Financial Engineering: Courses, Syllabus, Jobs, Colleges

The field of Financial Engineering is relatively new in India. Large financial banks and brokerage houses need to develop customized solutions and complex models to tackle severe client problems with the fast-changing global scenario and increasing competition.

Thus, it led to creation of a new discipline called Financial Engineering that opened the door of opportunities for students pursuing such courses.

Have you ever heard about financial engineering before? If not, this article will help you understand its meaning and importance in brief.

What is Financial Engineering

Financial engineering is a broad, multidisciplinary field of study and practice that, essentially, uses engineering approaches and methodologies to study and practice finance. It integrates and utilizes information from various fields, including economics, mathematics, computer science, and financial theory. It combines scientific theories from financial economics, mathematics, statistics, physics, and econometrics with methods and tools from engineering and computer science to solve the problems of investment finance.

Financial Engineering Courses

Financial Engineering course is offered at various levels. The following list entails various courses at numerous levels:

Financial Engineering Bachelor Courses

• Bachelor of Financial Engineering (Hons.)
• Dual-Degree in Financial Engineering
• B.Tech Financial Engineering

Financial Engineering Master Courses

• Master in Financial Engineering
• MBA in Financial Engineering
• MS Financial Engineering
• M.E/M.Tech Financial Engineering
• M.Sc in Financial Engineering
• M.Sc in Financial Engineering and Risk Management
• MA in Financial Engineering
• MF in Financial Engineering

 Financial Engineering Certification Courses

• Online Courses
• Risk Management Assurance
• Information System Auditor
• Certification In Quantitative Finance

Financial Engineering Ph.D. Courses

• Ph.D. in Financial Engineering

Bachelor of Financial Engineering (Hons.)

The three-and-a-half-year course prepares students comprehensively in IT, mathematics, finance, and financial modeling, essential to success in the finance tech industry. Students will gain an understanding of strategic technology in business finance and build financial acumen through the program. The course includes fundamental financial subjects like Principles of Finance, Investments, Financial Derivatives, and Mathematics for Finance. To produce graduates who are highly skilled and competitive, financial fundamentals are augmented with fintech-related courses. 

Dual-Degree in Financial Engineering 

A B.Tech (Hons) in any core engineering field and an M.Tech in Financial Engineering degree can be obtained through this program. Those pursuing this program will have to complete the M.Tech in Financial Engineering after three years of completing the B.Tech (Hons.) in core engineering. The fundamental goal of this program is to prepare students with strong background knowledge and skills in quantitative finance. Students graduate from the course to apply quantitative analysis to financial instruments and financial risk in careers related to financial instruments and financial risk. It focuses on four key subjects: mathematics, statistics, economics and econometrics models, computer science and information systems, finance concepts, risk management tools, and techniques applicable to financial products.

Master in Financial Engineering

A Master of Financial Engineering (MFE) prepares students for technical positions with banks, insurers, financial consulting services, and financial software firms. A balanced portfolio of equity, currency, interest rates, credit, etc., is managed within the program. Program objectives include a comprehensive understanding of derivatives pricing and trading, hedging strategies, investment strategies, and portfolio management. In addition to this, it can be an exciting and rewarding career path for such people, as they have the ability to apply their numerical and creative skills to develop new things, whether it is creating new investment strategies, creating new instruments, or figuring out how to value them.

MBA in Financial Engineering

The Master of Business Administration or MBA in Financial Engineering is a postgraduate course in Financial Management. Students enrolling in the program will understand derivative pricing, asset management, market design, and risk management. Aspirants must have achieved a minimum of 50% in their qualifying university examinations across all subjects. This course is a valuable resource for those interested in understanding how Wall Street's financial models work. An individual should possess excellent analytical and creative skills, as well as good interpersonal and communications skills. The program exposes students to sophisticated engineering tools and methods that are applied to financial problems making them proficient at tackling challenging problems in high-technology finance.

MS Financial Engineering

The MS in Financial Engineering’s main objective is to provide graduate students with knowledge of engineering, applied mathematics in applying mathematical and engineering tools to finance. Financial Markets, Econometrics, Computational Finance, Portfolio Theory, and Asset Pricing, Case studies in Risk Management, Valuation of Financial Engineering, Quantitative Methods in Finance are some of the major subjects covered in this program. Graduates with these skills are of interest to Investment and commercial banks. Trading companies, Hedge funds, Insurance companies, Corporate risk managers, regulatory agencies, etc.

Online Certification Courses for Financial Engineering 

Apart from the classroom certification courses, online courses have gained much popularity like:

• Machine Learning for Trading
• Interest Rate Models
• Reinforcement Learning in Finance

Students solve classical finance problems in reinforcement learning certification courses such as portfolio optimization, optimal trading, option pricing, and risk management. Students will create quantitative trading strategies that they can train, test, and implement in live markets on completing machine learning for trading.

What Is Financial Engineering And Risk Management?

Using financial instruments to manage exposure to risk: operational risk, credit risk, market risk, foreign exchange risk, inflation risk, business risk, legal risk, reputational risk, sector risk, etc., of protecting economic value in a firm is termed as Financial Engineering Risk Management.

Financial risk management requires, Identifying risk sources, measuring, and plans to address them.

Financial Engineering Eligibility

One needs to follow a certain channel to enroll in this course. The basic eligibility criteria to admit into this program is as follows:

• A minimum aggregate of 50% is required in the 10+2 exam with Chemistry/Mathematics/Physics as the primary subjects.
• Admission to undergraduate courses involves passing national-level, state-level entrance tests such as JEE Main, JEE Advanced, ComedK, KCET, etc., to gain admission into institutes.
• To be eligible for a master's in system engineering, applicants must have obtained at least a bachelor's degree in a related discipline with 50%. 
• For M.E/M.Tech aspirants must clear the GATE examination. However, some colleges/universities/institutes have separate entrance exams followed by personal interviews and counseling for admission.
• Some institutes may also prefer, but not require, at least two years of full-time work experience.

Course Fee for Financial Engineering 

• Undergraduate Courses: Fees of Financial Engineering undergraduate courses vary institute-wise. The course ranges from INR 3- 6 Lakhs.
• Postgraduate Courses: Fees of the Financial Engineering postgraduate course vary institute-wise. The course ranges from INR 4- 10 Lakhs.

Importance of Financial Engineering

The field of Financial Engineering has a huge significance. Some of the points depicting the importance of the course are listed below:

• It helps us reduce risk in investments by assessing the total risk of a portfolio
• Assist in making markets more efficient by matching the needs and wants
• Provide financial analysis of the company's product and assets
• Aids in advancing the company's corporate strategy
• Creates real-time economic simulations to predict the future behavior of the market

Financial Engineering Career Scope

Financial Engineering In India is a newly introduced field. A few years from now, financial engineering is the next big thing because of its immense potential as a career.

On completing such a master's program, financial engineering graduates are ready to work in the finance and analytics industries. Career Avenues for financial engineers include various sectors such as Quantitative analysis, risk management, investment analysis, trading, and banking. The salary scope of financial engineers varies between 6 lakhs to 15 lakhs.

Here are top career options for students pursuing financial engineering:

• Corporate financial advisor
• Portfolio manager
• Credit risk manager
• Financial regulator
• Derivatives Analyst
• Data scientist
• Investment analyst

Investment analysts have the responsibility to fundamentally analyze securities to provide buying and selling recommendations for their clients. Business analysts utilize data and analytical models for organizational information purposes to provide insight into making an informed business decision.

The credit risk manager identifies and manages strategic, operational, and other regulatory risks. It also develops and maintains risk management policies, procedures, and frameworks.

Top Institutes for Financial Engineering

The top institutes offering Financial Engineering courses at various levels such as undergraduate, postgraduate, research, and diploma programs are listed below:

• Indian Institute of Technology, Kharagpur
• QuantInsti Quantitative Learning Pvt Ltd, Mumbai 
• Indian Institute of Quantitative Finance, Mumbai
• GD Goenka University, Gurugram

GRE Syllabus for Financial engineering

GRE syllabus is divided into three sections, namely analytical Writing, verbal reasoning, and quantitative reasoning. The time for this paper-based exam is three hours and thirty minutes. For the paper-based for computer-based exam, it is 3 hours and forty minutes.

The GRE is considered the eligibility criteria for students willing to pursue masters in the United States and Canada. Analytical Writing tests a candidate's skills and ability to tackle complex ideas with logic and clarity.

The verbal reasoning section checks a candidate's analyzing skills and ability to conclude, summarizing, breaking down word meaning.

• Basic Sentence structure: Nouns, Pronouns, Adjectives
• Verb Tense
• Idioms & Idiomatic Expressions
• Pronoun Agreement
• Subject-Verb Agreement
• Modifiers
• Parallelism, etc.

The quantitative reasoning section tests the ability of a student to understand quantitative information, analyze and interpret quantitative data, and apply mathematical concepts of geometry, algebra, statistics, etc., solving mathematical problems.

Topics covered under GRE are:

• Percentage
• Number properties
• Profit and loss
• Order of operations
• Ratio and proportion
• Linear equations
• Lines and angles
• Probability Statistics: Average, Median, Mode, Range, Standard deviation
• Coordinate geometry
• Quadratic equations
• Speed, distance, and time
• Simple and compound interest
• Circles, Triangles, etc.

Best Masters In Financial Engineering Colleges Around the World:

• Princeton University, Princeton, USA
• New York University, New York City, USA
• University of California, Los Angeles, USA
• Stevens Institute of Technology, Hoboken, USA
• Columbia University, New York City, USA

Financial Engineering FAQ's

1. Who should opt for a financial engineering course?
   Students who incline the World of finance possess good scientific and mathematical knowledge.
   
   
2. What are the subjects included in the curriculum of financial engineering?
   Core subjects include financial analysis, financial markets, models and methods for financial engineering, financial economics, mathematics for finance, and computer programming.
   
   
3. What is the job profile of a derivative analyst?
   The derivative analyst gathers and analyses market data, thus helping clients to make an informed investment decision.
   
   
4.  What are the must-know computer program skills?
   A student should master these programs like java, python, data mining, C++, etc.