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What is financial engineering?

What is financial engineering?


Finance is a strategic and central area of ​​activity within any business as it is an economic reality that can only exist with financial resources that can guarantee its livelihood and profitability. But much more than a simple necessity, the professions of finance are, according to the statements of several professionals, teacher-researchers, students or young graduates, very fascinating. At the heart of these professions, we note the emergence of a new training course offered by the major business and engineering schools, that of the diploma in financial engineering.

Throughout this article, we will be interested in this course and the profession that results from it by means of a discovery of his job description. At the same time, we will try to present to you the main professional and personal skills and aptitudes that must be acquired to practice as a financial engineer.

What does financial engineering consist of?

The current economic context is undergoing profound changes caused by an intensification of inter-sector competition, which pushes companies to seek specialized and tailor-made solutions in the face of increasingly difficult and complex decision-making. This environment has created the need for competent executives, able to set up, while respecting the postulate of rationality, financial arrangements perfectly adapted to the specific needs and objectives of economic agents, thus enabling them to realize their respective visions, while maintaining the strength of the balance sheets to meet shareholders’ expectations.

In other words, financial engineering can be defined as a set of techniques, advice and organization of financing that intervene in the support of the company’s strategy in the medium and long term. As a result, it is possible for the company to promote its development while securing its financial structure.

The daily life of a financial engineer, whether in a bank, a stock exchange, an investment fund or in a large company (main recruiters for this profession), includes several tasks ranging from observation, identification and the analysis of trends and market developments to ensure better risk management, generate solutions that enhance the company’s cash flow to optimize and enhance financial investments, etc.

What is the background of a financial engineer?

The profession of financial engineer is accessible through several routes, the main one of which remains the pursuit of a BAC + 5 diploma issued by a major business or engineering school (post-baccalaureate or post-prep), ideally relating to the finance. Even better, if it is precisely a master’s degree in financial engineering, given the fact that the educational content will be well targeted in terms of modules. Otherwise, it is always possible to pursue a master’s degree specializing in the subject. We can also mention the continuing education open to executives and professionals with a BAC + 3 license who wish to progress academically while preserving their position.

What skills and aptitudes to excel?

When dealing with figures on a daily basis, figures which in this case represent monetary values, the margin of error is very fine (if not nonexistent). In this sense, the advanced mastery of applied mathematics is a necessity, coupled with a solid knowledge of computer science given the fact that the design of tools and software adapted to customer requests is also part of the job description, in addition a general culture in fields, such as micro / macroeconomics, law, politics …

But as with every job, technical skills alone are not enough. The financial engineer must also acquire soft skills (communication, teamwork, stress management, etc.), be curious, have an analytical mind and master foreign languages.

In conclusion, we can say that being a financial engineer is certainly a profession of the future which is both lucrative and motivating, however it is a demanding position that comes with great responsibilities. Passion for finance, mathematics and IT is therefore important if we want to avoid burn-out and find balance and pleasure at work on a daily basis.

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