Finance @UTM

Andreas Park

Department of Management and IMI Momentum Conference 2018

in a nutshell: why people choose to work in finance

relative wage=avg wage in finance/avg rest of economy

Source: Philippon (AER 2015) "Has the U.S. Finance Industry Become Less Efficient?"

The Growth of Finance as % of GDP

Source: Philippon (AER 2015) "Has the U.S. Finance Industry Become Less Efficient?"

What happened? Old days...

What happened?

=

+

Moore's Law: the future

Main Structural Change

Main Structural Change

Will AI kill your future?

Remember: all these jobs were lost with computer mainframes -- yet that's when the financial industry "took" off!

TFSA study on the Future of the Financial Industry

GTA: 800,000 jobs in FI

50% of executives believe that 40% or more of these jobs will change fundamentally 

over the next 3-5 years... 

54% of executives believe that 20% or more of FI jobs will be automated

77% of executives will introduce blockchain technology to their institution

95% of executives will increase data analytics and predictive modelling

TFSA study: most critical skills

The Sell Side

  • sell services to investors and customers
  • mainly banks & brokers
  • services include
    • accounts
    • research
    • execution services

The Buy Side

  • buyers of services
  • mainly institutional investors
    • mutual funds
    • hedge funds
    • endowments, pension funds etc

A Taxonomy of the Capital Markets Ecosystem

Vendors and Services

  • develop service products that help run FI businesses
  • examples are tech suppliers (including big firms like IBM), exchanges

Regulators

  • securities and banking regulators
  • Bank of Canada, OSC, SEC, IIROC, FINRA

Let's look at a Big Bank: What does it do?

loans/credit

deposits

consumer

business

consumer

business

securitization

trading

clients

market making/prop

investment banking

M&A

securities issuance (debt/equity)

credit cards

insurance

investment advice

payments

So you want to work in finance?

data, data, data

  • analytics of data

  • processing and organizing of data

  • understanding of data

  • understanding of analytics outputs

  • understanding of where the data comes from and what it means

  • understanding of what you want to ask when looking at data

  • judgement

What do I need to "focus" on? 

where can get the knowledge?

stats, econometrics, marketing

programming-related

projects, projects, projects

behavioral finance, applied economics

finance theory

finance theory

last words

big picture

  • learn theory

  • learn stats thoroughly

  • learn coding - for fun and to make your life easier

learn why Excel is terrible

learn Excel

this is not the time of your life to shy away from hard stuff or to "focus"

  • use what UofT has to offer

  • get an internship

  • become an expert

  • take charge

  • use the PDLC

@financeUTM

andreas.park@utoronto.ca

slides.com/ap248

sites.google.com/site/parkandreas/

Finance Momentum 2018

By Andreas Park

Finance Momentum 2018

I used this deck for the 2018 Finance Momentum Conference, a week of special events for UTM undergraduates.

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