For those living in financial epicenters like New York, London or even Chicago will see first hand how a career in finance can really pay off.
Often, the highest paid leaders in banking, financial advising or private equity forge their path through working their connections while demonstrating that they can financially engineer - and predict - market outcomes better than their peers.
While the anecdotes of wildly successful careers in finance still persist today, financial technology - aka 'fintech' - is creating a paradigm shift.
Venerable financial firms now seek more software engineers than analysts. In order to meet the demands of today’s consumer, banks and financial institutions need to undergo their own digital transformations. Most take a hybrid approach by hiring more technology talent in-house to spur innovation while also working with cutting edge startups in the field as partners.
The fintech market is huge. According to KPMG, Q4'17 propelled global fintech funding over the $31bn mark for 2017. The industry will catalyze the evolution in the way we save, invest and exchange money as well as recharacterize work in financial fields.
The modern financial services customer
Arguably the primary benefit of fintech is access. In the past, access to financial advising and investing tools remained primarily reserved for the wealthy. Today, thanks to innovation in fintech, investors of every financial status can access investment tools.
Low to no minimum accounts
Take Acorn for instance. The app helps people save by rounding up purchases to the nearest dollar and investing that change. It modernizes the old school practice of literally saving change.
Acorn provides free money management for college students. The company targets a demographic ignored by generations of wealth managers. The Irvine, CA based company is now valued at $50m.
Customers in the developing world
Fintech reaches beyond providing low minimum investment opportunities for everyday people. It also extends to the previously unbanked. It may be hard to imagine, but 2.5bn people remain unbanked in today’s world. Fintech solutions from low to zero fee banking apps to cryptocurrency may help close that gap.
However, how will internet based applications help when nearly half the world’s population still lacks regular internet access?
Colombian fintech CEO Jorge Soto believes that increasing internet access first will pave the way for a hotbed of fintech innovation in the developing world. With efforts to bring more people online, the 'next billion' will join via technologies like 5G. Connectivity will become increasingly wireless. These solutions Soto notes must come from grassroots companies who understand specific localized challenges first hand.
Fintech in academia
Built in NYC, an online community for New York based startups, found that more than 263 companies are currently seeking fintech talent in the NYC metro area alone.
Open fintech job titles range from software developers to salespeople to compliance officers that seasoned professionals can parlay their skill sets to fill. However, recent graduates with academic training in fintech will enjoy a plethora of job options in the space.
In the past, universities primarily focused on the classic subjects. However, with the economy evolving at a breakneck pace, academic institutions are becoming more forward thinking.
For instance, NYU’s Stern School of Business now offers courses in FinTech Analytics, Robo Advisors and Systematic Trading and Applications in Entrepreneurial Finance. Students in the business program can also choose fintech as an area of focus.
The university also offers executive education in the space for lifelong learners looking to sharpen their fintech acumen.
AI and job security
The topic of artificial intelligence in the workplace remains controversial. The technology can help improve operational efficiency, reduce costs and relieve us of mundane tasks. On the other hand, for some roles and workflow process it may remove the need for human involvement entirely.
AI already plays a role in finance. Some companies leverage AI to help manage portfolios while others use it to power chatbots for customer facing services. Former Barclays CEO, Anthony Jenkins, predicts AI will potentially eliminate up to 50% of jobs in banking and financial services.
Other experts view this estimation as highly exaggerated. Older generations still prefer face-to-face service versus virtual assistants. Prosperity Bank executive, J.R. Amaya predicts it will take at least five to ten years before we start to see the number of tellers drop precipitously.
Amaya also foresees the nature of work shifting rather than vanishing in finance. More banks and financial institutions will hire service-oriented, people savvy employees and let the machines handle the simple tasks. Banks will also need more information technology employees to manage the data AI programs would process.
Dominant players embracing change
While fintech startups certainly perturb the big banks, it remains unlikely they will oust them. Instead, we see lage, venerable financial institutions embrace change rather than run from it.
Earlier this year, Mastercard announced the creation of Accelerate to help fintech firms scale. It aims to support fintech innovation via tailored support which includes access to Mastercard’s technology, leadership and investments. This aligns with the company’s strategy to be a first-choice partner for fintech firms. For a credit card company, this strategy will help ensure longevity since many of the disruptors in fintech focus on consumer payment technology.
So, despite the level of disruption in the space, finance still remains a viable and promising career path for many young professionals. However, those careers may look different than the classic financier we know from recent history.
AI won’t completely replace workers but technological innovation in this space means that the future of finance will be considerably different to the past.
Photo by Chris Li on Unsplash.