The Vital Role of Financial Analysts in a Shifting Market

Today, more than ever, businesses and individuals need trusted guidance and advice to help them make sense of new and complex financial situations, recover from financial hardships, and make a plan toward recovery in our volatile economic climate. Financial analysts with the right mix of skills, experience, and understanding to tackle current and future economic and business challenges against the backdrop of a global pandemic are in high demand.

What Do Financial Analysts Do?

Financial analysts analyze and draw insights from vast and ever-growing amounts of current and historical financial data, and use their findings to help businesses and individuals make sound financial decisions. They also research microeconomic and macroeconomic conditions, along with company fundamentals, to make business, sector, and industry predictions. These types of predictions can help guide investors away from unnecessary risks and toward the most logical choices based both on their situation and the market as a whole. Analysts may also be hired by companies to analyze the cost-benefit of certain investments.

Financial analysts work at all kinds of businesses, including banks, insurance companies, securities firms, and startups. They generally focus on businesses and economic trends that affect a particular industry, geographic segment, or type of product, and work to understand how new regulations, policies, political situations, and economic trends may affect investments.

In an economy fraught with uncertainty, financial analysts also provide a necessary pulse check for businesses and individuals, offering deeper insight into forecasting trends and potential pitfalls in a rapidly changing labor market.

A Changing Role in a Changing World

A bachelor’s degree is a standard requirement for a financial analyst, and most analysts major in fields such as economics, accounting, finance, or statistics. Financial analysts are required to be good with numbers; analytical; and have strong business acumen. Beyond these qualifications, however, successful financial analysts with sophisticated skills are increasingly in high demand, as Big Data and AI encroach on everyday business. As a result, MBAs and other advanced degrees are becoming more widely preferred. The financial analyst role will increasingly require skills in AI, machine learning, and data science. In fact, job seekers with this type of expertise are already among the most in-demand candidates in the finance industry.

With more rote functions becoming automated, financial analysts have the ability to focus on more strategic and data-driven initiatives, increasing their value to employers and clients and staying competitive amid growing AI capabilities. Though it’s been predicted that automation could displace nearly one-third of finance jobs by the mid-2030s, many experts argue that AI will change how we define certain roles and add new kinds of jobs, rather than simply displacing current jobs.

In preparation for increased automation in the workplace and in the financial world in particular, however, finance professionals must start to adapt their skills now to remain competitive and set themselves apart.

New Skills Coming to the Forefront

Today’s financial analysts have a significant part to play in helping businesses and consumers adjust to a “new normal,” while also helping them rebuild and successfully navigate their financial futures as the economy makes plans for eventual recovery.

Today’s financial analysts must:

  • Be comfortable analyzing and using Big Data.

As outlined above, knowing how to use Big Data to draw out sophisticated insights is important for financial analysts who want to stay competitive in a healthy economy—but in the midst of our current economic crisis, it’s also an essential part of protecting businesses’ and consumers’ financial interests. Financial analysts who are able to use Big Data insights to outline gaps and find ways for companies and individuals to save money is a real need right now, and that likely won’t change for the foreseeable future.

Although the ability to analyze and use Big Data, which is rapidly increasing in scope and sophistication, is a must, data analytics skills are still sorely lacking in many financial departments. Companies are working to create more data-driven cultures in light of AI developments and changing workplace priorities, and the COVID-19 pandemic is intensifying the need for intelligent data analysis and insight. Financial analysts and other finance professionals have an opportunity to be on the front lines of change and help to navigate this new terrain for businesses and consumers. Financial analysts who are able to gain skills in Big Data, AI, and machine learning, and thread these skills into their everyday work, as well as employees who are able to re-skill and gain sought-after expertise, will serve an important need for their clients.

  • Understand and stay on top of changing market conditions.

Financial analysts must also understand the world’s changing markets, from changes in domestic monetary policy to shifts in international trade agreements. This is becoming more and more vital in a market that is dealing with unprecedented events and market conditions, and financial analysts must have up-to-the-minute knowledge about breaking regulations, policies, political situations and economic trends that could affect investments or adversely impact the financial situations of businesses or consumers.

  • Be steadfast but sensitive in a changing environment.

Financial analysts must be able to communicate the sometimes complicated nature of data findings into relatable business terms and scenarios that clients can easily understand. Financial analysts need to clearly communicate with all kinds of internal employees, including management teams, product end-users, and frontline employees, in a way that empowers them to act on the findings and analyses.

Despite fluctuation or unforeseen circumstances, financial analysts must be a voice of reason, stability, and confidence, while delivering informed courses of action and sound advice to their clients and patiently explaining why they recommend a particular course of action. Balancing assuredness with empathy in today’s environment is also key; clients need to know they can freely ask questions without judgment, and that their situations and concerns won’t be brushed off.

Today’s financial analyst isn’t last year’s financial analyst—or even last month’s. The role is shaping into one that deals with not only complex and up-to-the-moment data and market analysis, but also the human side of finance. Financial analysts can serve as a source of knowledge and guidance in times of economic uncertainty, whether around the office corner or around the world.

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