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The effects of the 2008 financial crisis continue to reverberate around the world’s financial centres. In New York, regulators warn of further fines for the rigging of foreign exchange markets following a $5.6bn settlement this May and individuals still face court for alleged personal misdemeanours.
Financial training has had to adapt to this world, not least by greater emphasis on risk management and updating its regulations curriculum in line with rule changes. Courses on ethics have gained a new degree of importance.
In a variety of ways, financial training is moving on from the crisis. Several business schools report sharp rises in the number of applicants as job opportunities increase in even the hardest hit locations, such as London.
Record numbers applied this year to the Master of Finance programme at Frankfurt School of Finance and Management. Applications to Frankfurt have increased by 25 per cent over the past two years, driven by a rise in applicants from outside Germany. This year’s intake of 143 comes from 27 countries. Overseas students account for half the total, up from 37 per cent last year.
Frankfurt came through the crisis better than other banking capitals, helped by the high proportion of jobs in market regulation, says Julia Knobbe, the school’s programme director.
“Ethics, sustainability and responsibility are all topics which have come into focus since the 2008 banking crisis,” she adds. Investment banking, M&A and trading, however, remain the most popular areas for employment among students, alongside roles in management consultancies.
Differences do exist in the specific jobs students now look to pursue after completing their studies. François Quittard-Pinon, who oversees the quantitative finance MSc at EM Lyon in France, says applications for his course have risen slightly since 2008, but opportunities for his graduates to find trading jobs have diminished. Many students want to work in compliance, he adds.
“The need for regulation and risk control has dramatically increased after the 2008 banking crisis,” he says. “Recently one of our students obtained a permanent position at Banque de France, which is currently investing significantly in its risk department.”
The job skills required, Prof Quittard-Pinon adds, are a good knowledge of mathematical tools and IT techniques and a keen grasp of global financial markets. “Many of our students come to improve these skills and those with working experience are convinced of this necessity.”
Jacques Olivier, who runs the MiF programme and is joint-programme director of the MBA-MSc international finance dual degree at HEC Paris, notes that while demand post-2008 for sales and trading roles has fallen, interest in M&A roles is on the rise. Banking regulations — leading to no more proprietary trading, for instance — and technological developments such as trading platforms have cut trader numbers.
Rise in applicants to Frankfurt School of Finance in two years
Work experience is now highly prized by students. “It is becoming almost impossible to break into investment banking without first undertaking a summer internship,” Prof Olivier says.
What has not changed is the question of whether to take time off from the workplace to study for a masters qualification at business school or study for the chartered financial analyst (CFA) exams. They require a lot of additional work but can be undertaken while working full time.
A fund manager could complete the CFA exams, remain at work and avoid paying more than £40,000 to undertake a masters course, admits Marwa Hammam, executive director of the Master of Finance programme at Cambridge’s Judge Business School.
Financial training remains a market that lacks depth, she says, but defends the masters qualifications offered by business schools like Judge, not least because their curricula are generally broad enough to enable students to move into a wide range of financial industry jobs. They may even help them launch their own business.
“The CFA is probably still the professional qualification of choice in the world of finance but is largely geared for buyside jobs,” she notes. Applications to Judge were up 38 per cent this year to the highest level since 2009-10.
Students who embark on Judge’s programme are typically in their late 20s with some five years of finance work experience.
They are interested in broadening their understanding of applied finance, says Ms Hammam, which is something she suggests is not typically provided in other (more theoretical) MiF qualifications.
“There’s definitely more focus on drawing upon the learnings from financial history, regulatory change in the industry and ethics,” she adds.
“We find that the students are really interested in the insights practitioners share with them on the crisis and the paradigm shift across various subsectors of the industry.”
The number of nationalities in Judge’s MFin intake last year
Judge benefits from its proximity to London’s financial services hub. Although banks in the UK capital, like New York, culled thousands of jobs in the wake of the 2008 crisis, hiring has rebounded in recent years, making top schools in and around these financial centres more attractive to international students.
With the jobs market stabilising, many people are looking to financial training to enable them to switch roles or move to another type of company, Ms Hammam comments. “When people see former students managing to get great jobs they think then maybe the cost of this course is a good investment.”
Moving to study at a school close to the world’s financial centres can help those aspiring to work in financial services, she argues, citing the case of four MiF students from India on last year’s programme who all secured jobs in London after graduating. There were 28 nationalities represented in the 45 students that started the MiF at Judge last year and 17 of them had moved to the UK to study.
The internationalisation of financial training alumni is a trend many business schools are noticing. This reflects the globalised nature of the industry students are looking to work in.
The shocks of the financial crisis were unable to shake this trend. Those schools that have embraced the movement of ambitious individuals to the locations with buoyant banking sectors appear to be reaping the rewards of higher student numbers.