Financial Analyst vs Data Analyst: An Overview
If you are a student or young professional with a knack for numbers, analysis, and an expert problem solver, consider a career as a financial analyst or data analyst. Financial analysts use financial data to spot trends and extrapolate into the future, helping their employers and clients make the best investment decisions. Companies rely on financial analysts to determine the best time to buy or sell specific securities, and in some cases companies use reports compiled by financial analysts to determine whether the entire company should be sold.
Data analysts play a similar role, with the main distinction being that these professionals analyze data that may or may not be related to investment decisions. For example, a data analyst might study numbers related to sales figures, advertising effectiveness, transportation costs, or wages versus productivity.
Ultimately, any digital data that can be used to make a business decision is potentially the job of a data analyst. Although not as focused on the financial markets as their counterparts in the financial analyst world, data analysts must always maintain up-to-date knowledge of investment practices. Often, accessing and organizing the data needed in this role requires high-level computer skills, which makes an information technology background, or at least a working knowledge of the field, a definite asset for an aspiring data analyst.
Since education and skill requirements, earning potential, work/life balance, and labor market competitiveness are similar between the two fields, subtle differences in personality type and personality set skills determine whether a person is better suited for a career as a financial analyst or data analyst.
Financial analysts tend to take a broad perspective when undertaking their work. They review financial decisions based on current market trends, stated business objectives, and possible investment options of companies while reviewing economic data and financial forecasts.
A degree in finance is probably most advantageous for aspiring financial analysts, although math or economics could also suffice. A master’s degree in business administration (MBA) can help a financial analyst, but it’s not always necessary. Financial analysts can also opt for the very selective Chartered Financial Analyst (CFA) designation. Unlike the CPA, which focuses on a professional understanding of public accounting standards in the United States, the CFA focuses on those who actively make investment decisions on behalf of clients or an employer. This test is in 3 parts and administered and supervised by the CFA Institute.
Many financial analysts are also CPAs, and many accountants have a CFA designation. Having both titles is considered a major advantage for almost any career in the business world and requires significant proficiency in business accounting and investment knowledge.
Financial analysts earned a median annual salary of $84,300 in 2017, the most recent figures as of February 2019. The top earners earned nearly $115,000 and the bottom echelon earned about $64,000, according to the Bureau of Labor Statistics. Financial analysts tend to earn the most in major financial centers, such as New York or San Francisco. Bridgeport, Connecticut is also a lucrative destination for analysts. Increasing regulations and market complexity are driving the growth of financial analysts, especially among large companies with a lot of assets to manage.
Data analysts have a narrower view. They collect data and review it to spot trends and glean insights that can be used to make business decisions. In the information age, businesses rely more than ever on Big Data to make decisions such as which customers to target, which products and services to focus on, which advertising methods to use, how many who to hire and for what positions, and new markets. for enlargement. For virtually every business decision, data is available to steer the business in the right direction. The role of the data analyst is to source this data and draw conclusions that the business can use to make decisions.
Data analysts are in demand everywhere. This is not an industry-specific role. Any business savvy enough to understand the importance of data analytics needs skilled data analysts. While data analysts earn above-average salaries, the returns on investment (ROI) for the companies that employ them are even more impressive. Trends spotted and insights gleaned by data analysts often earn their employers millions of dollars a year.
Students and young professionals who have a penchant for quantity, logic, computing, good communicators, and want to earn an above-average income while working reasonable hours should consider data analytics as a choice. careers. Industry analysts have named it one of the hottest career choices for the 2010s, with projections indicating that demand for data analysts is set to grow rapidly as more and more businesses understand the importance of leveraging Big Data.
The median annual salary for a data analyst is $54,070 in 2013. The median range, i.e. 25th to 75th percentile, is around $45,000 to $66,000. The fact that such a variety of companies in a variety of industries employ data analysts contributes to the wide range of salaries. A candidate’s company size, industry, geographic location, education, experience, and other factors combine to determine a data analyst’s entry-level salary.
Neither career imposes general and strict educational requirements. This means there are no exams you need to pass such as the bar exam or medical boards before you can even legally practice the profession. Individual employers set their own requirements for new hires. Generally, the more competitive the job market for financial analysts and data analysts in your area, the more rigid the standards.
In either profession, most new recruits have earned at least a bachelor’s degree, with master’s degrees becoming more common with each passing year. The best college majors for a financial analyst are economics, finance, and statistics. Most large companies that hire financial analysts are looking for one of these three, and as a bonus, these majors look great when applying for an MBA program, especially when combined with a competitive GPA and a work experience.
For aspiring data analysts, a degree in statistics is a great place to start. even better, double your major and add information technology, computer information systems, or another up-to-date technology major offered by your school. When hiring a data analyst, employers want to see a healthy mix of quantitative acumen and computer literacy that goes beyond knowing how to enter numbers into Excel. A bachelor’s degree is not an official requirement, but a de facto requirement, for data analysts, and a master’s degree makes you much more competitive in the job market.
Financial analysts and data analysts must be excellent problem solvers, excel in the use of logic, and have strong quantitative analysis skills. Additionally, successful financial analysts have a deep understanding of various financial markets and investment products. For data analysts, it helps to maintain up-to-date computer skills and have at least a cursory understanding of some of the more common programming languages.
Strong interpersonal skills, leadership ability and teamwork are beneficial for either career. Many financial and data analyzes are performed as a team, and analysts must report their findings to various departments within the company in a clear, concise, and compelling manner.
The US Bureau of Labor Statistics (BLS) reports an optimistic outlook for financial analyst jobs between 2016 and 2026, with job growth projected at 11%. However, the BLS cautions: “Despite job growth, competition is expected for financial analyst positions. Growth in financial services should create new positions, but there are still many more people who would like to enter the profession that there are no jobs in the industry. Having certifications and a graduate degree can significantly improve a candidate’s prospects.”
The BLS didn’t detail the data analyst job in its latest forecast, but the broader job market for “financial specialists” is expected to grow by 10% between 2016 and 2026, which is faster than the 7% growth expected in all occupations. United States. For the foreseeable future at least, a strong demand is expected to exist for quantity-minded professionals who can extract relevant information from vast pools of data and use it to draw conclusions and make predictions.
Which one to choose
Both are great careers: the earning potential is strong, the hours of work, averaging 40-45 hours per week, are not oppressive, and the job market is primed for growth. The distinctions between the two jobs are mostly nebulous, but the biggest difference is that the day-to-day duties of a financial analyst are much more involved with investment markets.
If you have a keen interest in investing and following Wall Street, but want to avoid the powdery environment of investment banking and trading, financial analysis is a career to consider. If, on the other hand, you love working with numbers but also love computers and technology, you probably have the skills and interests to become a good data analyst.