Riding on the wave of the future: Specialized Finance M.Sc vs. Traditional M.B.A.

Article by:Mohammed Khnifer

The specialised finance MSc may be riding on the wave of the future, but some HR managers at Universal Banks have not yet fully realised the value of hiring someone who is already a specialist. The “good old days,” when an HR manager was forced to choose a graduate specialist in Economics for a placement in the Corporate Finance division (not the graduate’s exact discipline!) should be long gone by now. But apparently they are not!

What the old generation of HR managers, most of whom are without a solid financial academic background, should come to realize that the financial industry is in the process of being reshaped from top to bottom by graduates who hold the so-called Specialized Finance degrees (SFDs).Just as MBA holders were the hot trend for the past decade, MSc. holders with a specialized finance background should be the winning bet in the age of financial innovation, as their technical expertise is poised to take us to the next level. Specialized MSc. in Capital Markets, Corporate Finance, Financial Engineering, Islamic Investment Banking, Financial Risk Management, and even International Shipping should change fundamentally the way the recruiting process is being implemented by these universal banks.
These are the next generation of graduates for whom you should pay a premium in order to recruit them. Unfortunately, many of them are eliminated by a computer-based software while they are in the first stage of the recruitment process. They do not even reach the scrutiny process by the HR staff. With the evolution of progressive specialized MScs, the stakeholders of the investment banks should cope with the fact that a financial education will ultimately raise standards as the pool of talent deepens.
The Birth of Bouquet Business Schools

As the market is over-supplied with MBA courses, other mid-tier schools found a convenient way to differentiate themselves. This led to the birth of what I call Bouquet Business Schools who are leveraging on their specialty to offer a wide variety of specialized MSc. programs. Such mid-tier schools can produce better qualified graduates for employment in an Investment Bank rather than a prestigious school with an established traditional MBA.

Unfortunately, the complete computer based recruitment process does not take such uniqueness in any niche type of financing. As a result, the institution loses a huge number of talented human capital without realizing it.An example of a mismatch of the needs of a well-established Investment bank is JPMorgan Chase. JPMorgan Chase has not reduced new MBA hiring levels and will search for talent at 20 to 25 schools this year vs. about 15 last year, according to Joanna Moody, head of campus recruiting for the companys investment banking unit in North America.

Other schools have begun introducing specialized MBA programs, but they do not offer the breadth of specialized finance MScs. These schools often begin by introducing specialized programs in established management sub-disciplines, such as human resources, project management, information technology management, supply chain management, and nonprofit management.

It was reported also that Asian universities have begun to follow suit. MBA India, for example, lists about two dozen schools offering specialized degrees in fields such as real estate, construction, bank, travel, and tourism, pharmaceutical and even rural management.
But the question that remains is: When will the HR managers of Investment banks appreciate the new breed of specialized Finance MScs rather than inflating their financial institutions with mainstream disciplines in economics or traditional MBA programs? As long as they do, Islamic Finance and their graduates are facing a long and unnecessary battle.


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