it through to the final rounds of any of the ‘dream’ core companies that were coming by. That forced me to rethink whether what I was trying to achieve was really what I was fit for/wanted. That is when Credit Suisse came to campus, and I just decided to give it a shot – the rest is history. During my couple of months there as an intern, I got to learn about the world of finance, how complex the whole system is and how much more there is to it than what meets the layman’s eye. Though my role there was that of a Technical Analyst (programmer) the many interactions I had with the people of the firm, combined with tutorials that I went through regarding the business side of things got me interested and I decided to join them back full-time upon graduation.
Once I graduated and joined CS again I got to delve deeper into the division I was working in and also the functioning of other sections in the bank as a whole. But my role as a software developer wasn’t what I wanted in the long run, it was the financial aspect that interested me more. That was when I started researching the various paths I could take moving forward. I spoke to a couple of our seniors, and other contacts in the field of Quant Finance, got their views regarding this area of study and finally decided to take the plunge. At this point, I’m delighted I took that decision.
As for the challenges, it is just like the hurdles you might face while changing tracks from your undergraduate major to any other field. Firstly, you must be doubly sure that this is the path you want to follow – as much as it has a reputation of being highly rewarding, finance can prove to be a ruthless and unforgiving industry, so ask yourself the question several times before jumping into it. Also, if one plans to pursue higher studies in this field right after graduation, it could prove to be a bit difficult. It becomes tough to prove your point as to why you want to switch tracks immediately after a completely unrelated engineering degree. This is where a relevant job experience at least for a short while can help you segue into the sector smoothly.
How does one effectively transition from engineering to a career in finance and analytics? How important is work experience in pursuing highers in finance? What’s the ideal duration for work experience?
So, I think I already partly answered this question in the previous one.
The transition from engineering to finance is more of a process, it should happen gradually. You should not and cannot take the decision to switch overnight.
One should give ample thought to it, see if you are ready to take up the difficulties and challenges that await during the course of your study and career. Talk to people involved in the field – get to know if what is in store is actually what you’re expecting it to be. Understand the field thoroughly. For starters, ‘finance’ in itself is a very generic term. “I want to pursue a career in finance” is as good as saying “I want to be an engineer” – but what kind of engineer? Something like an MBA in finance has a sea of difference from Quantitative Finance. Try to zero in on where your interest lies. If you have an inclination towards economics and finance during your undergrad days – great! Try to develop that and build on it more, read more about it, do some projects/internships whenever you get a chance, sign up for online courses. Everything helps build your profile and prove yourself to be a worthy candidate and make that transition smooth.
As I mentioned previously, work experience can play a pivotal role in helping you establish yourself as a worthy candidate given the huge transition that you would be making from a core engineering background. Having said that, it doesn’t mean you cannot even dream of a Masters opportunity directly upon graduating, it is definitely possible. But that only means you would have to compensate for not having that added positive of a relevant work experience by doing enough during your undergrad days in terms of maintaining high scores, having certifications, relevant projects/internships. I can speak for Quant Finance – relevant internships are a must at the very least. Do not look to just satisfy the requirements set by universities to get an MS admit – think beyond that. This is a rigorous course and you’re thrown into the cycle of internship/job hunting the moment you land in this completely alien land. Unlike other core engineering fields, this is an area where universities might look for job-ready candidates. Which means even though you may be an academically high achiever, you need to have something behind you to prove your value in the industry setup. This would help you both during your application process for a Masters degree as well as your subsequent job hunt.
As for the ideal duration, I would say 2 years is always the ideal duration: enough to get a feel of the industry, but at the same time not long enough for you to get into a comfort zone and think twice before going through the rigors of another degree.
I personally worked only for 1 year because I knew the role I was in wasn’t what I was looking for in the long run, but by that time I had figured out that finance, and Quant Finance to be more specific was something I was up for.
What is financial engineering? What skills should students focus on learning/improving while in college to pursue a career in that field? What resources can students use to develop those skills?
To those of you who may not have heard of this exciting field of study before: Financial Engineering (or Quantitative/Mathematical Finance as it is also called), is a multi-disciplinary field which involves the use of mathematics, programming and financial theory. Adopting quantitative methods which majorly involve an intersection of these fields, for applications like Derivative Pricing, Asset Management, Algorithmic Trading, Risk Management is what constitutes this dynamic area of study. It is an ever-evolving field thanks to the varying demands of the financial industry as time progresses.
The three main skill sets required, are again, what I used to define this major: math, programming and finance(economics).
As a rule of thumb, if you are well-versed in at least 2 of these 3, you would be a good fit (though programming has increasingly become an inevitable prerequisite and has grown to be the backbone of financial engineering from the point of view of your career later). So, if you feel this is what you want to take up, go back to those first three/four semester of mathematics you studied at NITT. They are what you need more than anything. Brush up/develop your coding skills. That is something I cannot stress upon enough. Again, the following point is specific to Quantitative Finance, your finance knowledge is of the least important of the three – both in terms of getting an admit and later on, for a job. That is something that you will pick up on the job and hence you can afford to compromise on that. But not the other two. You will program a lot. And do a lot of intense math as part of your coursework. So, make sure you’re ready for that.
What kind of job opportunities can one expect after finishing a Master’s in Financial Engineering? Are there any exciting new developments in this field that could lead to new avenues of employment in this field?
There is a wide range of jobs that you can aim for upon graduation, based on your interest. Jobs range from a desk quant at investment banks, to asset/portfolio management, risk management and of course, trading. As I said, this is an ever-evolving field with constantly changing requirements. It is essential to keep yourself up to date with the latest buzz in the markets. As with virtually every other industry these days, the use of data analytics/ machine learning is fast catching up in the world of finance as well. Blockchain is another hot topic doing the rounds and is touted to be the future of the industry by many.
In NITT, we now have the option of applying for minors in other departments. Is a minor in Economics useful from a recruiter’s point of view? How much importance is given to it?
Definitely. Go for it. Do anything and everything that would help you better prepare for the transition that lies ahead, to sell yourself as the perfect fit for the role you’re vying for. Finance knowledge as I said comes lower down the priority scale while applying for quantitative jobs, but if you have it, nothing like it.
Have you done any finance-based certifications? Could you elaborate on them a little, providing a little insight into what each of them offer? Is it advisable to take any of these certifications while pursuing a UG degree?
No. That is one thing I deeply regret. You should definitely look to take the CFA and FRM exams and clear as many levels as possible while doing your undergrad or while working post your graduation. You wouldn’t find the time to pursue these later. I wouldn’t be the best person to comment on the exams and what they actually entail, having not done them myself, but I’m sure there is abundant information regarding them online.
What internships are best suited for a career in finance that one can take up while in college?
Definitely target the big banks that come to campus: Goldman Sachs, JP Morgan, Morgan Stanley, etc. Most of them offer only programming roles, but that’s well and good. It’s a great chance to hone your much-needed coding skills and at the same time get a good exposure to the financial industry. Alternatively, any data analytics focused internship would be a great choice as well.
How useful is the technical knowledge you gained at college in your career now?
Unlike my peers involved in core engineering fields right now, the first two years at NITT is the period that is helping me the most right now. It is all about the math concepts and basics of programming that I picked up back then: linear algebra, numerical methods, C++, differential / integral calculus to name a few topics.
How permanent is any choice of career? Do you think one should stick to a particular field or keep changing and experimenting as they grow in the industry? How can one be sure that a certain career path is right for them?
This is a very subjective question that cannot have one specific answer. Each one has a style that they are comfortable with and works for them. A might be highly passionate about what they are doing and never get sick of it for years together, and grow to be a leader in that field. Whereas B maybe a dynamic person who does not stop exploring and keeps looking for new avenues of growth. Both can be equally successful. So I feel it all depends on the nature of the person. As for my choice of career: I am a person who takes it as it comes. I definitely see myself sticking to this field for the near future, but who knows what’s in store! To judge your career path: well… do you look forward to your next day at work and are excited about what new stuff you would get to learn? Yes? You are on the right track. No? Rethink.
What are some things about your career path you wish you knew in college, in retrospect?
I definitely wish I knew those initial couple of years of coursework were crucial and something I needed to devote all my attention to when I started off with my B. Tech – considering the path I was going to pursue later.
That’s a period when most people tend to slack off – which is understandable considering we come out of the pressure cooker called 11th and 12th grade in school. Good grades in those relevant subject matter a lot, and that’s why I’m stressing on that point. Also, I wish I had a better awareness of certifications like the CFA which I could have taken up during the latter half of undergrad – again, I developed my interest for the field only after the end of my third year, and it was a bit too late by that time already. Also, I wish NITT had a stronger alumni base in this particular field – would have been of immense help for timely advice. Unfortunately, there aren’t many who decided to tread this path.
In your opinion, what is the extent one should go to find a balance between work satisfaction and monetary satisfaction?
Personally, I am not someone who believes in pushing your limits to attain monetary satisfaction. You will spend most of your time in life at work. If you aren’t happy there, what great joy can the money bring you to overcompensate for that? Also, as cliché as it sounds, I believe that if you really pursue what you like doing, success will definitely follow and monetary satisfaction won’t be far behind.
Is there any advice you would give to engineering students?
Explore. There are a gazillion opportunities out there. That’s the beauty (or curse?) of engineering: you are never tied down or overspecialized in one particular field.
There is always a related field to branch out towards and what you learnt is never going down the drain. All the very best.
To sum it all up, one can view financial engineering as an intersection of math (a lot of it!), programming, and finance. If you’re doubly sure that you are comfortable with all three aspects: welcome to the club!