Data science can be incorporated into financial modeling to help make the assumptions more robust, more accurate, and hopefully closer to an expected reality. Since data science is the study of how to extract information and insights from data (especially using statistics in this case), it can be very helpful for determining assumptions in models and performing sensitivity analysis to measure the range of outcomes as they change.
Data plays a significant role in the finance industry. Many financial services firms struggle to find professionals with expertise in data science, so they increase their spending on sourcing and recruiting top candidates. Professionals who are into data science are proficient in certain tasks such as data mining and analysis. They typically have an educational background in Mathematics, Statistics or Calculus.
As financial institutions lean into the use of technology, professionals with data science expertise need to have at least a basic understanding of Java, C++, Python, and other programming languages used in financial modeling.
CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI’s mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way.
In order to become a great financial analyst, below are some additional questions and answers for you to explore further:
Below is a screenshot from one of CFI’s online analyst training and certification courses, offered 100% online.
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