Why you should pursue a Master’s in Financial Engineering in 2020

SOURCE: Photo by Romeo Gacad/AFP
You can see great return on investment and enjoy high starting salaries with a Master of Financial Engineering degree. Photo by Romeo Gacad/AFP

By U2B Staff 

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Master’s of Financial Engineering courses are not new, but they are becoming increasingly popular today with the rise of data science and FinTech. 

According to Investopedia, the definition of financial engineering is “the use of mathematical techniques to solve financial problems”, using tools and expertise from computer science, statistics, economics, and applied mathematics to address current financial issues and devise new and innovative financial products.

Dr Linda Kreitzman, Executive Director of the Masters of Financial Engineering programme at Berkeley Haas, said that the difference between a Master’s in Finance (MFE) and Master’s in Financial Engineering is that the latter is “more technical and more data-science-oriented” whereas the Master of Finance is more general in scope.

She also added that MFE is ideal for students who have strong skills and interest in programming, statistics, mathematics, and finance.

MFE programmes are also suitable for those who are capable of being dynamic leaders and have strong communication skills. 

Far from number-crunchers who sit quietly at the back of the room, MFE graduates are those who are capable of innovative thinking and problem-solving in an emerging fintech landscape.

Thus, it is very much a multidisciplinary degree that involves drawing on different fields and differs from a Master of Finance in many ways.

This is exemplified in Julia Kapran’s academic journey, a 2019 graduate of the B.S/M.S Program in Financial Engineering programme at New York University Tandon School of Engineering. 

Julia Kapran earned her undergraduate degree in Applied Physics in the NYU Tandon School of Engineering Honors Program, with minors in Creative Writing and Mathematics.

Initially planning on pursuing graduate programmes in physical oceanography, a decision to take some classes by the Financial and Risk Engineering department before she graduated with her Bachelor’s changed her entire career track. 

Just two classes – Intro to Derivative Securities and Corporate Valuation – piqued her interest in Financial Engineering enough that she ended up studying more of the math and finance required for the B.S/M.S Program in Financial Engineering programme’s rigorous curriculum over the summer.

During her course, Kapran was involved in many communities, events, and competitions as possible on campus, and competed in the 2019 IAQF competition with her classmates. 

She is currently interning as a Wealth Management Advisory & Investments Intern at Merrill Lynch, and is looking for full-time job opportunities in risk and portfolio management and data science, according to her LinkedIn profile

She is also keen on seeing how different academic and professional backgrounds can come together to solve problems in Financial Engineering, and she finds that the challenges int eh field are “truly deep and multifaceted” with “meaningful and exciting problems”. 


Paving the path to successful careers in FE

Graduates from MFE programmes typically go on to work at investment banks, hedge funds, fintech firms and as consultants in diversified roles — from quants to data scientists to portfolio managers.

Those armed with an MFE will see their investment in the degree pay off. According to the 2017-2019 Baruch MFE Employment Report, 85% of alumni in the Baruch MFE program work in the financial industry and saw high stating salaries the first year after graduation.

Out of 28 graduates in December 2018, 26 were placed in jobs during the first year, receiving an average of $151k first-year starting salary and sign-on bonus. A small number of graduates already held senior positions in the financial industry. 

It was also noted that the report does not include annual performance-based bonuses – typically an additional 10-100% of the base salary –  meaning the first-year total compensation of our graduates is even higher than the compensation reported. 

50% of employers of the December 2019 graduate cohort are either in hedge funds, prop ertytrading or asset management, while 38% are investment banks. The remaining 12% of employers are from FinTech or Tech sectors. 

Interested in pursuing your Master in Financial Engineering but can’t travel due to the COVID-19 pandemic, or can’t give up your full-time job?

Master of Science in Financial Engineering programmes are offered online or have distance learning options by universities around the globe.