Finance Definition: Finance Industry, Skills & Jobs
Finance covers the study and management of money, as well as almost any activity relating to money. Finance is a large industry, encompassing lending, banking, forecasting, investing, and a large breadth of other matters related to the distribution and trading of financial assets. Our guide will provide you with some resources to make sure you're up-to-date in the world of finance and how it functions in the tech industry today.
What Is Finance?
Finance is a term that describes the business of managing money. It can refer to lending, investing, forecasting and any range of other activities related to the distribution and trading of financial assets. The business of finance can be separated into three categories: personal finance, corporate finance, and public finance.
Personal finance describes anything relating to individual or family financial planning — mortgage borrowing, estate planning and retirement investing can all be grouped together as personal finance.
Corporate finance refers to how businesses and large enterprises maintain control over their spend, investments and shareholder value.
Public or government finance is characterized as the analysis of how funds can be allocated toward public interests, with which government entities can make decisions about trade regulations, taxes, and public expenditures.
As long as currency is exchanged, the financial industry will continue to flourish. The Bureau of Labor Statistics predicts overall employment for business and financial occupations will grow by roughly 7 percent between 2021 and 2031, resulting in an estimated 715,100 new jobs. The financial research organization Opimas discovered that around 35 percent of new job postings are for tech professionals and data scientists.
Competition for finding and keeping the best talent in finance has been heating up. Among hiring managers working to fill accounting and financial positions, more than 80 percent at public companies and roughly 69 percent at private companies said they’ll have to work hard to attract and retain employees. They identified the top three drivers of this urgency to be increasing workloads, the need for technological skills and attrition as a result of the Great Resignation.
The exponential growth in tech-related finance positions can be attributed to the growth of global capital as a whole. It has been estimated that there are over 3 million e-commerce companies headquartered across the globe, but that number doesn't begin to represent the innumerable ways that businesses, organizations and individuals exchange money digitally. As more players in the global economy move online, financial institutions need to be able to manage and transfer massive amounts of money both online and in person.
Noteworthy Fintech Companies
- Supernova Technology
Tech professionals, especially those skilled in computer programming and data science, enjoy a desirable status among finance world recruiters. It’s become second nature for banks to turn to automated technology for help processing vast data sets, and leaders in finance are constantly looking for new ways to employ AI and machine learning for maintaining security and forecasting market shifts.
Having a bachelor’s degree in finance is among the top 15 college majors with the highest median earnings for degree-holders from 22 to 27 years old. Salary information collected by Built In shows the average yearly earnings for people working in the finance sector hover around $122,000. Common entry-level finance positions include junior accountant, budget analyst, financial analyst, personal financial advisor, financial auditor and credit analyst.
Take a job like financial analyst, for example, and you’ll see the median annual wages sit at $95,570, while the median for all U.S. occupations is $45,760, according to the U.S. Bureau of Labor Statistics. Earnings for financial and investment analysts can range from less than $60,000 to more than $166,000.
A big factor in determining the average salary for a finance professional can be demand. For instance, in a city as bustling and competitive as New York, a higher-level job such as senior financial analyst can enjoy an average base salary of $108,313, compared to an overall national base salary average of $102,570.
Skills Needed for a Job in Finance
Great Skills for Jobs in Fintech
- Accounting skills
- Understanding of forecasting and reporting
- Knowledge of finance software like QuickBooks
- Data science programming languages like Python
- Strong attention to detail
- Ability to perform under pressure
Like any other profession, a successful career in finance requires a combination of both soft and hard skills. Any aspiring finance professional must begin with a strong set of basic accounting skills. Since finance is primarily a numbers game, those looking to succeed in the industry have to have strong mathematics skills in order to understand cash flow, budgeting, and cost analysis. The need for market trend and spend forecasting makes a well-developed understanding of data science another essential hard skill. Additionally, today’s aspiring financial analysts are expected to have a level of comfort with programming and software, as more and more organizations employ platforms like QuickBooks and Python to conduct prediction models and develop future strategies.
As for soft skills, strong communication and stress management capabilities are key to building a good reputation in the finance world. Any top finance professional needs to be able to convey pertinent financial information to clients or managers through financial reports or presentations, and as such must be able to effectively articulate big trends or potential directions as succinctly and accurately as possible. Like any other job, finance professionals need to be able to perform under pressure and feel comfortable working with certain amounts of risk. In addition to this, due to the nature of finance and working with money, it's also important to maintain strong attention to detail and demonstrate high organizational skills.