Mathematical ideas and methods are integrated into the management of very complex and large systems: spaceflights, manufacturing, and, of course, the financial technology industry. Practice shows that employees in high-tech companies must have a strong mathematical background in order to succeed in business. Even if you cannot find a candidate for a specific position, it is easiest to train someone with good mathematical skills in the new direction.
Mathematics is the basis of fintech.
Mathematics is essential in all areas of life. Every day we use basic arithmetic operations to do shopping or manage our time. Every profession involves some kind of mathematical calculations, even if it is unnoticed at first glance. Many jobs such as engineers, programmers, and physicists require a deep knowledge of mathematics. To pursue a career in finance, you need mathematics too.
Fintech companies are constantly trying to figure out how to provide financial services faster and more effectively with the help of information technology. Previously, we had to buy things with cash or stand in line at the bank to pay utility bills or make a transfer to another account. Now everything is much easier. People with mathematics education have given the world the opportunity to pay online and with a card at the checkout, transfer money in seconds, and pay bills in a mobile app.
Based on my personal experience, I can say that not only key employees of fintech companies should have mathematical skills. Perhaps any candidate should have them in order to be hired. To successfully identify which functions and services the financial market needs, invent and develop new services and products, manage projects, build teams, program, and manage the development process, you need a mathematical mindset. Employees should clearly understand how algorithms work and visualize it in their minds.
While programmers, developers and project managers are trained at universities and colleges, to become, for example, a product manager, FinOps specialist or DevOps engineer, you will have to study the basics yourself or take highly focused training courses. By the way, there are plenty of them at the moment. Employees for these positions are most often nurtured by companies themselves by developing new skills on the basis of mathematics education.
Once a peer of mine at a very large company decided to transfer his assistant who happened to be a humanities-minded person to a FinOps position. The experiment was only half successful. If a person does not know how, or simply cannot think in numbers, it is likely to be difficult for them to perform specific functions. In the fintech industry, you cannot complete only mechanical tasks, you should also get your mind right, look through a broader lens, and approach your business from different angles.
In addition, over the past five years there has been a trend in moving of specialists from various fields to IT. Young people after gaining a degree in the humanities or already mature employees from less profitable areas aspire to become managers, developers, and testers. Lots of them complete three-month online courses and call themselves managers, UX/UI designers, programmers and so on, but do not have any real knowledge base. As a result, we see a huge number of applications from mediocre specialists, which only gives the appearance of an overabundance of professional labor. In fact, finding a truly competent employee is now even more difficult.
However, in my opinion, it is not that bad. It is great that people who have had nothing to do with mathematics before want to get closer to technology. We can see an increased interest in this area, which is amazing. The IT industry is at the early stage of its development and is undergoing a significant change. Absolutely all academic fields follow this path, and the current abundance of low-skilled specialists is a normal situation.
For example, Google and Microsoft solved the shortage of employees in the labor market in a simple way. They historically recruit the top graduates from specialized universities. Fintech companies are also actively pursuing this path by hiring graduate students from mathematics universities.
Enthusiasm shown by fintech companies has forced universities and business schools to keep up with the times, knowledge, skills, and competencies. Some of them already offer specialized degree programs in financial technology. The New York University Stern School of Business was one of the first who introduced fintech education in 2014 This gave students the opportunity to earn a specialized master's degree in just a year and a half. Since May 2022, the school has integrated education in new fields, from programming and platform strategy to blockchain and cryptocurrencies.
Demand creates its own supply, so very soon we will see universities and colleges begin to integrate more highly specialized majors and train people at a professional level.
The exact sciences evolve.
In general, mathematics as a discipline becomes a subject of fierce debate not only among educators and scientists, but also in society. More and more schoolchildren and university students fail to master the program, and governments of different countries have to look for ways out of the situation. In the United States, there is a call to simplify the program, while in France many are convinced that mathematical knowledge has lost its prestige, so the government should invest in its popularization.
In the wake of this, California is gearing up for one of the biggest mathematics education reforms this year. The authors of the bill want to make school mathematics attractive. To do this, they propose removing the most difficult sections of algebra from the curriculum, replacing them with “big data” disciplines, abolishing the existing division of classes according to mathematical ability, and replacing admission tests to public schools of mathematics with quota allocation. More than 1,500 scientists, including the Fields Medalists, have spoken out against the education experiment. I partly agree with their opinion.
On the one hand, this will lead to a significant weakening of the algebraic foundations. In fact, they are planned to be replaced by data analysis, which meets the needs of the modern world. This subject will be studied starting from the 9th grade, which I believe to be quite late. On the other hand, children will be trained specifically for the directions that are in demand on the market. Therefore, people with a humanitarian mindset will have more opportunities to enter the world of technology.
Educational reform is indeed necessary, but perhaps in a slightly different way. I think that mathematics is not taught properly at schools and universities. School and university students learning the discipline do not see a causal relationship. They do not understand why they need this knowledge and how to apply it in practice. As a result, only 10-15% of students really get into it, and the rest get their certificates and diplomas without much thought.
To reverse this trend, we should make mathematics really fun and interesting. For example, it would be easier for students to study the discipline if they were asked in class to create simple computer games using mathematical calculations. This practice has already been successfully implemented at the top universities helping students learn computer technology and delve deeper into the subject. I am sure that this trend will be followed in other specific areas as well.
A candidate with a mathematical background is a versatile employee.
The development of the fintech industry is impossible without the introduction of new technologies. The financial services market thrives on informed decision-making in all aspects from consumer lending to risk assessment. The introduction of artificial intelligence has strongly affected the speed of making important decisions, but we need people who can properly use new technologies. To do that, they at least should understand them.
It is precisely mathematics that makes it possible to describe a large number of various processes according to a single model, while using a system of universal analysis techniques. It is an integral part of the fintech industry. If we decompose the term, we will see the following components:
- Fin means financial processes that have a purely mathematical basis. To control them, you should have a wide range of knowledge from the exact sciences.
- Tech is for technological processes. The product development and integration of various functions require mathematical postulates. In this case, math is a must have.
For instance, based on my personal experience I can say that a background in physics and mathematics helps you solve most complex issues. Looking at the problem from a mathematical point of view makes it possible to find solutions more accurately and quickly and achieve sustainable results.
As I described above, there are cases when fintech companies fail to find the right employee because the position is new or too narrowly focused. Unfortunately, the job market will never fully meet the demands – there will always be a shortage of some kind of specialists. However, there is a way out. For example, when selecting a candidate, you can focus on mathematics education and an analytical mindset, which will help them quickly delve into the work and generate new ideas.
An equally effective solution would be to bring together a few employees who are experts in their fields under one umbrella. For example, to create DevOps, you can establish a strong relationship between a programmer and a system administrator. For FinOps, you can build teamwork between a product owner, a DevOps engineer, a financial officer and a C-Level executive. By the way, I studied the specifics in detail and wrote a separate article on this topic.
Success and high-quality results in Product Management can be achieved through the synchronous interaction of a financier, a commercial director, and a Project Manager. By the way, Project Managers are easier to find since universities train specialists specifically for this position.
Fintech also needs a lot of analysts. Every year a new record is set for the amount of data generated. Trillions of online transactions including purchases, bookings, subscriptions, payments, transfers, and settlements generate a huge amount of data, structuring and interpretation of which allows companies to maximize profits and minimize risks. You cannot complete these tasks without employees with a mathematical background.
Another promising profession is a blockchain developer. It has a huge potential for the introduction of new ideas. And if an employee for this position is required right now, and there are no suitable candidates, again, a common developer with deep knowledge in the exact sciences and finance will do.
To summarize, I would like to note that mathematics is the basis of fintech. It allows us to manage algorithms and operate with abstract concepts, which is exactly what specialists from the financial and high-tech industries need.
I am sure that very soon low-skilled candidates on the market will be replaced by academically trained professionals. Some 10-15 years ago a similar transformation took place in the computer sciences, which initially were not studied deep enough. Now this direction is developed at probably every university. We can see that people from different fields aspire to get into IT, and the result will not be long in coming.