The WQU Guide to Financial Engineering

What is Financial Engineering?

Financial Engineering is a field where mathematical techniques are used to solve financial problems. It is an interdisciplinary specialty that leverages skills and tools from computer science, statistics, economics, and applied mathematics, enabling practitioners to address financial challenges and opportunities, and in some cases, develop new products and services. As more businesses and organizations become data-driven, there are growing opportunities for financial engineers outside of the financial industry, including healthcare, the supply chain, agriculture, and more.

Why Study Financial Engineering? 

Financial Engineering truly emerged in the 1990s, and has continued to evolve since that time into the field it is today. Over the 30 years that financial engineering has been a specialty, data has become ubiquitous, and in turn, businesses, organizations, and even governments have become data-driven organizations. As a result, the demand for individuals with the ability to effectively collect, analyze and model data for decision making has grown. The amount of data in the world is growing at an exponential rate, doubling nearly every two years. Given the interdisciplinary nature of the profession, as well as its applications, there will be ample room for financial engineering trained individuals to specialize their skill sets based on personal interest and industry demand outside of the field’s core competencies. Demand for data-driven skill sets will grow well into the future, ensuring there will be new roles for financial engineers that currently might not even exist.  

What Does it Take to Become a Financial Engineer?

Becoming a financial engineer requires an advanced understanding of the profession’s core competencies, including applied mathematics, statistics, computer programming, and economics. While more institutions are beginning to offer undergraduate degrees that address these various disciplines, most practitioners gain their skills through graduate programs such as WorldQuant University’s MSc program in Financial Engineering.

While requirements and preferred qualifications will vary by institution, all graduate programs require a bachelor’s or equivalent undergraduate degree to apply. There are no hard and fast rules about the background one must have to get accepted into a Financial Engineering graduate program. At WorldQuant University, we’ve found that individuals with backgrounds in technical disciplines like physics, mathematics, computer science, economics, and engineering are best equipped to take on the rigor of such a program. The syllabus for a graduate Financial Engineering degree will vary by institution, but most will focus on the following topics, among others: 

• Statistical analysis
• Machine learning
• Economic modeling and forecasting
• Risk mitigation strategies
• Portfolio management theory
• Financial derivatives

With today’s technology, there’s a host of specific skill sets that most Financial Engineers learn over the course of their respective programs. Some of the most widely-used tools and programming languages in financial engineering include Python, C++, Java, R, and Maple, to name a few.  

What Types of Jobs Exist for Financial Engineers?

Traditionally, individuals with graduate degrees in Financial Engineering have worked in roles in the financial industry including: 

• Portfolio Manager: These individuals help companies and traders optimally allocate capital among different investment strategies developed by investment managers.
• Trading Strategist: In this role, individuals create the models, software and strategies that drive trading at their organization.
• Risk Manager: Risk managers review strategies created by the trading strategist and develop risk management policies to comply with regulation.

With more and more businesses becoming increasingly data-driven, greater opportunities exist outside of traditional finance that lend themselves to the skills financial engineers have. Some of these fields include: 

• Research: Whether through an academic institution or a technology company, more data in the world means we need more tools and products to make sense of it.
• Supply Chain: Assembly lines, and the supply chains that they connect to, create a wealth of data that needs to be modeled to keep distribution running smoothly.
• Healthcare: From genomics to drug discovery, healthcare is increasingly requiring individuals with machine learning experience to improve diagnosis and expedite discoveries.
• Agriculture: Feeding the growing population of the world will require data-driven financial planning, and the development of industry-specific financial products like crop insurance, and other risk management tools.

Job Outlook

In the United States, The Bureau of Labor Statistics expects roles for Financial Analysts to grow at 5% through 2029, faster than average across all roles. While there is no single statistic that points to the role’s outlook worldwide, increased financial growth in places like India and Nigeria means there will be an increased demand for financial engineering skill sets into the future.  

Does Financial Engineering Seem Right For You?

At WorldQuant University, we believe that talent is equally distributed globally, but opportunity is not. That’s why we’ve created the world’s largest Financial Engineering graduate program, entirely free and completely online. 

Designed by industry experts, our program integrates mathematical, statistical, and computer science tools with finance theory in a completely online and collaborative setting. Graduates are positioned to excel in today’s highly collaborative and fast-paced professional environments.

The two-year program consists of nine graduate-level courses and a Capstone Course during which students complete a culminating project. Our students are career-driven, computer-savvy quantitative thinkers. They have fully completed a bachelor’s degree, demonstrated their proficiency in English, and are interested in a future in financial engineering.

To learn more about the program, or start your application, visit us at www.wqu.org, or check out our video here.