If you’re interested in becoming a quantitative analyst within the finance field then there are a broad range of skills that you’re going to need, as well as having a strong educational background in both maths and statistical analysis.
You’ll need to have at least a master’s degree in an area such as quantitative finance, mathematical finance, computational finance, and financial engineering.
But if you don’t have one of those, it’s not a lost cause. Degrees in areas such as physics and maths that concentrate on high-level mathematical modelling and quantitative techniques are also a good route into the field.
A Ph.D. isn’t needed, but it may be in your favour depending on what position you’re going for or what the employer desires. It helps as part of your Ph.D. would be working independently on a complex research project, which is a useful skill to have due to the large amount of independent work on complex projects that is a key part of being a quant.
There are also professional qualifications that are specifically for those wanting to move into quantitative finance, with the main one being the Certificate in Quantitative Finance (CQF).
The CQF is targeted towards professionals from a wide range of positions and academic backgrounds. So, as well as finance, you’ll be able to apply from economic, business, engineering and science backgrounds. Delivered part-time and online, it’s promoted as a cost-effective way to learn practical proficiency in quant finance and machine learning, as well as being a globally recognised professional qualification. It consists of 6 modules, advanced electives, workshops, labs and a final project that and can be completed as one six-month program or divided into two three-month levels.
What kind of skills does a quantitative analyst need?
These days, a quant needs a broad range of skills to do their job and remain ahead in what can be a competitive field. Technical skills cover a broad swathe of areas, while certain business skills are also must-haves.
For starters, you’ll obviously need financial skills and knowledge of trading concepts that include the following:
- Financial modelling
- Portfolio theory
- Derivatives, such as equity, interest rate and exotics
- Knowledge of credit-risk products
- Systematic and discretionary trading practices
You’ll also need a range of mathematical skills that include:
- Differential, integral and stochastic calculus
- Probability and statistics
- Numerical linear algebra and differential equations
- Game theory
Finally, you’ll also need computing and programming skills that include:
- Modelling big data
- Machine learning (which is becoming more and more important as AI gets better)
- Data mining
- Programming languages including C++, Python, SQL, MATLAB, SAS, S-PLUS, R, C#, and JAVA (while you don’t need to know all of these, strong understanding of at least one programming language is a must. The more programming languages you do understand, the more likely you’ll get the job).
- Applications & developer tools such as Excel, VBA and .NET
The business skills you will need, as well as being able to act and think like a trader, are varied. You need to be able to conduct analytical problem solving and work under pressure as the financial industry is a high-stress environment. You should also be able to carry out independent research and work without supervision, as well as having excellent communication skills as you’ll be creating ideas that you need to effectively communicate with managers and colleagues to ensure they can effectively use it in their work. You also need to have excellent concentration as you’ll be spending most of your time looking at vast quantities of data and code.
The financial world is a world of lightning-fast change, so you’ll need to be able to quickly adapt and come up with new, innovative solutions.
Becoming a quant is hard work and not for the faint-hearted, but if you’re willing to put in the time then you’ll end up with an extremely rewarding career. Good luck!