Ross McGill

July 10, 2015|10 Minutes

Do You Need A Degree To Get Into Financial Services?

Do you need a degree to get into financial services? Absolutely not! But then this answer is as uninformative as the question is concise. Let’s consider the issues more broadly…


The diversity of the financial services sector is really amazing, although perhaps less so when you consider that this sector creates the most jobs and the most transfer of value in the world. Its what, as the Greeks are finding out the hard way, makes the world work. Depending on your political persuasion you might not like that, but it’s a fact of life. So, like any other fundamental pillar of our social systems, it’s not just wide, it’s deep. There’s room for a very wide diversity of people within it.

Financial Disciplines

There are many people in many industries that trend towards this ‘degree level’ culture. I liken this to the debate going on in the health service in the UK today. It seems that the pre-requisite for getting a job as a nurse is a degree, preferably an honours degree. Personally, I’d prefer to be looked after by someone who is smart, experienced and compassionate than someone with nothing except several years of theory and exams behind them. Equally, in the finance sector, it helps to be smart, numerate and literate, but there are lots of people who fit that description who don’t have a degree. In fact, if you go back far enough into history, the finance industry was simply a group of traders negotiating commodities over a barrel in the local market place (hence the term ‘you’ve got me over a barrel’). None of them had degrees. Of course today, most people would think that the finance industry is synonymous with the term ‘banker’. Given the media rhetoric about ‘bankers’, it’s surprising that anyone (with or without a degree) would actually want to join the industry in the first place.

We should perhaps first define what we mean by ‘financial services’. Most ‘outsiders’ have no clue what this term encompasses (and quite a few insiders very quickly get siloed). Buy side trading, sell side trading, securities lending, arbitrage, brokerage, prime brokerage, paying agency, withholding agents, network management, standards like ISO, XBRL, FIX and others, custody, tax operations, income processing, corporate actions, transfer agency, high frequency trading, proxy voting, securities class actions, asset servicing, fund valuations, advisory, investment management, bonds, sales, relationship management, reporting, compliance, legal, operations – and this is just what trips off the tongue. Each of these is a discipline in its own right with its own (coded) language, history, traditions and special skills requirements. So, before we ask whether you need a degree to get into it, you need to get a better idea of what ‘it’ is and where your particular skills and aptitudes might be best valued.

Services in Financial Services

What’s also very important is that there’s a whole service industry aimed at the financial services sector. These would be termed ‘vendors’ and they include software firms, outsource services providers, technology hardware firms, data vendors and industry collaboratives such as SWIFT and the like. This service industry needs to understand how the system works in order to be able to provide support services to it. In fact, in many ways, the future of the financial services industry starts in the service industry to it. That’s where many (but not all) of the new ideas come from, partly because of the necessarily slow and conservative way the big organisations work. Bitcoin did not originate in financial services. It was/is a disruptive technology that the more traditional firms are having to react to.

Benefiting from a degree

So now, we’ve got a slightly better perspective on what ‘financial services’ might encompass, two things should be obvious. First is that there are indeed areas where a degree will be the sine qua non of getting in (although I’d point out that Latin is a very infrequent requirement – sic). Second is that there are numerous areas where a degree is not a differentiator for the characteristics needed for a job. A degree merely indicates up to two things – that you have acquired a certain body of knowledge and you have, in principle, learned how to learn. The former might, if you’re lucky, be relevant to the role you’re looking at and get you further up the interview ladder. The latter is way more important.

‘Making it’ in Finance

I guess the question is mainly aimed at those who do not have a degree, which brings me to my next point. While an awareness of the industry’s real scale and scope is important, you need to understand that historically the industry model, in volume terms, is based on a large proportion of human beings either doing manual work with paper or manual work with computers – but the majority of it is administrative in nature. Over 80% of all the corporate actions events in the world (like paying dividends or reclaiming tax) still involve physical paper. The largest resource in most firms is the reconciliations function which is trying to figure out why the system didn’t work and how to fix each individual problem one at a time. You don’t need a degree for that; you need oodles of patience, a creative mind and enormous attention to detail. It takes an entire layer or layers of management to control all this and you don’t need a degree for that either, you need people skills, understanding, empathy as well as character, persuasion and the capacity for vision.

Don’t get me wrong. I have an honours degree (in materials science), yet I’ve apparently become one of the four top subject matter experts in the world on international withholding tax. For me, it wasn’t about the degree, it was about drive, desire and interest. My blog ‘Don’t let your Degree get in the way of Your Career’ is one of the most popular, valued and commented on blogs at my University Alumni LinkedIn site. There are some occasions where a degree is actually not the silver spoon you might hope for. According to my employer, I got my first job out of university despite my degree, not because of it.

So the fact is that if you really did need a degree to get into financial services, the industry would collapse instantly due to a lack of people. The issue for the industry is awareness and aptitude not degrees.

Training for Finance

This problem has become really serious in some parts of the world. In South Africa for instance, they have realised that due to their demographics and history, they face a major recruitment problem similar to the ageing population problems of other countries. There aren’t enough young people that even know about financial services to want to get into it. So, Monica Singer, CEO of the South African central securities depository, Strate, set up an education and training portal so that young South Africans could find out enough about financial services to figure out whether they could find a career in it. There are training modules, handbooks, articles, video clips, interviews and even exams. Bloomberg also has an interesting site that tries to help you figure out if you have the right aptitudes.

Future of Finance

It is true however that the industry is changing faster today that I have ever seen it change. Regulation, risk, standardisation, efficiency transparency and automation are keywords. So, while it’s true that many areas are downsizing to become more efficient, they are at the same time desperately seeking new talent with the interest, awareness and aptitude that can help them be more efficient.

So now perhaps the question is a bit clearer, the answer however, is still the same – no, you don’t need a degree to get into financial services.

Image Credit: Will Folsom

Ross McGill

Ross is the founder and chairman of TConsult. He has spent over 26 years working in the withholding tax landscape with companies developing tax reclaim software and operating outsource tax reclamation services.

Ross not only sees the big picture but is also incredibly detail oriented. He can make even the most complex issues simple to understand. He has authored 10 books (including two second editions) on various aspects of tax, technology, and regulation in financial services, making him one of the leading authorities in the world of tax.