Prof Dr. Amish Dugar, Amity Jaipur: Re positioning of MBA Finance

The financial services sector is the biggest recruiter of finance professionals in India and primarily hires professional (Chartered Accountants, Cost Accountants and Company Secretaries) and management graduates who specialize in finance. It is a common perception that the professionals (CA’s, CS’s and CWA’s) are hired for positions related to operations and back office assignments whereas the MBA’s are allocated with front office roles such as Sales & Marketing which entails tangible targets linked with incentives.

Prior to 2007, with the financial services sector witnessing exponential growth and ever increasing demand of products and services, management graduates were rapidly absorbed by companies and the market dynamics enabled these recruits to achieve the targets with relative ease. It was a win-win situation for the recruiter and the recruited. The supply of management graduates with finance specialization has always lagged the demand pattern of the industry. Witnessing the surge in demand for management graduates, the number of seats in B-Schools also shot up multiple times in short span of time. However, by the end of first decade of 21st century, the euphoria was cooled down because of the impact of Financial Crisis, which was particularly severe on the financial services industry in India. The once booming industry prior to year 2007 is now struggling to survive amidst the cut throat competition, cost pressures and regulatory interventions.

The financial services companies have considerably trimmed down operations for cost efficiency which has resulted in commensurate increase in work pressure of existing work force, especially for the sales team. The ever increasing work pressure with difficulty in meeting the targets has led to exodus of existing sales staff and reduced hiring for new staff. Also, the management graduates have become averse to sales function and aspire to get a job in operations. But getting position in operations function is extremely challenging for the management graduates due to the fact that they have direct competition with professionals (like CA’s, CS’s and CWA’s) who are more skilled to handle these type of positions and also the number of openings in operations is considerably less than the openings in sales team. So the question arises as to what should an MBA graduate, with finance discipline, should do in such circumstances? The probable answer is re-positioning of one self in the job market.

At the inception of the standard two year MBA program, the student should evaluate his/ her skill set for his/ her suitability to sales job. The institution should also play an active role in the process by making the students aware about the skill requirements for the sales function, pros and cons of sales function and other peripheral issues. In case the student finds himself to be capable for the function, the institution and the student himself should focus his/ her efforts to amplify the required skill set. The efforts may include extensive and rigorous trainings and live projects with financial services companies.

The real challenge is when the student is not inclined towards sales function. To get into traditional operations function, like credit analysis, treasury management, etc. will be relatively difficult because a management graduates lack the type of skill set required to handle these functions and will have to directly compete with other professionals in the field. To create a space of its own, the MBA’s will have to look for specific areas in the operations domain where they can outshine the professional such as CA’s, etc. These fields will encompass disciplines such as equity research, behavioral finance, fixed income securities, personal financial planning, etc. Finance, as a specialization, is different from other management related domains in a sense that it requires more technical and conceptual understanding in comparison to others. Hence, developing expertise in this domain will require systematic reading and preparation of the knowledge base, as early as possible in the course. This academic preparation shall be followed up with focused training, projects and research. Thorough understanding of aforementioned domains in finance will go a long run in making the students capable of getting placements in financial operations functions of an entity.

Apart from developing competency in above mentioned high skilled domains, students may be suggested to acquire various certifications related to various domains of finance. These certifications typically include ones offered by NCFM, BSE and AMFI. These certifications will add value to skill set and make them more employable in segment of their choice.

All said and done, the most important trait one requires to get employable in operations related jobs is technical knowledge about the domain one is working. Financial operation, specifically, requires in depth understanding of concepts. Hence, MBA (Finance) should be ready to learn, unlearn and re-learn consistently with changes in the dynamic financial environment.

This article has been written by Prof. (Dr.) Amish Dugar, Amity Business School, Jaipur.