The love affair between MBAs and investment banks may have been on the wane for some time now, but this doesn't mean they're turning away from financial services all together.
More MBAs go still into corporate finance than any other area of the financial sector, but this figure is gradually falling. As investment banks focus on bringing in more quantitative graduates directly on to their training programmes, and Master of Finance degrees start gaining more traction on Wall Street, the luxury of recruiting MBAs on to associate programmes has faded. Meanwhile, MBAs have retreated back to the safety of consulting roles, or large tech firms.
But MBAs have found a new vocation – fintech, or even more technical roles.
“There are new opportunities such as fintech, as well as opportunities to impact how finance is done in the future,” said Sue Kline, co-senior director of the career development office at the MIT Sloan School of Management. “We are also seeing an increased demand toward quantitative finance roles, particularly in hedge funds.”
One example of a former financier using an MBA to move into fintech is David Gogel. He graduated with a B.A. from the University of Pennsylvania's Wharton School, during which time he interned at Goodyear, private equity firm A capital and RBC Capital Markets. Upon graduation, he joined AIG and began working his way up the ranks. Earlier this year, he got a fintech certification from MIT and accepted a position as vice president of the Singapore FinTech Consortium. Most recently, he's returned to his undergraduate alma mater and is currently an MBA candidate at Wharton.
New York University Stern School of Business remains the biggest feeder of MBAs into investment banking among the major U.S business schools, but even here there's been a significant drop off. In 2008, 61% of the graduating class sought financial services positions, compared to 35% this past year (2015). But NYU Stern has announced the launch of a new fintech MBA specialization, which will begin this fall in response to increasing demand for fintech expertise from MBAs.
“We will always attract students interested in finance roles, and we continue to maintain strong relationships with many of the investment banks that are so close to us here in downtown New York,” said Beth Briggs, Senior Director, Office of Career Development, NYU Stern. “Having said that, we have seen a change in the number of students heading into finance.”
At the Samuel Curtis Johnson Graduate School of Management at Cornell University, of the class of 2015, 34% entered financial services, approximately half of which got a job in investment banking. Around 16% chose a career in technology.
David Capaldi, the finance career advisor for the MBA program in the career management center at Cornell Johnson, said that MBA students were more interested in buy-side careers including both hedge funds and long-only asset management. Last year, around 10% of students went into these sectors.
The rise of technology
Meanwhile, at the Massachusetts Institute of Technology (MIT) Sloan School of Management, 15,5% of the MBA class of 2015 went into finance. Of this, 6.1% accepted an investment banking job, down from 8.1% in 2013, compared to 30.6% who got a job in "high technology," a category that includes computers, electronics, software, internet and telecommunications.
Looking ahead to this year’s class, 18.6% of 2016 MBA interns have accepted a job in financial services so far.
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