Analytical roles in the financial industry

The emergence of Fintech has led the financial industries worldwide to evolve. According to estimates, by 2030, the prospective Indian Fintech business is anticipated to generate $200 billion in revenue and $1 trillion in AUM. Big data analytics is starting to be used more and more by banking and finance functions (risk, marketing, operations, collections, regulation, governance, reporting, etc.) to maximize performance. As a result, there is a growing need for highly qualified professionals to take up data-driven roles in the finance sector. Let’s explore the analytical roles in finance along with the qualifications and skills needed in detail.

Types of analytical roles in finance

1. Financial Analyst

Examining and interpreting financial data and other pertinent information is a key responsibility of the financial analyst. To forecast future performance, they work on investment prospects and examine the company’s financial status.

Skills required:

• Technical skills
• Soft skills
• Financial modeling
• Quantitative skills
• Problem-solving abilities

Qualification required:

• A bachelor’s degree, ideally with a major in statistics, finance, or economics
• Other highly regarded majors are math, accounting, and even engineering

Tools/technologies required:

• Hyperion
• SAP
• SQL
• Quickbooks
• Big data

2. Risk Analyst

Risk analysts assist businesses wishing to expand into new markets or regions or make investments. They examine strategies and offer financial guidance to boost or maintain earnings, reduce risks, and foster expansion. They collect data, examine and assess financial and statistical documents, and carry out risk assessments for businesses and organizations.

Skills required:

• Excellent communication skills
• Analytical and technical skills
• Problem-solving skills
• Industry and market knowledge
• Negotiation skills

Qualification required:

• A bachelor’s degree (preferably a BBA or B.com) with a specialization in finance, banking, insurance, risk management, or economics
• Optionally, post-graduation in M.Com or MBA with a specialization in risk management, finance, or business analytics

Tools/technologies required:

• Machine learning
• Big data
• SQL

3. Budget Analyst

A budget analyst uses historical data analysis to develop financial reports and budgets for organizations. They evaluate planned budgets, keep tabs on expenses, and assist the management in making financial plans for the future.

Skills required:

• Numerical ability
• Research skills
• Financial forecasting

Qualification required:

• A bachelor’s degree in accounting, finance, or a similar field
• Specialized certification courses in financial planning, budgeting, and analysis

Tools/technologies required:

• Tableau
• Python
• Machine learning
• Big data

4. Financial Qualitative Analyst

Financial qualitative analysts review bond, stock, and other investment performance as well as opportunities for investment and decision-making. They assist people and businesses in making decisions about whether to hold, purchase, or sell securities by explaining their recommendations.

Skills required:

• Analytical skills
• Research skills
• Problem-solving skills
• Detail-oriented
• Proficiency in the latest tools and software

Qualification required:

• A bachelor’s degree in a quantitative subject, such as finance, economics, mathematics, or statistics

Tools/technologies required:

• MATLAB
• R
• Python
• Artificial intelligence

5. Financial Planning & Analysis Analyst

A crucial task in financial planning and analysis (FP&A) is creating strategies that will guarantee the financial stability of clients through financial analysis, forecasting, and modeling. FP&A professionals integrate financial information, analysis, and viewpoints from various fields to facilitate efficient financial planning and decision-making.

Skills required:

• Financial modeling and forecasting
• Data analysis and strategic thinking
• Technological proficiency
• Business acumen & ethical standards

Qualification required:

• A bachelor’s degree
• A post-graduate degree in MBA or M.com with a major in finance, business, accounting, and economics

Tools/technologies required:

• MS-Excel
• SQL
• Machine learning

Skills required for analytical roles

Skills needed for analytical roles in finance include:

• Analytical and Mathematical Skills 

Analytical and mathematical abilities enable you to identify answers to a wide range of issues and to formulate specific judgments and plans of action to address those issues.

• Proficiency in Data Analysis Tools and Software

To improve accuracy and efficiency in financial reporting and analysis, analysts need to be familiar with data analysis tools and software. Various technologies, such as blockchain and machine learning, are being integrated into financial systems.

• Financial Modeling Skills

An analyst wouldn’t be able to accurately evaluate risk or choose wisely to invest without financial modeling skills.

• Attention to Detail and Accuracy

It is one of the important skills required for analytical roles since it enables you to see potential issues early on and take action to resolve them, saving time and money.

• Effective Communication Skills

Analysts must possess the ability to concisely and effectively present complicated data results and help their team understand difficult analytical concepts.

Industry applications of analytics in finance

• Banking

One of the biggest industries for financial analysts to work in is banking. These analysts support banks in assessing risk related to lending, liquidation, and other important public services. 

• Insurance

One of the main industries where financial analysts are employed other than banking is insurance. Financial analysts assist insurance firms in determining the risk associated with covering a specific person or piece of property and in determining the appropriate premium amount.

• Corporate Finance

Financial analysts in corporate finance departments support the organization in making wise financial projections, cost-cutting strategies, and investment decisions.

• Government

Financial analysts help governments make investments and forecast future trends in the economy as a whole by utilizing financial data. When getting ready to develop a budget or draft legislation, this knowledge of financial analysis can be extremely helpful.

• Asset Management Companies

The financial analyst’s job is to analyze and evaluate information from many sources to assist in choosing the best possible asset allocation and investment plan.

Emerging trends in analytical roles in finance

• Investment in Digital Transformation

To maintain profitability and adapt strategically to dynamic market conditions, financial institutions are investing in digital transformation and utilizing data to gain a competitive edge.

• Huge Demand for Analytics Role

A report predicts that by 2026, the sector will generate over 11 million new jobs. Investments in AI and machine learning are expected to rise by 33.49% by the end of the year.

• Advanced Financial Analytics Techniques

To better understand the behavior, interests, and demands of their customers, financial institutions will employ advanced analytics techniques like deep learning, graph analytics, and natural language processing (NLP).

• Cloud-Based Data Analytics

Cloud-based banking analytics platforms will see an increase in use as they offer institutions flexible, affordable, and scalable solutions.

• Blockchain-Based Technology

It is anticipated that the incorporation of blockchain technology will significantly influence financial analysis. The benefits of blockchain include improved security and transparency in financial transactions.

Conclusion

Digital technology is going to be the foundation of financial institutions (FIs) as banks and other financial organizations evolve to become data-driven businesses. Big data analytics is starting to be used more and more by banking and finance areas (risk, marketing, operations, collections, regulation, governance, reporting, etc.) to maximize performance. As a result, there is a growing need for highly specialized data-driven roles in the finance industry. Thus, if you are looking to make a career in financial analytics, opt for MAHE’s undergraduate or postgraduate course in analytics. This course is specially designed to meet the needs of the latest industry trends and standards.