FundFire – CFA Revamps Exam Curriculum to Include Asset Mgmt Fintech
The CFA Institute has added emerging technologies including machine learning and artificial intelligence (AI) to its curriculum, reflecting the importance of how these new tools are changing the asset management industry. Professionals pursuing the CFA credential will be required to understand the concepts underpinning AI, machine learning, big data, robo-advisors, blockchain and cryptocurrency, according to tweaks announced in September.
The changes, which were driven by industry consultation, will impact the first two of three levels of the charter’s examination process and will come into effect for those sitting exams in June next year, says Barbara Petitt, head of curriculum and learning experience for the CFA Institute.
“We saw a trend emerging. More and more people were talking about AI, big data and providing examples of fintech applications to investment management. We decided to develop content that is really reflecting the current practice of investment management,” she says.
The topics are explored in readings that provide practice examples – such as how blockchain tools record, track and store data, and the broader impact of this technology on markets and financial services. The revamped curriculum also includes an enlarged section on ethics, reflecting the growth of sustainable investing and ethical questions behind use of data, Petitt says.
The changes come as asset managers adopt new data analysis tools to crunch larger, more diverse datasets to fuel investment and distribution decisions.
High-powered data analysis was previously the territory of quantitative hedge funds like Renaissance Technologies and Two Sigma, but has become the mainstay of traditional asset managers like BlackRock, Fidelity and J.P. Morgan Asset Management.
These managers are using more alternative data and are hiring professionals with backgrounds in data science – in addition to developing those skills in-house.
The CFA Institute’s new technology focus reflects the widespread use of these tools in investment management, which span investment teams to middle- and back-office roles to distribution, says David Schumer, a partner at recruiter Calibre One, where he heads up its investment investment management practice.
New tools allow sales and marketing teams to sift through request for proposal responses, track digital marketing campaigns and gauge which topics resonate most with prospects – and tailor marketing approaches accordingly, he says.
“You’re able to use the technology so you can have more productive and targeted conversations – that improves efficiency on the distribution side,” Schumer says.
Other investment management credential providers are also responding to the importance of new technology and data science in the industry.
The Chartered Alternative Investment Analyst Association, which offers the flagship CAIA certification, is preparing to launch a new credential targeting the analysis of alternative data – a broad category of information spanning cell phone geolocation records to satellite imagery.
The group launched a new initiative to develop a Chartered Alternative Data Analyst (CADA) certification, which William Kelly, president of the CAIA Association, hopes will be finalized early next year. The association is in the process of forming a new group to administer the credential that will be affiliated with the CAIA Association, he says.
“We’re trying to fill the gap between traditional analyst and data scientist. We think there’s a gap that should be
filled by a credential,” he says.