In our increasingly diverse labor force, STEM (science, technology, engineering, and mathematics) degrees are in high demand.
While information security analyst jobs were among the fastest-growing in 2019, it’s not only tech companies that are looking for capable STEM professionals to join their innovative team; a strong background in STEM may also open doors in the finance industry.
Why is the finance industry embracing STEM professionals in increasing numbers, even outside of old-school, traditional roles like IT and cybersecurity?
While there are plenty of factors at play, the integration of digital technology into nearly every aspect of daily life is a big part of the overall picture.
Financial transactions are increasingly conducted via digital channels, for example, and we’ve seen a meteoric rise in online shopping in recent years.
Simply put, STEM graduates have a well-rounded skill set and can bring a completely different perspective to an aging industry. Thus, for the financial industry to keep up with the times, STEM professionals are a crucial component.
Let’s take a look at the growing overlap of skills and qualifications between STEM professionals and the finance industry, and why a STEM-focused education can take you far.
Technology, Banking, and Investments: An Online Exodus
For those of us in developed countries, technology is all around us, and most of us wouldn’t be able to conduct business or even communicate without help from the internet. Digital technology is effectively the backbone of finance.
The possibility of an almost instant connection with any location on Earth allows the stock market to function at lightning speeds, for starters. Nearly every corner of the financial service sector now relies on internet communications, from online banking to personal financial management software and beyond.
Online banking has exploded in popularity in recent years. Once a fringe aspect of personal finance, more than 64% of U.S. adults used digital banking in 2021. The number is expected to climb into the foreseeable future.
Additionally, more and more people are thinking outside the box when it comes to personal finance and investing in alternative assets like cryptocurrency, real estate, and precious metals.
To some, alternative investments allow everyday people to have greater control over their finances and are considered more stable than fiat money and an unpredictable stock market.
As the bulk of banking and investment transactions are now conducted online, financial institutions must rely on software — banking apps, compliance monitoring, trading, etc — as well as STEM professionals to keep everything running smoothly.
It is here where we can see the overlap between technology and the financial world, and those with a niche background in finance and/or business are likely to fall behind.
When creating financial software apps, there’s also a human element to the process, and the needs of the end-user must be considered. To create and utilize user personas to your advantage, plenty of research is required.
Within the financial sector, STEM professionals develop user personas by collecting and analyzing user data, and weighing that data against analytics while looking for patterns.
This data visualization is what can help businesses in the financial sectors become both more data mature and more mature overall. User personas allow financial institutions the chance to visualize the behavior of their customers.
Creating user personas can be a complex endeavor, requiring a well-rounded skill set as well as an analytical mind. It’s no wonder that financial institutions are increasingly turning to STEM candidates to get an edge over the competition.
Professionals in the finance industry who studied STEM subjects will possess the tools and technical training needed to take a business to the next level.
The Benefits of a STEM Education in the World of Finance
Developing user software is just the beginning, and individuals with a strong background in STEM are in high demand across all corners of the finance industry. Interestingly, however, certain degree paths are more common among those STEM professionals who ultimately make the switch to the financial sector.
For instance, in a 2019 study, researchers from Indiana University looked at the career choices of several prominent engineers in the U.S. and found that upwards of 7.4% of engineers with a computer science degree enter the finance industry directly after graduation, bypassing the STEM fields entirely.
School choice also factors into the equation, and the IU study named several standout universities when it comes to engineering graduates in the finance industry.
Also boasting strict admissions policies, schools with the highest number of engineering graduates in high finance growth areas in such prestigious names as the following:
- Carnegie Mellon
- Cornell University
- Massachusetts Institute of Technology (MIT)
The good news for STEM professionals is that you’re still in high demand, no matter the reputation of your alma mater.
Promoting a More Diverse Workforce in Finance and Beyond
That’s because, for modern employers around the world, fostering a diverse work environment is just as important as finding workers with a strong STEM background. Improving diversity is a smart choice, from both an economic and ethical standpoint.
If a workforce is primarily monocultural (that is, homogeneous, or lacking diversity), it can be difficult to understand client needs, making the creation of user personas nearly impossible, to say nothing of customer retention or long-term economic prosperity.
Unfortunately, STEM isn’t exactly infallible when it comes to diversity, nor is the finance industry. A whopping 84% of U.S. professionals in the fields of science and engineering are male, of European or Asian ancestry, reports Wired.
Further, there’s a significant wage gap between male and female STEM workers, and high numbers of women in STEM leave the industry altogether, usually citing a hostile work environment as the underlying cause.
But just as the overlap between finance and STEM fields continues to grow, so do opportunities to make long-term changes and help bring about a more inclusive world, one step at a time.
By employing STEM professionals in greater numbers, the finance industry is making plenty of headway in terms of navigating our diverse, rapidly changing world.
Dan Matthews is a freelance writer with a penchant for financial wisdom and solid research. You can find him on Twitter @danielmatthews0 and LinkedIn.
Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.