Job File: Financial Engineer

The financial engineer is a designer of mathematical and computer models designed to optimize financial investments in a stock exchange company or a company. He works to create measurement and investment tools to support the work of traders and investors. How to become a Financial Engineer? Find here the missions, necessary training, remuneration of this profession.

Financial Engineer

Mission of the profession: Financial engineer

The financial engineer can work in a stock exchange company, a bank, in investment funds or internally in traditional companies. Its missions, depending on the context, revolve around the following functions:
– In standby in a specific market, it identifies and analyses the evolution criteria in order to build mathematical instruments for measuring risks.
– He works on computers to build work systems to automatically analyze the losses and gains of stock market investments. He sometimes works in conjunction with traders. They, who invest directly in the trading room, are provided with valuation models for the various securities and investments.
– He creates financial products or standard solutions designed to maximize the profits of an investor or company.
– When working internally in a traditional company, he may be responsible for setting up complex financing files. He ensures the valuation of the company’s cash flow in original models and ensures the optimization of financial investments.

Becoming a Financial Engineer: Qualifications

The financial engineer must have a solid knowledge of applied mathematics. He is a scientist capable of producing complex reflection models adapted to the needs of his internal and external clients. He is also a professional in digital tool design. He is computer literate to be able to create extremely complex software and systems. The financial engineer is not only a mathematician or a computer scientist. He is also, according to his specialty, an expert in macro- and micro-economics. He must be able to discern and analyze the social, economic, stock market and political information that will influence investments. To build effective and coherent models, it must be able to know what will and will not have an impact on investments.
With a great work force and concentration, he is someone who knows how to resist pressure, work quickly and submit to the demands of an extremely demanding professional environment. Fluency in English is necessary in the international financial world.

Financial engineer: career / possibility of evolution:

The profession is accessible to juniors, often after a successful long-term internship in the profession or sector concerned, and the financial engineer can evolve towards various positions in finance and banking. He can work as a department manager in trading companies, or evolve into more traditional corporate roles as a financial manager.

Gross monthly salary of a beginner:

4000 €

Becoming a Financial Engineer: training required

To become a financial engineer, a minimum of 5 years of higher education is required in mathematics or IT with a specialization in finance. Specialized masters are offered in engineering, business or economics schools (Paris Dauphine for example).

Situation of the profession / context to become a Financial Engineer

Since the 2008 financial crisis, jobs have become scarcer and are open to very high levels of qualification. Competition is fierce in this elite sector that attracts candidates from the best universities in the world. There may be more international opportunities than in Belgium.

“Scientific profiles are eligible for all banking professions”

For Pierre Richard, a graduate of the Polytechnique and the Ecole nationale des ponts et chaussées (class of 1966), engineers have many career opportunities in finance.

You have an engineering background. How did you become a banker?
With humour, I could say “by chance”. But there is a very strong common thread in my journey. In my studies, I was motivated by questions of urban planning, urban development and living conditions. At Polytechnique, I took architecture courses, then I did the Ponts et Chaussées before taking a master’s degree in “urban design” in the United States.

Over time, my professional life has been oriented towards finance. As Director General of Local Authorities, I participated in the major reform of decentralization, which included essential financial aspects. And, in 1983, I was appointed Deputy Chief Executive Officer of Caisse des Dépôts, a public financial institution then undergoing renovation, to define new ways of financing decentralization. It is thanks to this position that I became a financial engineer. I then created Crédit local de France, which then opened up to international markets by becoming Dexia.

His career path

Life is like geology. We build layer by layer, we widen our field of vision. This led me to open up and, as an urban planner, to become the banker of local development. There is continuity with the sector Dexia is involved in: the living environment, community facilities, decentralization. And an operational support point, the bank.

What did your curriculum bring you?
By approaching the banking profession from the specific angle of public equipment financing, I had a fundamental asset. I understood the area I was going to finance. An engineer knows how to negotiate specifications or a call for tenders to build a bridge and a road. My contacts with local elected officials were simplified because they themselves have to solve very concrete problems and the engineers are field workers who like to deal with operational issues.

Isn’t the banking world a little abstract for an engineer?
It is true that when I was working for the new city of Cergy-Pontoise, I saw the city coming out of the ground. For an engineer, the bank can indeed appear to be a somewhat abstract world. I admire a lot the people who work in the financial markets, but they are in the complete virtual world. For my part, I kept a link with the concrete. When you are the first financier in the world of wind turbines, you can see the concrete role you play. This aspect is found in all project and infrastructure financing. When an engineer works on the financing of a pipeline from the Caspian Sea to Turkey, he has a lot of fun! That being said, banking is fascinating in the sense that it is the key to economic development. Without it, we could not finance most business projects, real estate…

Does this mean that engineers are confined to a few professions in finance?
Not at all. There have always been engineers in the bank, but they have long been specialized, especially in IT. They can now claim to work in all trades. Because banking has become an industry that requires very specialized skills. And the engineers will find their happiness there. With the highly sophisticated products developed by our establishments, scientific training becomes a tremendous asset. In addition, the current evolution of the economy towards ever more expertise is favourable to engineers. They have very diversified career opportunities in banking.

The bank of local authorities

Dexia was born in 1996 from the merger of two European institutions: Crédit communal de Belgique and Crédit local de France, created by the Caisse des dépôts et consignations. Specialising in the financing of local public services, the group is the world leader in this activity. It has also diversified into retail banking, particularly in Belgium and Luxembourg, and into asset and insurance management. At the end of 2006, it had 33,300 employees in 33 countries.

Are engineering courses adapted to these new careers?
What we learn in schools is not always appropriate. But banking institutions train young people. There is sometimes a small reservation with regard to engineers: we consider that they are too technical, that they have a sense of the product well made, but less that of the customer. They must learn to be more open to better understand the lawyers, financiers, salespeople they will meet in multidisciplinary teams. They need to go beyond their rigour and seriousness, which sometimes put them in specialist positions.

Can a young engineer aspire to become the head of a major bank?
Of course, at the end of a course where the engineer would have proven himself both internationally and in several areas of banking. Today, the choice of heads of large institutions is much more open. Starting from an initially nationalized sector, where the State designated the bosses, we have moved on to a largely privatized sector where the selection of directors is based solely on competence and experience, regardless of the person’s professional or administrative origin. But for an ambitious engineer, an additional education such as an MBA is an additional asset to reach the highest responsibilities.