As the financial sector has evolved to become ever more complex, data analysis has become a key branch of the field and is only continuing to grow. This has given rise to the indispensable role of quantitative analysts, often nicknamed “quants,” who research and interpret the complex data that financial institutions can use to understand the market and make key decisions that can take advantage of market opportunities as well as accounting for areas of risk.
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Because their work is so skilled and so valuable, quantitative analysts are held in great esteem in the world of finance. They are considered by some to be “the gurus of the financial market,” finding opportunities and warnings through statistical research that most are not able to see. As financial markets grow more complicated and the field of data analysis continues to evolve, quantitative analysts are only becoming more and more valued by their employers, with salaries to show it. This is true even of entry level quantitative analyst salaries, which are higher than many other career tracks even within the finance sector.
If you have an aptitude for data and mathematics as well as an ability to work well under high pressure, the coveted role of a quantitative analyst could be the perfect fit for you. Read on to learn more about how quantitative analyst jobs work as well as the qualifications required to become one.
What is a Quantitative Analyst?
Quantitative analysts design and implement complex mathematical, statistical, and algorithmic techniques to help finance and investment banks evaluate different aspects of the market, from financial instruments to market participant behaviors. They provide analysis that translates complex data into actionable guidance for these financial institutions, normally with regards to risk management, market pricing, and portfolio management. They can also use their insights to help develop trading strategies.
Quantitative Analyst Qualifications and Skills
Quantitative analysts are expert mathematicians who draw from a variety of strategies to develop their insights. Though few financial institutions specifically require a particular certification, nearly every quantitative analyst holds a graduate degree in fields such as mathematics, statistics, computer science, or finance. As the need for quantitative analysts grows, some universities have begun to offer Master’s in Business Analytics programs that focus on providing the specific training these jobs require.
Mathematical and statistical techniques used by quantitative analysts include:
- regression analysis
- data mining
- game theory
- linear programming
- probability
- simulation
There are other technical skills that quantitative analysts are required to know, including many computer programming skills. Industry standards include the following:
- C++ programming language (this is considered by many to be essential)
- Python, SQL, Java, .NET, VBA
- Statistical analysis software packages such as MATLAB, SAS, S-plus, or R
- Advanced skills in Excel
Finally, excellent writing and communication skills are required, as quantitative analysts are responsible not only for researching the market but also for translating their findings to be understood by their colleagues. Because quantitative analysts are dealing with such difficult material, it’s not enough to be able to understand the data yourself – you also must be able to translate that information and insight so that others on the team can run with it.
Quantitative Analyst Job Responsibilities
Highly valued players in the financial sector, quantitative analysts work in a variety of settings including commercial and investment banks, wealth management firms, and hedge funds, as well as tech companies. There are also many quantitative analyst jobs at insurance companies, accountancy firms, management consulting firms, financial software companies, and other related businesses.
Because there is such a range of quantitative analyst jobs as well as industries that require them, their responsibilities can vary greatly. A statistical analyst analyzes and synthesizes large databases to provide clear yet detailed research from which an organization can easily assess the economic conditions. A quantitative risk analyst focuses their research on avoiding risk, keeping a close eye on the evolving economic situation to ensure that their company stays on track. Model validation analysts review the existing models by which quantitative analysts are making their evaluations to ensure that companies are still using the best-in-class option to assess the market and their place in it.
Outside of the financial sector, there are many needs for quantitative analysts to process complex data, including positions that review the results of surveys and polls to inform a business’ marketing decisions. There are also quantitative analyst jobs in the healthcare field, where quants work alongside medical professionals to understand important medicine-related statistics, including monitoring the results of treatments and the efficacy of medical equipment.
What are Quantitative Analyst Salaries?
Because quantitative analysts provide such invaluable knowledge about the trajectory of the market, they are paid well for their highly skilled work. The US Bureau of Labor Statistics reports that the average quantitative analyst salary in 2021 was $103,020, breaking down to about $1,981/week or $7,924/month. In big cities, where the cost of living tends to be higher, the average quantitative analyst salary is closer to $119,000/year. At the very highest end of the range, quantitative analyst salaries pay in the ballpark of $175,000/year.
The New York Times reports other perks of a quantitative analyst career, pointing out that many financial institutions are beginning to offer “Silicon Valley-style perks” to entice analysts who might be drawn to work in the tech sector instead. If the stellar quantitative analyst salaries weren’t enough, these additional lifestyle benefits may sweeten the deal for those considering finding employment elsewhere.
Entry Level Quantitative Analyst Salaries
Though becoming a quantitative analyst requires a great amount of work, the rewards of the job tend to begin as soon as one gets started. Entry level salaries for quantitative analysts are high, with ZipRecruiter reporting an average entry level quantitative analyst salary of $78,525.
Clearly, quants have skills that financial institutions want to make the most of, which is why entry level salaries for quantitative analysts are set to entice burgeoning talent to enter a business at the start of their careers.
Quantitative Analyst Job Growth Rate
One of the most attractive parts of a quantitative analyst career path is the fact that the job market for quants is growing rapidly. This trend dates back to the 2008 recession, after which many financial institutions began to look to new resources to gain a better grasp on what was happening in the markets. As the years have gone on, respect for the insights of quantitative analysts has only grown. The Bureau of Labor Statistics predicts a growth rate of 6% for quantitative analyst jobs over the next 10 years, meaning that there will continue to be more opportunities for quantitative analysts in the financial sector and beyond.
How to Become a Quantitative Analyst
Most quantitative analysts get their start after acquiring an advanced degree which provides the foundational knowledge in statistics, computer programming, and business needed to become an expert. It can also be extremely useful for an aspiring quant to build up relevant work experience that gives exposure and training in their chosen field, whether through an entry level position at the organization in question or through a “quant internship.” Since entry level quantitative analyst salaries are high, this investment of time can be remunerative even while it is ongoing.
Finally, once one is on the path to become a quantitative analyst, it is very useful to specialize. Since there are so many different quantitative analyst jobs with a variety of roles and responsibilities, picking a focus early can help one quickly build the expertise and experience needed to target their dream job. Those who are well-prepared can use the graduate school experience to zero in on a particular branch of quantitative analysis so that they can hit the ground running as soon as they’re ready to hit the job market.
Taking the Next Steps to Become a Quantitative Analyst
If you excel at statistical modeling and data analysis, a quantitative analyst role could be the perfect career path for you. Those who have a Bachelor’s degree who are ready to take the next steps to become a quantitative analyst should take a look at our list of the best business analytics programs by state. Those still looking to earn their Bachelor’s degree can take a look at our list of the best business analytics schools in the country.