Careers in Finance for Tech Graduates

welcome everyone for this session careers in finance for Tech graduates I am pank Sharma from CF Institute and today we have two industry stalwarts who themselves have experienced this firsthand rash from Morning Star suain sustainalytics he is global head of data and parijat who is fund manager at 361 Asset Management welcome to both of you glad you are here uh we'll start with this that uh you are at the Forefront of this change uh with increase use of data analytics rapid developments in Ai digitalization and responsible investing do you think there is massive transformation happening in finance industry and how do you think that engineering graduates bring value to the industry and become more useful uh what's your view on this um so you use the word massive transformation right and when I think of the mega Trends the structural trends that uh I see in the industry everything that you mentioned AI ML and things such as Big Data uh hyper personalization using technology you know for wealth management and uh you know yeah and uh and such thing and fintech digital banking all of it is uh driven by technology and this is you know these all of these spaces are where folks who are from stem background uh Engineers they can play and they are actually playing you know already a big role in uh in ensuring that uh those Transformations are included and are are a big part of the industry today uh par like uh the conversation we were having uh before the session begin uh it's a very interesting Journey for you and uh uh because you think that uh there is a massive opportunity for engineers uh in the finance space and uh how do you think that they can do and what they can learn in addition to become more useful and become more uh aware of the opportunities which Finance offers sure um first of all thanks for having me uh panage see you said that there's a big transformation that is taking place in the industry uh I would say well yes and no there are certain aspects of the business that are changing very very quickly uh AIML being big areas on the other hand there are huge areas of uh Finance let's say um uh you know operations management and just the whole Plumbing of the entire system is still surprisingly backward in some ways has not really caught up on the technology uh that can be used so the contribution that Engineers can make on both sides is tremendous right one is to bring the latest technology and apply it to investing but also to just bring what a lot of other Industries already have in terms of basic engineering capability uh and deploying that in the industry now how does how does a young engineer do that is look it's one thing to go to college and learn how to code but whenever you want to bring it and apply it to an industry you need to understand how the industry also works right if you just try uh without understanding the context of the industry where you're trying to uh make things work the solutions you build typically tend to be fragile uh so for the young people who want to get into this industry it's important that they keep that in mind and they try to learn uh the ins and outs of the industry itself as well while making sure that they are solid in their engineering background right so when you bring both of those together is when uh you know there's the best outcome from a learning and an output point of view I think that's a great point because uh uh your career Journey uh has been such that if you let's say have to look at just one take away uh some of the important qualities broad guiding principles uh which helped you make this transition from engineering to finance uh what would you highlight and what would you tell uh the people or the engineers aspiring a career in finance and a successful career in finance sure so uh one thing my dad always taught me is that you know there'll be Specialists you can learn one skill and be very good at it but there are very few people who can bring two different fields together right that's always a rare sort of space uh so I have always sort of kept my curiosity alive for things even outside of my core domain while making sure of course that I spent uh like most of my energy doing what I was doing when I was doing engineering I like spent a lot of energy doing that but just having an open mind and curiosity for other things and actually Finance is probably one of the most uh diverse fields in some ways right especially if you're on the investing side what you do touches upon or is touched upon by everything in the world right so just being curious and constantly absorbing uh things around you I think that's been like the most important thing that helped me make that transition right after engineering I I undertook the CFA Charter program simply just to get uh people to accept the fact that an engineer might know something about Finance right uh but the degree apart also just always being involved talking to people learning from them about other aspects outside of engineering is sort of what's mattered yeah and I think that's great because because uh you you yourself have been in this space uh for very long and you are now global head of data at sustainalytics which is a huge responsibility and the way parat answered that uh he had a few points and the learnings which he had which were very helpful in making that transition from engineering to finance what is that you have to say what is that some qualities which you think are very useful for people to have and look at sure so I'll take it back to the basics so I think when we discussing this somewhere the implicit assumption is that we know or we understand what Finance is but do we really so let me I will I will site three examples and these are you know from my own career uh so this is you know this is the most recent startat and this is for us where we have about $27 trillion in ETFs and mutual funds and very recently the index based or passive strategies they have overtaken uh the active strategies so more than half of the money in us is currently managed using index fa index based or systematic strategies um so that's one second is private Equity uh which includes you know leverage buyout and venture capital and it has you know it has impacted our life so much right it's uh we all use products and services created by these startups and many of these companies are no more startups you know they are you know they are multibillion organizations now it used to be a small corner of the entire Financial Services market and by one estimate you know now this is from McKenzie it's you know it's over1 trillion in you know in assets under management and finally uh coming to sustainability or ESG so once again one report says that about 30 trillion dollar of assets globally are managed using ESG uh overlay of some sorts so the reason I'm you know mentioning those is when you think about Finance as an engineer or as an stem graduate I'm not sure you're thinking about indexing you're thinking about private markets or you're thinking about sustainability so one of the key thing that I would like anybody uh to consider when they are when they are you know when they are thinking about having a career in finances what is finance and to have a very open mind about it to not limit Finance to let's say perhaps Investment Banking and equity research and portfolio management so I'll say that you know yeah uh you start there uh because the jobs that I have done uh the career that I had I could not you know I don't think you know let's if you ask me when I started my journey to move from you know from being an engineer graduate to finance I don't think you know I don't think I realize that that you know that this is what is happening so in in sports they say you should be skating where the puck is so understanding what the trends are and then taking that into account as you are making those decision is also one thing I'll say you should you should take into account because I think uh there an interesting point because uh uh let's face it uh the way priorities are getting realigned both at individual level and at organization level the pace has become very very fast so let's say a graduate who is probably uh entering the career next year or this year or like just one year the priorities could be very very different so what are some of the skills you think are useful irrespective of what priorities you are assigning for yourself and what you're looking at the the important milestone for yourself but engineers and the skills you think that they should have to make a very successful career in finance what is what is your sense on that sure um so if I'll go first so I think so first you know I would like to double down on what parijat said about having the Curiosity having that growth mindset and the mindset of uh be learning always I I think you know so as I said uh you said it's a the world is changing fast technology is changing fast Financial finances you know is not uh is also you know incorporating all of those changes so you need to have uh a sort of intellectual openness about those changes and to understand that a career is not going to be a linear one there are going to be multiple components to it and you will have perhaps multiple careers you know built into into your life uh you know into your professional life now coming to you know now coming to you you know like you know answering your question directly the way I think about it is Knowledge and Skills so knowledge is you know when you know uh like and then Finance if you're thinking about an engineer engineering graduate and thinking about uh career in finance you need a body of knowledge so that you speak the language you understand you know how that world works so I'll say you know so that is very important I guess you know and that's where uh and that's where you know something like n CFA curriculum or the other uh such programs you know come into play and then comes the skills you use the word skills but what's the difference between skills and knowledge to me skills are knowledge applied when we apply that knowledge in real practical setting then we get those skills and uh yeah so I'll say that you know you start with the knowledge and then you find opportun Opportunities to convert it into skills and uh and that's how you know that's how it goes and I'll say you know those are the things uh I would urge you to have or I would look for uh an earlier an early career Finance uh uh professional par the same question is to you as well like when an engineer looks at a career in finance of course it could be possible that it's not either or but uh whe whether the people should focus on coding they should look at their spoken English their communication or they should look at the fundamentals of investing what do you think like in terms of both hard and soft skills the engineers can acquire and can work and make some improvements there so that they become much more ready for a career in finance so it's a tricky one and obvious answer is you need to learn everything that's a good one but but here's the thing so uh it's hard obviously to be good at everything you need to lean into some of the strongest capabilities that you have you cannot be zero on communication right if you're a great engineer but you cannot communicate you're not going to make it in corporate life it's a simple that your projects won't get a go ahead for example so that's important uh but you need to lean into uh some skills you need to choose the ones that will apply the most now the problem is the following um so 50 years ago let's say when somebody you know finished school or college they learned a set of skills and you could pretty much expect to retire based on what you learned now as you said things are changing so rapidly that um 10 years down the line Your Role may not even exist right so you'll have to learn new things or the programming language that you've learned so you know right now python is the rage even I code in Python pretty much everything I do is in Python today but you know you have to think of even those even knowledge or skills have to be thought of at two levels one is like right now if I'm going to code what language do I learn but then also do I have the general capability to program do I have the mindset of programming itself right similarly investing I don't think the fun fundamental of what a security is worth is going to change it's the discounted present value of cash flows but the type of Securities that are going to exist the kind of financial structures that are going to exist will change so constantly that you need to be able to you know adapt to that so there is it's this two-level thing right that you need current knowledge but also that basic framework that can adapt with time over the next 40 50 years so you can't say I'm going I'm going to learn data sciences and I'm going to be set you know who knows maybe maybe with all the llms uh today right 90% of even data analytics becomes like a language thing your manager will just ask the question and the program will answer what are you going to do right so that ability to adapt and stay ahead of the curve do you need to learn prompt engineering at some point of time maybe so I think that's what's most important yeah at the pace of change right and again in continuation to that uh we have the audience uh and a lot of them uh would want to know a little bit more about this so let's say if somebody is pursuing engineering or early in that career and they want to switch to finance they want to look at Finance as a career option uh and making that switch how how do they first of all assess that what they're good at and once they decide that okay this is something they're good at or bad at how do they work on that how do do they take that step forward to make a career in finance and making more importantly the switch from engineering to finance in in your view what what would be the I would not call it advice but what would you probably suggest to these people because everybody would have their own different paths to arrive the same destination maybe sure so again tough one uh but first things first I think the nomenclature now is important that we don't say that you switch from engineering to finance right it's no longer that engineering is is like is like knowing a language right so you don't say I I was an English major and I'm now switching to finance or something right you it's a skill you learned you're going to apply it you could apply it to oil and gas you can apply it to finance so you're not switching from engineering you are finding areas of application of your skills in the finance industry first of all that's how you should look at it now uh within Finance what you should be doing whether you should try and look for a data Sciences job or do you like Building Systems that's also a thing thing that you could actually probably figure out while you're doing engineering itself other than that you try do internships right and believe me I know it's incredibly hard to land an internship in a financial services firm but that's I think also because partly um as students or even as grown-ups frankly we tend to think of Finance as I want to be a fund manager that's right we always think of these front Des roles if we have that that's fine everything else is unglamorous unsexy and I don't want to do that as a techie by the way it may make sense because uh there are great opportunities in so-called core Tech itself as well but the opportunities uh in in so-called mid office or back office and Technology Building are also phenomenal so just keeping your eye out for that I think those are easier places to get into the industry and believe me they long careers 30 years 40 years things change you can move you get into the industry you learn the ropes and not worry too much about whether I'm getting a fund management role or a research role or a system building role just get in get your hands dirty is probably how you sort of start if I I would like to add to that so so's answer was you know was perfect but uh to bring a flavor to it I think many of times the uh stem graduates they tend to think uh about you know skills and knowledge by comparing themselves to non- stem graduates so they will think that okay you know let's say once again you know if you'll go by like you know the general understanding uh somebody who is an engineer you know yeah maybe you expect them to good at let's say you know at coding programming uh logical thinking and you know scientific way of analyzing a situation concept problem so yeah so there is that and then you will also believe you'll also think that oh I don't know how to analyze a you know how to read a balance sheet what is a financial statement analysis and you know accounting and so on so forth so I think so most of the time the conversation is kind of you know is about these two things I think there is is the third part to it which is this the knowledge the skills that you will get to you you'll be exposed to if you let you know if you'll have uh the career in the field for example when I was in indexing uh and we used to build systematic investment strategies it is not just it is not just programming accounting Finance or computer science but it's also statistics it's also you know yeah it's also data analytics or the ability to uh to create the data correctly and you know and to process and manipulate it even behavioral sence so many of times we'll come across such phenomena so there is something called let's say momentum in investing so which you know which says that stocks which goes up keeps on you know going up for you know for some time now what does why does that happen right so we'll say that oh either it's a risk-based explanation uh but we don't find risk-based explanation for every you know such factor or anomaly then we'll say you know maybe it's it's there's a behavioral component to it so which means in this case you know if I can maybe you know take one more minute uh when a new news comes in then let's say you know the stock was supposed to react to 100% but generally they don't for whatever reason so that's why you see you know what they call Initial under reaction and then eventual it's you know overreaction so the fact that you do a job and you get to think about like you know problems in like you know in such holistic way I yeah know I think that that that's one of the thing I also wanted to kind of you know come out today so it's not only about what you know and what you don't know like you know stem versus non- stem there is also a whole set of uh body of knowledge to use the word which I think P use you know it's so multidisciplinary and I think you know and the intellectual challenge you know that comes with it I think uh it's a great conversation and I'm enjoying every bit of it uh a reminder to audience that if they have any question to either parijat or vikas or anything in general they want to know or understand please send your questions across your comments are most welcome uh we keep revisiting this multidisciplinary versus a very focused kind of approach so journalist versus specialist is a classic debate and that's something which like there are different opinions about it but whatever uh both of you have spoken so far the understanding which I am developing and getting is that it's very important to look at something over and above what your core area is so like t-shaped dis skills are being talked about a lot that you need to be good at something very good at it but at least you need to have some working knowledge of many other disciplines and many other areas so is that what you're trying to say or is that something which is very different in terms of what I understood and what you were trying to convey well I personally am biased towards the generalist school of thought because I enjoy a large variety of subjects Etc um but but there are number of books and um I can't recall exactly which one that actually says that let's say there are eight skills that you might have uh most teachers and most people tend to think that you know figure out your weaknesses and strengthen them right so you get everything at a level part that's not necessarily the um going to give you the optimal outcome let's just say right so if you on the other hand you you have those Basics but then you lean into uh some skills right you become exceptional uh in certain things for example let's just say uh high frequency trading is one very small niche of uh invest or trading or investing Etc right there are people within that industry who are absolute Specialists on the architecture of a CPU right and they can optimize code to work on a very specific CPU you know for them does it matter that they don't understand what Roe means this very likely doesn't right but they're extremely sought after so developing really deep skills in a few areas also works very well but then be advised that that's usually what more people tend to do right so then the bar is that much higher right it's sort of easier to be a generalist no more things because there's lesser competition in some ways but when you're specializing you have to be really really good uh you spend your energy doing good and then then the outcomes can be great even even within a specialized uh sort of field M your take on this yeah so and you know some of what I'm saying it's you know it's inspired from you know from this book called range by David Epstein um so we there are you know let's say there are two kinds of environment if I can you know stable and unstable or you know we can use like you know any other terminology but the point is uh let's say when we play play chess you know the board is always exactly the same the rules are well defined so you practice and you practice and you become let's you know you're very good at chess so but you're operating still you know in a very stable environment whereas our careers are not like that right it's a so as I said and I think in our thankfully yeah thankfully if you are if you are confined to those 64 boxes you can imagine how boring it would get yeah so which means and as I think you know yeah as you would have heard so many times and as it's been you know as it's been our experience in let's you know about what two decades or more of you know of professional experience till now uh the job that we are doing today it not it did not necessarily existed when we started our career so in finance we talk about diversification right don't put all your eggs in one basket and I don't think you know it's it's a bad analogy uh for you know for building your careers too so I once again you know I'll say that you know as pad said you know I lean towards you know journalist uh uh model or mode of you know of operating and that doesn't mean flitting from one thing to another I think you know being a generalist means you build deep expertise in like you know few one or few areas but then you don't stick to it for the rest of your life you do you know that over and over again for the rest of your lives and the real dividend comes when you are able to bring in those multiple perspectives together and you know you are able to solve a problem which is you know yeah which otherwise would not have been possible because you know only you have you only you are able to bring that multi- disciplinary uh uh thinking and knowledge you know to bear I think that's uh of course there are a lot of technical aspects to it but there is a behavioral aspect as well uh and when we see that uh of course this reminds me of that uh movie three idiots that uh the character which was supposed to get married to Karina kapur's character in that movie and Amir Khan's character tells that guy that bank May engineering means like if you want to work in a bank or in a finance career in general why did you go for engineering even I don't think it's it it cannot be farther from truth because as you both are explaining that finance and Engineering in many cases the boundaries are not as sharply defined as they must have been maybe 20 years back 30 years back so you do you think that that's something which is happening in terms of all these hiring Trends all these new developments in finance where a lot of emphasis and overlay of Technology we are seeing today absolutely I mean um I think on the one hand we hear a lot of tech or Tech graduates saying they want jobs in finance but I'm pretty sure and vikas will agree with me that it's incredibly hard to find find Engineers we are looking we believe me in every function people are looking for uh people from engineering background to be honest very specifically uh people who can code program uh and there just don't seem to be enough of them right uh of course it's not just pure engineering like I explained you need to have some sort of Finance background so that otherwise you know it's impossible to bridge the gap between an engineer who knows nothing about Finance just getting the teams to talk to each other is incredibly hard uh but there is incredible demand across functions I think and across verticals of the industry as well just people who can code there's there's great demand because uh you think that that's something which is important in terms of like not having a very closed kind of mindset about anything when it comes to learning because that's something which probably we are uh talking about that Engineers need to have something which is a slightly more open mindset or like you think that we are reading it a bit uh differently no and I think it's not specific to Engineers I think you know maybe it's a I think it's a general good life advice and uh to have you know what they call growth mindset which is you know which is the belief that our abilities are not innate uh it's not only about Talent you know Talent determines where we start in our life but it is you know it is our perseverance it is our skills and and you know everything else that we do we control you know that determines where we end so so I'll say yes having you know that grow growth mindset and as I said you know even kind of you know if I can you know uh hit back on you know on the same idea so what is so what is what do you mean when you say Finance so do you have an open mind about that so to pad's point do you only want do you only think that you know Finance means uh you know a good Finance job means you know let's say being a portfolio manager then I think you know I think you have curtailed your options by you know by a degree of maybe 100 there so having that openness uh to to learn what actually finances and where technology and finance you know they are interacting in a way which is making your skills more and more critical and indispensible I think you know that is also that is also uh something you know I would urge you to do I have lot many questions uh with myself but uh I will not allow you that to hamper the interaction between the audience and the guests we have so we have a question from anud uh and uh is it's a very specific question in terms of the curriculum and in terms of the course so what he's saying that the current curriculum of CFA or maybe a general course uh is the is it capturing the changing Dynamic of dynamics of Finance is it something which is happening on a very Dynamic and regular basis or are you think that this is something which is a very like 10year old curriculum not really aligned with the reality in the market today what's what's your hands on that so first of all you know La uh yes parts of the curriculum are maybe 10 years old but you know Finance is 100 years old and like I said some things about Finance don't change right Double Entry bookkeeping accounts they don't change it's going to be the same right it's not like there you don't need to change the whole curriculum all the time uh on the other hand I understand that about couple of years ago there was a major change in the way uh you know the curriculum is run there is now the compulsory modules on data analytics and programming Etc there's a specialization uh system that is coming up uh in the third uh in the level three uh thing so the course has been I think a fair balance of adaptation to how things are evolving but if you expect things you know the whole thing to change it's not because the the core of Finance the core of of the industry is not changing that quickly either right so I think it's it's been a pretty decent balance vikash uh this question is uh from Daval he's a computer science engineer and he has cleared his CFA level to and he wants to get into private equity and uh that that's a great career and what do you think uh could be the technical skills uh he should possess to break into private equity and make a career in it okay so I think there are different parts once again you know when we use the term private Equity it's not a mon it there are various aspects to it uh one is you know is the deal making part of it right uh and that is where you identify uh the targets uh you you know you build uh you build your understanding of what the right price could be and then you find the right way to finance that you know that particular deal the right capital structure and you know and so on so forth so that's one and uh of course you know for that you need to have apart from knowing Finance apart from like you know having good sense of uh how to you know how capital structure works and how acquisition financing works and so on so forth uh you also have to have an understanding of that industry so it's not you know yeah so let's say so most most Professionals in in private Equity they will have deep expertise in a given industry so you know so they will understand let's say you know it could be a utilities or it could be a manufacturing firm or you know let's say biotechnology so I'll say that you know some of it comes from you know some of it comes from that and uh but yeah what remains is you need to know your Finance the basics of Finance at the very least to have you know let's say to have a seat at the table and if I may add there is a whole different part to it which is not necessarily visible to you know let's say to an average uh uh to an average uh um let's say you know Observer outside Observer uh I had the opportunity to uh to work uh for a company called pitchbook Data you know it was a company that morning star Acquired and it's a you know it provides data and analytics and services to those who are you know to the entire ecosystem of private Equity so be it asset manager asset owners Consultants you know and accounting firms law firms all of them they need data because that space by definition is opaque uh that space by definition is illiquid so there isn't a lot of information available so if you can find a way to collect that information and then structure it in a way that becomes immediately useful then you know then that itself is U byas count about $600 million business in Top Line for you know for pbook data which is a Morning Star subsidiary so so I think you know it goes back to the point so when you're thinking private Equity what do you have in mind is it you know just one or two roles that you know that you understand from a distance or you are you are you ready to are you open to expand your interpretation of that field and understand what all is on offer I think that's a that's a huge number I think uh it's it's a it's a great advice and uh uh thank you so much vikash for your help and advice to d uh this question is coming from aneli uh and uh farat probably I'll I'll uh request you to take this up uh she is a CFA level two candidate uh and uh her question is that what are the prerequisites of learning python SQL RC and and maybe she she may have a background either uh which is non-engineering or maybe a background which is uh uh before uh graduation but what is that you because you you have been a master quer yourself so what do you tell her uh to do to learn these languages and Learn Python learn SQL Etc so um you know I've said this about not just programming to be honest people ask the same question about investing how do I learn investing right and I've always answered that the best way to learn Investing For example is open a demat account get your dad to give you some money and you start buying shares right I would say the same thing about programming in Python uh good thing today is a huge Community there are websites like kaggle uh lots of resources but instead of studying Theory right and just reading a book more important thing is anything that you do in your day job or or even if you're still a student then you know for your work try and write programs that help you do your work right so whether it is reading an Excel file or whatever and just start writing code make the mistakes go Google maybe use chat GPT to help you out start writing code is the best way to learn how to how to thing there are no other prerequisites you need to be clear-headed you need to be logical thinking and you need to actually write code that's how you learn that's great thanks farat I'm cherry picking here I'm directing the questions depending on their uh content and the relevance which we are seeing today in terms of the expertise which our guests have so vikash uh sad has a question uh how can someone who is working in a data engineering field and simultaneously pursuing CFA Charter can apply the learnings which are acquired with CFA in Practical life and assuming they can't afford to go for internship for whatever reason so what do you tell Prasad on his questions on this data engineer uh would you like to take that yeah uh well actually you should but I I'll take a stab at it so uh I'm safe here either bash or I don't need to answer that see in terms of learning one thing that I would do today if I were a data engineer I want to learn how how it would apply to finance Etc is just pick up some tutorial on um building strategies trading strategies for example right that can use uh and and there's lots of data available publicly just learn to build the pipelines around that and and build trading strategies and see how that goes and if you get something to be honest uh if you can get even something that is semi functional that looks interesting you could you could use that to leverage yourself into a job uh frankly there are so many places that are looking for people who can code who taking the initiative to write uh and build things uh and since a data engineering background is superb for uh for doing something like that right because you the hardest bit typically is the data engineering most people don't know how to how to get the data and manage those files Etc is what is usually harder than the actual strategy just build a strategy build a system create a GitHub account upload it put that on your CV and circulate I think that's the best way to go about it yeah and if I may add U there are many applications in finance there are like you know on the investment side and and otherwise other applications where like data latency is you know it becomes a huge issue so as you you know so as you are already in the field of data engineering uh building a sense of what what what what requirements let's say you know a typical financial application uh would have uh in terms of like you know these technical specification such as latency ability to you know to retrieve data uh you know in maybe in a certain volume at a certain speed and yeah so it sounds you know it's a very technical part of the job and it's uh you know of the data engineering but uh finding its uh relevance to different uh financial needs I think that could be another way for you to think about the way forward uh that's great uh thanks vikas uh this is a question from Jordan and uh uh the question is that I come from a software engineering background using reactjs and Java and I have done a number of python projects in my free time and I would love some advice on how to use my knowledge to transfer across into the finance space anyone of you um again honestly it's it's my answer would be pretty much the same as what I said before you know build things um build pipelines and create a GitHub account first of all create a GitHub account start putting up your code there I think if if you are applying to a position with me for example and I and I get like a dozen rums and one of those rums has a GitHub account plus you're right on top of the pile right so that's that's just point number one any place that you're applying as a techie if you've got a GitHub account that's been live for a while you've been writing code and I can see how what you know the quality of code you're writing that itself gives you a huge leg up today um and and build systems uh reactjs Java are great uh for front end tools so you might want to look at bigger organizations that also have front end needs right so smaller teams typically don't care so much about uh front end development uh bigger organizations do need a lot of these systems so that's probably a good place to apply because sort of that also becomes more relevant it's not like you can't land a place uh job at a smaller place just becomes easier uh to show relevance uh to a team like that uh yeah it's um so I think you know it's an extension of what you said if you'll pick up any basic course in finance or let's you know any textbook or so you will find they will teach you about optimization right you know how to build how to use variance coari Matrix and you expected returns and then you know and then use all of it into use those inputs you and create an optimized output uh an optimized portfolio it's um it's like you know it's a the portfolio 101 or the Quant portfolio 101 so you can start like you know I'll say that you know you can start there uh you you learn what exactly needs to be done and then you turn that into a code and as P said you know put it up and build a portfolio of uh let's you know such executions and um yeah it's if you do that you will already be like you know I'll say you know you'll be in the top desile of of applicants that you know that we receive today so I think the the way I'm capturing it is that uh get your hands dirty yeah start working and don't wait in terms of having the right amount of information right amount of skills once you start doing it you will develop that skill and develop those uh qualities in in your resume in your yourself in your personal uh conduct everywhere yeah this is something I just want to I'm sorry I just want to add one thing here so imagine we were discussing about swimming today right and all you know you would have heard swimming experts say that you know get in the water I think you know so it's I guess you know maybe that sounds you know it's a far more intutive then you know then yeah than some of the other discussion but I guess you know that's what you uh so we talked about Knowledge and Skills so and that's you know I think you know we saying that use your knowledge and then you know use it to turn it into skills and you it it doesn't have to be you are not always at the mercy of let's say you know of somebody giving you a job or internship if you have you know you can on your own start building start converting that knowledge into skills and and we value that the industry values that a lot I think uh that's something which uh because this is a sentiment which is eing in a lot of questions and whatever we discussed so far uh both of you who our CFA Charter holders and of course it's bir's most widely recognized uh and respected investment designation with more than 200,000 Charter holders across the world uh but when we look at your specific cases uh in in your situation did it create more opportunities or do you think it made you better prepared for the roles which you are doing or a bit of both or a mix of everything like what what do you think par how did CFA Charter holder uh like being a CFA Charter holder the learning the preparation for the exams and the skills how did it help you in some of these things so I think uh this might take a while uh so my so my story I I was I a computer science engineer and I started my career doing high frequency trading so technically Finance but honestly high frequency trading has very little to do with Finance per se uh except that you're trading financial securities uh so about 3 years into my career I decided I need to move out and I wanted to start a wealth management firm okay I said I'll build a great technology-driven financial services firm that was my plan but I was a computer science engineer and I was like who's ever going to take me seriously if if I'm going to say I'll manage money for you but hey I'm a computer science engineer so that's the reason I decided to take up the CFA program right just to make sure I have and I didn't want to leave industry for two years and go to an MBA frankly I wanted to be able to continue to do my work and get a degree that made it legitim made me a legitimate you know Financial Services guy that's how I looked at it when I started what ended up happening though was that uh so I volunteered I was based in Delhi I took the program I wrote level one two and I started volunteering it was a very small setup there were very few people in Delhi but I started volunteering I said I want to help out I got in touch with the leadership and I became friends with the people there very senior people and uh you know that completely changed my perspective so of course I learned a lot I knew nothing about accounting uh and I studied very carefully right so there are people who study notes from others Etc I honestly I read all the textbooks uh because I was scared that I didn't know anything so I read the textbooks I think I'm fairly good at accounting and most people are surprised that as an engineer I'm good at it so that's important but the biggest value came from the fact that I met all of these great people uh who were stalwarts of the industry I went to these events I learned so much more and got the perspective right that there is more to finance than just being a fund manager there's just so much more going on and so you and it gives you confidence at some level uh it helps you bring uh build networks so like the actual core skill and the people you get to know it sort of all came together I still did not get into the industry frankly until 2019 officially because after that I started I started the company didn't really go anywhere then I started another technology financial data services company technically not Finance 2019 is when I came full-time into Finance at that point my boss uh Mr ano mishari who hired me did it matter to him that I was a CFA Charter holder probably probably I've never asked him maybe it did so uh but in the interim like everything that happened right the people and the core skills the confidence that it gives you I think that's what's been important to me so par like you said that most of the people are surprised that you are so good at in good in accounting despite being an engineer uh that's expected because Engineers usually are good in everything except engineering most of them I object to that I'm a great coder it was in a lighter not I'm sorry for that because how did CF alter holder being a CF alter holder the skills the education the three levels how did all this help you and in opening more opportunity for yourself or maybe becoming better prepared for what you doing sure I don't think it's a coincidence that when I wanted to switch from uh data science SL so I was you know I was building credit risk quantitative credit risk model for a credit card company using AIML uh you know when I started my career and I don't think it's a coincidence that the next two roles in finance that I got so my first manager he was still pursuing CFA I had finished my CFA by then so it's a uh year 200 678 um and the second so the the two jobs that I got and of course you know that finally kind of you know made me entrenched in you know in this industry yeah it was you know so the first hiring manager was still pursuing his CFA and the second was and is a proud CFA Charter holder so yeah in terms of like you know yeah you talked about you know the big community of CFA Charter holders and I think yeah when you when you know when you meet somebody who has you know who has made some progress into Ward you know yeah uh the charter or you know has finished it you know as you know if you yourself you know are a charter holder you know you know what it means you understand how rigorous the course is how much and it's not only a matter of intellect it's also you know in some sense it's also you know test of your endurance the entire you know the entire Journey so I think I I believe that you know you do get uh you do get let's say you know a lot of credit for that apart from that it's um yeah you know once again you know going back to the knowledge uh bit of it uh you know the language you understand the concept so something like you know as simple as like efficient market hypothesis it's uh because that's what we used to you know so when when we were in indexing and we we are trying to build strategies you know that can beat the market a lot of the conversation will be you know start from efficient market hypothesis which is saying that why should it work right it's like you know because markets in general are you know they are supposed to be efficient so where is this like you know if the alpha or the excess return that we are seeing is it true where is it coming from so so I think you know exactly and I can kind of you know go on you know on and talk about like you know in various different aspects you know where the knowledge kind of you know seeps in but I'll say that you know it is uh at least you know for me it was IND indispensable I think uh parat made a very good point he said that like he went for CFA with a very different objective but when he started volunteering he started interacting with more such people he he got a very different perspective and that helped in learning new things that helped in making him probably better aware of whatever is happening in the field of finance and that's a very important Point like this is something which I believe both parat andash has been emphasizing that it's an idea which probably you have to implement and execute uh is a again like we go back to the uh questions which we are uh there are a lot of them but uh uh we are short of time and uh this is one last question uh and that's uh from mahmudul how can we use AI applications to reshape how things work in a finance department which software should beginners try to learn to Ace in their careers any advice uh from parat or vikas on this to M want to go first um okay so so there are a tough one as you can see um so so one area where you know where we have uh uh where we implemented a was to solve uh intricate portfolio uh construction uh challenges so what I'm trying to say is so like so when you're building a portfolio you're doing it you have an objective to it right you want to do something you want to gain a certain type of exposure or you know a certain return or certain risk return profile and uh and all of that is subject to various uh constraints uh and doing that you know it's an it's an exercise in uh in in in like in optimization and and and along you know over the years the solutions that have come uh from you know from the AI side that has helped us create portfolios which perhaps you know were not which were you know what you used to call you know let's say we used to get we will will get infeasible as you know solution as you know let's say if we are not able to if you're using the conventional optimization methods but you know but with AI many of those infeasible uh uh Solutions you know they have become feasible so yeah you want to add something to what vikas has said sure very different dimension uh so what vikas has talked about is mostly numerical stuff right and uh those techniques have been around um and and obviously people have been using them I think the fun transformation that has happened in the last one year is with llms right and the kind of things you can pull off with those for example analyzing annual reports Etc I mean black roog used to talk about analyzing uh annual reports automatically several years ago at least 2019 I definitely recall uh it is now possible for way more people to do it right a much smaller outfit can do it individuals can do it so if you are a programmer right I think the best thing you can start doing is uh you set up an open AI API account and start writing programs that can analyze let's say an earnings transcript and don't do the sentiment analysis like can you develop a good summary of what was set during an earnings call right can you do that it should it's it's frankly I've written though it's 50 lines of code if you know what you're doing uh and something very interesting can happen if you can learn how to do you know use these Technologies and it's not about this software or that software just trying to do that or what is known as retrieval augmented generation or rag uh that works in in most setups if you've got a bunch of documents in your team can you build a question answering system on top of that again fairly straightforward to do lots of tutorials on YouTube it's very cheap to do you need maybe a $20 budget to uh you know run that sort of thing you build that it's very exciting and obviously like the core Finance is still very numerical doing that of course that is an important skill if you want something fun uh you know you should do that thank you so much uh I think it has been a great conversation uh any closing remarks from uh you like any anything one or two takeaways which you think that you can probably share uh from either your career Journey or from the conversation we have had uh anything you want to share par um I think being curious uh being open-minded and being very action oriented right dive into writing code today don't read just keep reading and don't keep asking people how do I do this you know if you were if you said I want to be a nuclear scientist it would be very hard to do that in your home applying technology to finance you can do that like today right you don't need to ask anybody's permission so being action oriented being curious constantly learning I think that's one thing I would say to all um engineering graduates if you want to get into Finance just keep that in mind and keep an open mind about what like and sort of stealing some of the Thunder from vas I think just keep an open mind of what Finance means in the first place do that and it'll be great because anything from you is closing your marks um yeah it's a so finance and you know Finance you know when interacted with technology can be a very rewarding and very intellectually satisfying uh career option so I'll say that you know yeah keep keep searching keep looking keep talking keep learning and uh yeah and I am sure you know I hope you know you will find your answers and your path soon thank you so much for your time both vikash and parad but honestly like this has been uh one of the most interesting conversations I have had uh three takeaways for me as such one is that be action oriented don't wait keep doing things and start learning things by doing not not to be too too theoretical about everything second is be curious uh learn as much as you can and third don't think that finance and Technology are two different areas many of the times these boundaries are created in our own mind a lot of times we can apply the learnings from one to another from for example A lot of people are getting good in trade and personal finance because they have been an engineer but they learned Finance in in a very dedicated and disciplined manner uh thank you so much uh for joining us this conversation and a very warm thank you to parijat to vikas and moreover for all the audience which have joined us today for this conversation please share your comments with us please write to us we'll be happy to discuss more and we keep doing these sessions on and off and very regularly but please do write to us with your comments about your session thank you

2024-02-29 08:05

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