What Is Financial Analytics? Skills, Jobs, Salary, and More

Financial analytics is a type of financial management that focuses on varying types and methods of investments and ways to improve profitability for an organisation or an individual. To work in this field, you’ll need robust technical skills that include financial modelling, valuation, analysis, forecasting, and more.

You can find financial analytics jobs in insurance companies, business media, and private investment firms. Salary varies according to job titles, employers, education, experience, and certification. Read on to learn more about financial analytics and what a career in this field looks like.

What is financial analytics?

Financial analytics analyses an organisation's specific financial processes, functions, and data. Businesses use those insights for investing, forecasting, strategic financial goal setting, and other financial decision-making to increase profitability. Financial analytics may also apply to individuals. Financial analytics professionals who work with individuals rather than companies may focus on portfolio management and guiding individuals in deciding what investments they should pursue for maximum profitability.

Conversely, those who work with organisations may spend more time studying economic trends related to the organisation’s location or industry and may be affected by company policies or regulations. Investment decisions for organisations may include mergers, acquisitions, stocks, bonds, and other means of financial investment that increase an organisation's profitability and valuation. 

Whether you work with individuals or organisations, financial analytics allows you to provide targeted and strategic recommendations for investments that would be beneficial given past, current, and future financial statuses.

Financial analytics vs. data analytics

Financial analytics works exclusively with economic data used in making investment decisions for a company. Conversely, the field of data analytics may work with varying types of financial data within a company for various purposes and not solely for investments.

Both fields analyse data for an organisation, but for different reasons and in differing ways. Data analytics doesn’t always handle financial data exclusively, so someone in this field may work for companies other than those in financial analytics. Financial analytics professionals typically work in investment firms, banks, or related industries.

Technical skills 

Critical technical skills you will need when working in financial analytics include a range of accounting skills, such as bookkeeping, technical analysis, forecasting, and budgeting. Software and tools like Excel and other spreadsheets are also critical in record keeping and analysis. You may use various skills depending on where you work and the individual or organisation's goals. More specific technical skills include: 

• Valuation analysis 

• Joint venture analysis 

• Internal rate of return 

• Return on investment capital 

• Financial modelling 

• Corporate finance 

• Mergers and acquisition analysis 

Why financial analytics is important

Financial analytics provides individuals or organisations with guidance on where, how, why, and in which amounts to invest money, making it a critical service. Many financial analysts deal with investment opportunities that require considerable market research and proficiency in understanding the economic trends and environment whilst weighing the pros and cons of certain investments against an individual or organisation’s financial status and objectives. It requires a deep understanding of all the factors that can affect investments and how to position a client properly within an investment decision. 

From research to execution, it will be your job as a financial analytics professional to understand the big picture and advise clients on how and when to take action on varying investment types. In many cases, the financial stability and continuity of an organisation or individual are at stake, making financial analytics critically important to ensure individuals or organisations make optimal financial decisions given the circumstances.

Working in financial analytics

When you work in financial analytics, you can find positions working for individuals or for companies under different job titles, such as fund manager, portfolio manager, financial risk specialist, securities analyst, investment analyst, or ratings analyst. These job titles work within three broad career categories: sell-side, buy-side, or investment banks.

If you work for the buy-side, you’ll work with private equity firms, insurance companies, or related organisations, developing investment strategies. If you work for the sell-side, you’ll primarily advise other financial services sales agents who sell investments like stocks and bonds and predict when to buy, sell, or hold stocks. Lastly, if you work for investment banks, you will focus on mergers and acquisitions, assessing the potential success of such decisions and making decisions based on many economic factors.

Job outlook

The global market for financial analysts saw a 10 per cent growth rate through 2023[1]. Reasons for this projected job growth include an increasingly growing international demand, changes in the economic landscape, and data and technological innovations and improvements.

Average salary

The median base salary for financial analytics professionals is ₹6,00,000 yearly, according to Glassdoor’s October 2024 data [2]. However, this is an average estimate for all job titles that fall under the title of financial analytics. You will likely find a broad salary range when looking at all job titles and experience levels, from junior to senior-level positions in this financial field. Senior-level positions typically require at least two to four years of professional experience. You may also notice that factors like your education, professional experience, and certification status affect your average salary in financial analytics.

Take, for example, the difference between the job of a portfolio manager and a securities analyst. A portfolio manager earns a median salary of ₹8,69,130 [3], working with clients to manage investment accounts. In contrast, a securities analyst earns a median annual base salary of ₹14,50,000 [4], analysing, researching, and reporting on market trends, drawing on those insights to create reports to use for investment decision-making. Securities analysts work specifically in securities, unlike portfolio managers, who may handle many different types of investments. Both jobs require at least a bachelor’s degree, but many employers prefer a master’s degree. Although requirements are similar, salaries differ based on job title, duties, and possible employer.

Degree options in financial analytics

Careers in financial analytics often require at least a bachelor’s degree in finance, business, or a related field, with a preference for a graduate degree in many cases. Certifications are often required and highly recommended, particularly if you want to move into more senior-level positions. Chartered Financial Analyst (CFA) certification is considered the gold standard in this profession.

Bachelor’s degrees

All careers in financial analytics will require at least a bachelor’s degree. The majors may vary, with common bachelor’s degrees in this field ranging from finance and business to statistics and mathematics. You can find bachelor’s degree programs offered online, in person, or a mix of both. Some students will seek out schools known for their reputation in finance to get an advantage when graduating from their programme of study. Internships are only sometimes a programme requirement, but many learning institutions encourage them because of their benefits. 

Postgraduate degrees

It’s not uncommon to see employers requiring graduate degrees for positions in financial analytics. Individuals and organisations trust these financial professionals with their financial future, so a postgraduate degree is a good idea if you want to pursue this field as a long-term career. Many financial analysts and those in related jobs earn a Master of Financial Analytics (MFA) or Master of Business Administration (MBA) degree.

PhD options

A doctoral degree in finance can benefit anyone who wants to pursue a career as a researcher or educator in financial analytics. PhDs in finance focus on economics and devising research-based methods for financial analytics. Online and in-person finance doctoral degree programs are available. Some standard PhD options for this field include a PhD in financial planning and financial management. 

Certifications

The most common and desired certification in the field of financial analytics is the Chartered Financial Analyst, or CFA, which the CFA Institute offers. You can achieve this accolade by enrolling in the CFA programme and passing the three-part exam. To be eligible for the exam, you must meet educational and experiential requirements. CFA charter holders can qualify for senior and executive-level investment and financial analytics positions.

Learn more about financial analytics on Coursera

Financial analytics is a growing field that helps businesses make informed decisions by analysing financial data. You can make a lifetime career and many opportunities for growth and promotion and take charge of your future by enrolling in online courses to gain deeper knowledge and critical skills. 

Consider the financial analytics course Applying Data Analytics in Finance offered on Coursera, which provides an overview of financial analytics, ideal for anyone just getting into the field. On Coursera, you can also find a Business and Financial Modeling Specialisation recommended if you have experience in the field and want more practice using spreadsheet models and other financial modelling techniques for investment analysis or other applications.