Mixing tech with numbers
TWO WORLDS: Financial engineers are expected to be proficient in computer programming and strong in financial maths
Financial engineering is a multi disciplinary field where the methods of engineering, the tools of mathematics and financial theory as well as the practice of programming are pieced together. It also applies technical methods from mathematical and computational finance. Despite its name, financial engineering does not belong to any field in traditional engineering. In the US, financial engineering programs are accredited by the International Association of Financial Engineers.
The program is designed to provide training in the application of engineering methodologies and quantitative methods to finance. Students interested in pursuing the subject must be strong in calculus, computer programming, linear algebra, ordinary differential equations, probability and statistics.
Most financial engineering programs are offered only at the post graduate level, although there are also a few undergraduate degrees. Colleges typically offer B.Sc. in financial engineering while some also have a B.Sc. in computer science with financial engineering. Additionally, a few colleges may also offer a five-year combined BS with a Masters of Finance option. At the post graduate level, one will be awarded either a M.Sc in financial engineering or a simple master of financial engineering.
To apply to US colleges, one will need to clear the SAT for undergraduate degree and GRE for a post graduate program. Other requirements include official academic transcripts, letters of recommendation, personal essays, statement of purpose and financial documents. They will also need to provide a proof of English proficiency —TOEFL or IELTS test scores.
Fees and funding
Tuition fees for undergraduate degrees range from US$35,000-50,000 a year and for master’s degree, it is about US$45,000-50,000 annually. Scholarships are available in various colleges, mostly for post graduate studies. Since there are a limited number of scholarships, selection process is rigorous and competitive. Generally, scholarships offered are renewable every year, as long as the recipient maintains satisfactory academic performance. Grants, scholarship and other aid range from fixed amount funding to covering tuition fees. Each college has its own eligibility criteria. So check their individual requirements while applying for the grants.
The Financial Engineering programs are considered elite programs with high admission standards and graduates who are highly competitive on the job market. While an undergraduate degree is not common in this subject, Columbia University, New York offers B.Sc in financial engineering and Vanderbilt College Nashville offers a five-year combined BS/ masters of Finance option. Reputed colleges offering a Masters in Financial Engineering are Baruch College in City University of New York, University of California at Berkeley, University of Illinois at Urbana Champaign, UCLA Anderson and Columbia University, New York.
Financial engineering graduates are typically inclined towards quantitative roles in investment and commercial banks, hedge fund companies, financial and database software suppliers, asset management firms and financial services advisory firms. They usually take up positions as risk managers, investment bankers, derivative traders, designers of specialized securities and financial engineers. The most predominant functional roles for these graduates are in algorithmic trading and trade support, financial modeling and quantitative strategy, portfolio management, commodities investments, valuation, quantitative research and risk management. As the role of the quantitative analyst has grown in stock broking firms and in the world of financial services, this new discipline is for ambitious people.
Source: This article was originally published in Mid-Day newspaper – PDF File: Financial Engineering In US