In addition to the published explanation in our F.A.Q.s of the required skills to be successful in the City, today we’d like to detail some of the related frequently asked questions about the necessary “hot skills” of the finance field at the moment.
“What areas should a university student master to be successful in the future?”
Mainly, microeconomics, quantitative analysis and applications of AI. We also strongly suggest Cross-functional skills. For example, learning accounting and marketing; enables positions as marketing controller or advising new companies on accounting issues with product marketing or development.
“Can I succeed in finance even though I’m not good at maths?
To answer this question, let’s consider the different kinds of mathematical ability. One is the arithmetic number crunching, that means being able to quickly do sums of large numbers, keeping track of zeroes and comparables in your head. This is useful in many disciplines of finance (trading, investing etc) but it’s not necessary to be extremely fast. It helps, though. And practice makes perfect.In finance, then, there is a stream called quantitative analysis, which is basically statistical methods. For this, you will need a good grasp of mathematics and should be able to remember or visualise the logic of formulae. However, for the most part, it’s not very hard. Like being able to multiply, take squares, roots etc. mostly you will be in a position to use a calculator! Of these are finding central tendencies (median, mean, mode, weighted and moving averages), dispersion (range, variance, deviations) correlations and coefficients, skewness, kurtosis, probability, permutation and combinations etc. All these will involve basic multiplication of squares and roots. The formulae are not difficult to visualise if you keenly look at it, its very application oriented and easy to remember. You would not have to do Integration and Differentiation (calculus) for finance courses.
Another application of slightly complex math in finance is in arriving at Time Value for Money (TVM), again this is basically compound interest kind of situations and interest yield computations. You will again have to remember some basic formulae and apply them. You will get to use a calculator for these, as it would involve exponent usage, reciprocals etc.. (x raised to the power y or worse still x ^ 1/y). Again, don’t worry, once you get the hang of it, the theory is very simple and logical for anyone to understand, we do it all the time in life, the maths is no big deal, as you will be allowed a calculator in your exams and of course you can use one in your life as well, and most of these will be done on computers (excel or worksheets).
Understanding some basic formulae and remembering to use them at the right places is all that is tested and in real life, you can always use them on a computer in a ready-to-use-function in worksheets. The ‘difficult’ mathematics, which is useful only in complex quantitative analysis, is often implemented using modelling packages or in bespoke software. Honestly, the number of people practising finance successfully who can’t do advanced mathematics or quickly compute sums in their heads far exceed the number of people who can. Many other assets are mostly needed, like good judgement, diplomacy, tenacity and humility, all of which will help you succeed with your own capital as well as other people’s money.
“Which skills in accounting should I have?”
- Finance people tend to be more focused on risk, projections and capital markets than on accounting, but a good financial analyst must understand accounting and how financial statement are derived. For accountants, everything must balance. For the finance people, it’s more about managing uncertainty. You will need a solid understanding of accounting and how financial statements are created along with the ability to analyse them. So, we suggest you to first get the basic skills as taught with a business degree. Then, to impress the employer with how you would use your skills to help them compete in the global economy.
Any extra final tip?
- Take some courses on Strategy, which will give you an edge amongst Finance specialisation students. This will sharpen your analytical and critical abilities in approaching finance related problems.
- Enhance your soft skills: You must enhance your communication skills, presentation skills and soft skills. For those who’re not confident about their soft skills, joining a finishing school to develop your personality, body language, interpersonal and social interaction skills will be beneficial.
- Be a team player: It is very important that you can work in a team, coordinate with your colleagues, communicate with them effectively and make proper adjustments.
- Develop corporate awareness: An employer is usually looking for the application orientation of the student and you must understand what business is all about and how you can contribute to the growth of any organisation.
- Strong Network: To be a successful professional, you must be well connected and have a strong networking with people in your field. Having a good network and being active on social networking sites will be useful for you.
