There are more financial career options than ever for aspiring professionals. While the more traditional positions still dominate the finance industry (wealth managers, traders, bankers, analysts, compliance specialists, etc.) there are an increasing number of computer programmer jobs for technology professionals to switch industries. One of the hottest new destinations for computer programmers (a.k.a. ‘coders’) is Wall Street.
Computer Programmer Jobs within the Finance Industry
It’s understandable why there is such demand for computer scientists, programmers, and coders-traditional financial firms are under constant attack from disruptive competitors.
The intersection of traditional banking and financial technology (fintech) startups has forced many major banks to rethink their hiring strategies.
For example, the robo-advisor industry, while still in its infancy, is projected to surpass $2 trillion in assets under management by 2020.1
More worrisome for big banks is how quickly this trend is growing, an estimated 68% annually according to consulting firm A.T. Kearney.2
This is a real threat to financial advisors and asset managers in general.
Research departments are also under fire since firms can outsource their analytical needs to data science companies like Kensho.
Ultimately, software developers are trying to land positions as quantitative analysts or ‘quants’. These professionals write complex algorithms that help their organization make money. Their ability to create innovative financial models is highly coveted at buy-side institutions such as hedge funds.
Even traditional investment banks such as Morgan Stanley and Goldman Sachs have internal asset management divisions which sometimes operate more like buy-side operations.
Compensation for Computer Science Professionals
One of the reasons these technology professionals are being recruited into these finance roles is the generous compensation levels that Wall Street firms are offering these professionals.
The average computer science professional makes more than $76,000 per year according to PayScale.3 Glassdoor pegs the number a bit higher, at just over $109,000.4
But there are examples of some ‘quants’ making considerably more when they move into finance.
The numbers can get really high for top-end talent. Many are hired at up to $150,000 or more by financial firms. Some quants report making $300,000 at age 23.5 These are extreme examples for sure, but if you can catch a good year working for a hedge fund it is possible.
As an FYI, the computer language most associated with higher pay is Python according to respondents on Payscale.6
Numbers that high are most likely coming from bonuses, so keep in mind that bonuses can be highly volatile and, as any accountant will tell you, are subject to higher taxes. Of course, you may be able to mitigate tax consequences by taking a page out of a Robert Kiyosaki book-consider forming an LLC and doing more contract work for banks (what he calls ‘minding your own business’).
Computer Programmer Jobs Security
Some programmers are choosing the stability of compensation in finance over the riskier startup culture (especially if they are a bit older, with families). They enjoy the predominantly cash-based bonus structure seen at financial institutions. Compensation in the tech world is more likely to come in the form of stock options, which could take years to fully vest. Others may have been involved in startups that didn’t make it and the stock options ended up worthless.
When Coding Goes Bad
But the relationship isn’t always rosy and disagreements arise between employer and employee, typically overpay. A substantial proportion of compensation in finance comes from the annual bonus, so there is the opportunity for disappointment.
The story of Sergey Aleynikov tells a similar tale. The Russian immigrant’s starting salary on Wall Street was $270,000 when he was hired by Goldman Sachs in 2007 to help oversee an existing trading program (comprised of over 60 million lines of code!)7
Bidding wars for top talent aren’t uncommon in finance and a year into his stint at Goldman, UBS offered him $400,000 to come over.8 Goldman thwarted that attempt by matching the offer.
But Aleykniov was soon made an offer he couldn’t refuse. High-frequency trading firm Teza Technologies offered Aleynikov over $1 million to write code for them.9
This is not surprising that they would want someone of Aleynikov’s talent considering computerized trading accounts for over 60% of the volume of futures contracts and roughly 75% of the trading volume on U.S. stock exchanges.10
Apparently, everyone has their price and Aleynikov accepted. For some perspective, Aleynikov was making $8.75 per hour running computer systems for a New Jersey medical center after he immigrated to the U.S.11
Unfortunately, Aleynikov was found guilty of ‘stealing’ the same code he helped create before he left Goldman. This problem becomes not only an ethical challenge but also –who ‘owns’ the code.
This type of ethical dilemma that is covered extensively in the CFA program. Aleynikov eventually served prison time for the offense.
Online MBA in Finance Degree
While it is true that coders create elaborate, black box algorithms for market makers and hedge funds, for most banks, an ability to see manage a team and ‘see the bigger picture’ that employers look for.
But the transition into finance can be a bit of a culture shock to some. The broader business curriculum provided by many online MBA in Finance programs provide the fundamental business tools they may not have been introduced to prior.
These include financial and managerial accounting, financial statement analysis, marketing, strategic management, business ethics and production and operations management. This background allows for a smoother transition into a career in finance.
The University of Scranton offers an online MBA in Finance program that provides flexibility for busy professionals. The program culminates with a student Capstone project which draws upon all the skills taught in the program to solve a business problem.
Sometimes, this is a real world business that students must analyze and make recommendations to the actual business owner to improve operations. This applied approach offers invaluable experience to interact with a small business owner or executive. It expands the student’s network, maybe the most beneficial aspect of getting an advanced degree versus a financial designation alone.
Learn More About a Masters Degree in Finance
In addition to the subject matter, the mandatory participation in group projects provides a nice complement to the more independent world of computer programming. If you have managerial aspirations, the teamwork and leadership skills fostered by an MBA program are invaluable for a career in finance.
Despite the similar monikers, we like the idea of the MBA in Finance degree rather than an online Masters in Finance for transitioning technology professionals. If you currently work in technology, you may not have an undergraduate degree in business. So receiving a Masters in Finance degree may be leaving candidates overwhelmed by the greater finance concentration and lacking the aforementioned fundamentals of business.
In short, technology professionals make themselves considerably more valuable to financial firms by adding an MBA to their existing skill sets, which can help them land computer programmer jobs in the finance industry.