Hi: not a FE but thinking about it.

malexgreen

New Member
Hi,

I'm an electrical engineering working in the technology industry looking to become a quant/FE. I have a few questions.

  • Where do you see the FE field going in the next 10 years?
  • What are the biggest problems that current FE's in industry are trying to solve? Why are they big challenges?
  • What are the biggest problems that current FE's in academia are trying to solve, if they are different from those in industry? What are the challenges?
  • As a practicing FE who has come from the aerospace or technology fields, how is the corporate culture for FE's working at "FE companies" different from the kind of corporate culture an electrical engineer working at a technology company say like AMD or Apple may experience?
Thanks for your time.
 

fixedincomenyc

Fixed Income Analyst
Alot of these type of questions are answered at globalderivatives.com

I guess I can answer your last question, about corporate culture. At the larger IT firms IBM/AMD/INTEL etc you know right away what your career path is. For example, after 2-3 years in, and maybe 10-15 years down the line you "know" you will have a certain title.

Sales & Trading, Accounting, and Finance can be a little different. Entirely performance related, and very "thin" or lean. Competition at its best.
 

Andy Nguyen

Member
I wonder if there is a definite answer to the first question.
I guess not. Most people don't even know what Financial Engineering is 10 years ago. I didn't even know anything about FE a year ago.
It's a rapidly evolving field which will become harder and harder to get in. It's not mainstream major like CS years before the internet boom.
When you see PhD competing with BS, MS for a seat in a MFE program, you know the competition is tough.

So 10 years from now, the pool of applicants will comprise of highly tech savvy, mathematical well rounded, finance pro crowd. The finance part is not changing much but FE is getting way too technical and mathematical involved.
 

Yuriy

MFE Alum
I can take a wild guess. Programs in pure Finance will disappear, or at least will require heavy use of Math and CS. So Financial Engineering will become something people will hear/use/do on a daily basis, it will become a part of our lives :)
 

Erica

Member
FE in 10 years..

1. portfolio managers: the creation of a larger number of non-correlated asset classes (see #3 and #4)

2. market makers/traders: expanded provable definitions of what constitutes theoretical edge as well as improved multi-platform execution capabilities. for illiquid markets, a means to discover prices where true liquidity lies.

3. accounting/corporate finance: the further monetization of balance sheets, for example the creation of a truly liquid market for intangibles, etc.

4. public sector financing/privatization: this is a fairly broad concept, but my general sense is that in the near future brokers will be engaged in many of the transactions that have traditionally been performed by insurance companies(and perhaps vice-versa). i expect creative solutions to public policy issues to be a natural extension of this convergence, for example universal health care, pools of investors assuming responsibility of public assets, etc.

of course, all of the above mentions ideas/concepts already exist to a certain extent. the challange, as i see it, is to apply mathematics in novel ways to create usable and widely accepted solutions.

to me, finding these solutions sounds like a fascinating (and in some cases useful) way to spend one's working life.
 

Yuriy

MFE Alum
What about automating Tax preparation? :) Its not FE, but I would like to see it done by a click of a mouse :)
 

alain

Older and Wiser
What about automating Tax preparation? :) Its not FE, but I would like to see it done by a click of a mouse :)
This will never happen. Actually, if you are a very good Tax accountant, you might be even better than a Finanacial Engineer... you will be an "Accounting Engineer" :D
 

malexgreen

New Member
Alot of these type of questions are answered at globalderivatives.com

I guess I can answer your last question, about corporate culture. At the larger IT firms IBM/AMD/INTEL etc you know right away what your career path is. For example, after 2-3 years in, and maybe 10-15 years down the line you "know" you will have a certain title.

Sales & Trading, Accounting, and Finance can be a little different. Entirely performance related, and very "thin" or lean. Competition at its best.
So how is performance measured in industry for FE's? Is it an objective measure like $$$'s or subjective, like how "big" someone's piece of C/C++/java/perl code is verses the other person or how many "problems" a person fixed verses another person?
 
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