Provide Students with Better Access to Data, Platforms, and Financial Industry Knowledge
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The Financial Trading Industry is facing a significant and far-reaching challenge, in that it has lost its long-standing training ground for future industry leaders. The move away from the trading floors to trading via computers and automated trading technologies has eliminated the most common chain of knowledge transfer that occurred between industry veterans and newcomers. The result has been to place even more demand on academia to produce work-ready future employees for the Financial Trading Industry.
Even with multiple successful collaborations between business and universities, there is much left to do - starting with the multiple hurdles for universities to overcome in accessing reliable data. The automation and computerization of the field brings with it a need for quick, easy, and free access to real market data to learn new and innovative ways to model financial transactions utilizing that data. Billion-dollar hedge funds can afford to pay full price for access to the data which fuels their trading models, but, too often, non-profit university programs cannot.
Prof. Ehud Peleg of UCLA’s Anderson School says that: “learning to practice data analysis without data is meaningless”, while Prof. Morton Lane, Founder and Director of the MSFE program at the University of Illinois says, "the new Data Analytic techniques of Machine Learning and Artificial Intelligence desperately need full financial data. Students in that area are learning techniques on generic data sets. We will only unleash the power of AI and ML in finance if we get students to study on real data. Financial data is different."
Creating tools and apps which allow student access to real-time data can create not just the next layer of practitioners which plug into the industry as employees, but also create a base layer of people familiar with the derivatives markets to become future customers. But how do we make it easier for said students to access the world of financial markets?
To address the gap, schools need data, platforms, and greater insight into how the industry works:
1. Data Needs:
- Open source data is improving in quality, but students and academic researchers still do not have access to high-quality, granular data with which to test new theories or familiarize themselves with commonly applied theories as an industry professional would in practice. Also lacking is the ability to test theories in real-time against live data, primarily due to the prohibitive costs associated with the data.
- Streamline access to high quality, historical data across all asset classes and time horizons with exchanges offering - easily applied for and quickly granted - data fee waivers for educational programs focused on teaching the next generation of market users.
2. Platform Needs:
- Open source technology provides valuable platforms for researching trading topics and testing trading models. But in practice, most professional trading firms utilize established, front-end trading platforms from highly-regarded industry vendors instead of the software used in the academic setting. Understanding the building blocks of trading systems can provide valuable insight, but not all researchers should have to rebuild the wheel in order to test how those ideas transfer to actual market conditions via the most commonly used front end trading platforms.
- Industry vendors should offer universities and/or students “Educational” versions of their platforms at little or no cost. This can provide the vendors with a large pool of users for feedback and testing, as well as provide some stickiness to their potential future client bases. Limited time offerings such as those provided during sponsored “trading challenges” is a good start, but those should be expanded outside of specified annual windows.
3. Insights into Industry Workings:
- Many careers and job functions in the financial and trading industry are not well known to students. Broad descriptions of “financial analyst”, “trader”, and “banker” accompanied by an adjective do not come close to providing an overview of the jobs available in the industry. Beyond career fairs and internships, the latter of which limits the reach based on employment constraints, the industry should find more and new ways to engage with the next generation. Firms should look to plan events with schools where employees taking a day to meet with students and discuss their careers. Young people are exposed to many industries much more directly than the financial industry, and that needs to change.
- School curriculum outside of specialized programs often focus on theory, equations, and topics that don’t always permeate in day-to-day work. These topics are important, but that doesn’t mean there shouldn’t be an opportunity for specific learning related to more practical topics that can help prepare students for their future careers. The MOOC model and expansion of learning modules in general across industries provides a template for new ways to engage young people on these topics.
- Firms should establish projects to create either learning modules or micro-courses based on their line of business. Certifications could be added to serve as resume material for students.
Sign this petition to invite serious participation and concrete ideas that will provide universities and their students with the solutions to address the gap in data, platforms, and greater industry insights noted above. Let's turn up the heat in asking for further support from industry leading exchanges, vendors, and trading firms to further bridge the gap between industry and academia.
Please add your signature to this petition to highlight how important this is to both sides of the equation. Together, we can make real change and help arm the next generation with the skills they need to succeed.
University program Signees
• Prof. Morton Lane Director, Master of Science in Financial Engineering Program , The University of Illinois at Champaign-Urbana
• Prof. Alex Lau, Dept. of Finance and Accounting, Carthage College
• Prof. Olivier Ledoit, Visiting Professor of Finance, UCLA Anderson School of Management
• Prof. Vadim Linetsky, Professor of Industrial Engineering and Management Sciences, Northwestern University
• Christian Oesch , formerly University of Basel, now Cudera Ltd.
• Prof. Ehud Peleg, Adjunct Assistant Professor of Finance, UCLA Anderson School of Management
Financial Industry Signees
• Joseph Signorelli, RCM-X
• Bobby Schwartz, RCM Alternatives
• Pat McBride, McBride Trading
• Brian Curcio - Rapunzl
• Tara Begeman, Polaris 7
• Dr. Ernest P. Chan, QTS Capital Management, LLC
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