The financial industry is becoming so reliant on IT that it can be almost called IT itself. The change in the financial industry is so rapid that those working in IT and finance are struggling to catch up with each other’s knowledge base. IT departments are trying to make sense of the complexity of finance, while finance departments do not know whether their tech ideas are feasible. CFM was created to address the communication gap between IT and finance and prepares its students to make an impact on ever-evolving financial services and beyond.

An engineer friend once told me that financial markets are like a jungle – not one model has been able to forecast or capture everything that happens. CFMs, who have a financial background, can create mathematical models and use technology to match them to reality. It is an area where AI and machine learning can be useful, though both disciplines are still in a theoretical stage.

Both finance and technology are seen as ‘necessary evils’ by many people I have met, both in co-op and my personal life. They are necessary to achieve business objectives. Frustration over not having enough money to launch a great idea, or how a software works is quite commonplace. I can say that being in CFM has trained me to build a sense of confidence in these skills. It puts me in a position to help many people with their pain points around finance and tech.

Finance and technology are also resources, and knowing how to supply and use those resources is useful for anyone who wants to make an impact in any field. For anyone studying CFM who is not sure if this program is really their thing, just remember that you can use what you learn here to create anything and solve any problems in the world that you are genuinely interested in.

CFM coursework involves a lot of problem-solving practice, especially the programming assignments. One beautiful thing about the coursework is that it has trained me to think simply and efficiently, in ways that I would not have considered before. If this phrase: “Find the least number of battles that will win you the war” inspires you, then chances are, you value what CFM has to give you.

Powerful businesses and people know how to incentivize other people to do their bidding by offering them the resources that suit their needs. They are also good at striking deals with other powerful people, and gamifying the work that others do for them so they are motivated to keep doing it. A CFM grad can gain influence and lead people in such a way, by providing others with the funding and technology that is right for them.

Now you may be wondering, why is financial technology important? Here are some reasons:

– Governments are providing fewer services for their citizens. With financial tech, citizens can monitor their spending, budget and save for a rainy day, and maintain their living standard without having to consult experts (and pay fees). This is especially good for underserved lower-income families. It frees them up to do what they want with their lives versus what pays bills.
– In business, finance requires specialists who have discipline and competency so that money is not mismanaged. Computers can be taught to repeat the same financial tasks and do analysis with more consistency than people can. On the other hand, specialized professionals will be freed up to offer complex advice that a computer cannot.
– Technology keeps financial data secure.1
– Financial service customers want products tailored to their unique needs. Mobile, big data and analytics help do the job.2

With those things in mind, here is a list of occupations that a CFM grad can enter, along with descriptions and/or interesting facts about each.
Note: this list is not meant to be restrictive. There are many more occupations that exist and many that have not been invented yet.

IT Business Analyst – devises ways to meet business needs as effectively as possible using technology. An IT business analyst up with tech developments and trends in finance affecting his/her firm’s products so they can make best recommendation. He/she is also good at managing relationships with people.3

Banking Applications
– Mobile banking is an area most likely to ‘delight’ customers, and is also becoming a yes/no factor to opening a bank account.4
– Web banking reduces physical effort from banks, at cost of relationships with the bank staff who can waive fees, get loans approved faster, or provide financial advice. Many complex transactions cannot be sorted out purely over the web.5

Developers – they build the banking applications.
– Banks are creating ‘funky’, Google-like work environments to attract talented technologists
– It is common to see collaboration across multiple offices and time zones
– The ideal developer is good at communicating his/her ideas 6
Quality assurance (QA) – tests applications to make sure that the applications have no bugs and meet customer’s expectations. The quality of a company’s applications can make or break a customer’s trust in the company.

eBusiness – makes stores cost-efficient, eliminates geographic boundaries to buying products, and removes the cost of salespeople. 7 Fun fact: 81% of shoppers research product online before shopping 8

Investment Banking – investment bankers are ‘like real estate agents for companies’, and deal with many companies to diversify the risk. They match investors to their client companies and do not use their own money. 9

Portfolio management – the art and science of investing in the right balance of assets to maxmimize return for risk taken. A portfolio manager assesses strengths, weaknesses, opportunities and threats on whether to invest in debt vs equity, domestic vs international, growth vs safety and other trade-offs.

Fintech – a sector that rose during the 2008 financial crisis, which lead to changes in regulations.
– Banks spent most money on complying with those regulations and did not have money to innovate. Credit was frozen: no one could get loans.
– Customers didn’t 100% trust banks; they wanted transparency about their costs.
– Entrepreneurs took advantage of landscape to provide efficiency, security and great accessibility in a landscape of changed regulations.
– The idea of ‘fun-tech’ has also emerged: how to engage customers using gamification techniques.
– There is a huge market opportunity in ASEAN countries. For instance, only 20% of people in Indonesia have bank accounts
– Peer-to-peer lending shortens loan approval times from weeks to hours.

Operations – what a business does in its day-to-day. How to make the operations strategy achieve business goals, and not simply make operations efficient? Operations also need to meet deadlines. How can departments, rather than individuals, be held accountable for their tasks?

Business Strategy – the art of figuring out where a business will be in the future and how it can get there. 95% of products introduced each year fail because they don’t address customer needs. What else would you do if 45% of your activities were automated? What would you do if your product decreases by 50% in value each year? How do you stay profitable in running the business? How would you start a $1B company in 15 months?
If you want to start your own business, ask yourself these questions: what kind of legacy do I want to leave behind in my life? What if I had all the money and tech I needed? How much do I need? How do I win over my competition?

Business Intelligence (BI) / Data Science – the art of providing mission-critical information that measures busines impact. For banks, BI improves the decision-marking process in an environment of changing demands and fierce competition. BI aims to be comprehensive yet simple and understandable. It can provide analytics on customer relationship management, performance management, enterprise risk management, asset/liability management, compliance, market segments, profitability, and whether to sell products simultaneously / in packages.

Security / Cryptography / Privacy – more and more digital experiences are being added to banking products. Customers expect each of these to be secure. Businesses are anticipating threats by gaining data on their tactics, techniques and procedures. Open source software still needs security. Users do not care about keeping their passwords complex, so more advanced ways of authenticating them are needed. New technology being developed to keep banking products secure: AI, machine learning, advanced authentication and adaptive controls

Customer relations management, sales, marketing (also known as ‘front office’)
The future investor is going to come from developing countries. Each customer needs products tailored to them. Right now, the customer experience level of finance is nowhere near Apple and other high-tech companies. Banks are now collaborating more closely with their front office as that is the place where they can learn the most about their customers.

Risk Management (also known as ‘middle office’) – calculates the credit risk, market risk, liquidity risk and the operational risk of every business decision to determine if it is worth going through. Market risk has become more complicated to manage with the pace of innovation.

Admin and support personnel, accounting, IT (also known as ‘back office’) – often outsourced and automated. In banks, many customer requests are still made in paper. To simplify it all can improve productivity and customer service by more than 50%. Because banks have been focusing on launching new products and not on simplifying them, there are many layers of complicated IT architecture to deal with.

Document Management – business-critical documents cannot afford to get lost, especially under a time crunch or litigation. To prevent information theft, access to sensitive documents should only be given to the people who need them. File-sharing and group work is possible through various document platforms.

This post was written by Linna Zheng, 3B CFM.