As we approach graduation season once again, university graduates are reviewing their options and lining up interviews with the hope of landing their dream job. As fintech companies have been growing at an exponential rate over the past few years- they have been attracting many university grads from global business schools. Graduates who are looking for jobs in the finance field who normally would apply for traditional finance-related jobs in banks, private equity, and mergers and acquisitions firms- have been showing increasing interest in fintech jobs in the past few years- as they see the value that fintechs offer society; plus the long-term upside potential of working with firms who are leading innovations and developments in finance.
INSEAD- the European business school for graduates, found in a recent report that around 11% of their MBA students joined the fintech field in 2018. “There are many fintech career opportunities available to MBAs,” states Wharton Fintech Club director Matt Applegate. “Students can join a startup and work in roles like business development, operations, data science or marketing. There are also opportunities to pursue careers within the innovation arms of financial services incumbents. Alternatively, MBAs can enter the industry in an investing role.”
There are some downsides to graduates staking their futures in an industry that is still in its infancy; versus established entities like banks. Fintechs have not yet established full recruitment programs like consultancy firms or investment banks have.
The starting salaries for new recruits can also be a downside. MBA graduates can expect to start off at around $90,000- $100,000 (USD) at small fintech startups. In contrast, graduates from Stanford’s School of Business were found to start off in established financial firms at a median salary of $150,000 on average- with a further $40,000 - $50,000 in signing bonuses.
While startups are finding that they cannot compete with established players on the basis of salary, that is perfectly fine- according to David Morris from London Business School. Morris states that salary is no longer the primary priority for MBA grads; that they are looking at other factors such as the ability to generate impact in their respective organizations; and the long-term upside potential of being one of the early/founding members of a growing organization. Morris further states that he expects fintechs to act as disrupters in the finance industry; drawing more business students and graduates away from traditional finance jobs in banks, insurance, and consulting firms; much to the detriment of these firms.
Obviously, graduates this year have a lot more to worry about than graduates of previous years. They are going out into a global economy shaken to its core by Covid-19; with a brutal and potentially long-lasting recession on the horizon. This is expected to put a damper on everything from starting salary to the number of new positions available; as many startups are folding and unable to survive mandatory closure. Time will tell how well graduates of the Class of 2020 will fare.