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Degrees explained: Financial engineering

financial engineering
Financial engineering is used in a wide variety of areas including corporate finance, risk management, and the creation of financial derivative products. Source: Ina Fassbender / AFP)

Information technology is sparking the rise of financial engineering. The theories and the practice of finance are challenged today by complex financial and global systems and by dynamically changing regulatory environments and politics. A world in transition creates both opportunities and challenges for experts who can turn theoretical and financial constructs into profitable and innovative, custom-designed instruments in the marketplace.

How is this achieved? Through financial engineering. 

Financial engineering is a relatively new field of study. Various fields, such as economics, mathematics, computer science, and financial theory are integrated and utilised to develop algorithmic or artificial intelligence trading programmes that are used in the financial markets. Many areas, including corporate finance, risk management, and derivatives products, use financial engineering. 

The finance industry needs people who have deep mathematical modeling skills and computational expertise. If you feel comfortable in pressurised environments and can rise to the challenge of making ethical and robust financial decisions, this could be the finance specialism for you.

financial engineering

Students are trained in core skills for financial engineering and to use the key mathematical models that are fundamental to analysing financial issues. Source: Jung Yeon-je / AFP

What will I study?

An MSc in Financial Engineering undergoes advanced, contemporary financial engineering studies helps one forge a deeper understanding of the risks in modern financial securities, and in developing robust risk management systems. 

Students will learn to use software packages to perform statistical analysis and empirical studies. They acquire the ability to integrate the knowledge of mathematics, statistics and computer science in order to address, critically analyse and provide a rational appraisal of a problem. 

Teaching focuses on finding optimal solutions to financial problems in broader and challenging environments and trains students specifically in independent study and research — which is an essential skill for quantitative analysts. 

Students are trained to use key mathematical models that are fundamental to analysing financial issues. Option modules include concentration areas such as Corporate Finance and Financial Markets; Computational Finance; Technology and Algorithmic Finance; and Risk Finance.

What are the entry requirements? 

The programme is for holders of bachelor degrees in mathematics, advanced mathematical components, economics, finance, statistics, science or engineering. A minimum of an upper second, as well as strong mathematical and programming skills are recommended. If deemed necessary by the respective institution, applicants may also need to demonstrate English language proficiency by TOEFL or IELTS.

What are my career options?

You will be equipped for roles like a financial engineer, investment manager, portfolio manager, risk manager, trading strategist, financial manager, quantitative analyst, financial manager or analyst. You’ll likely work for insurance companies, asset management firms, hedge funds, and banks. 

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