Relevance of Mathematics in Banking Industry!

Majority of students preparing for bank exams know importance of Mathematics for the IPBS PO, SBI PO or other exams. But, not may are aware the mathematical skills can also come in handy throughout the career of banking professional. Read on find out more about it!

Created On: Mar 16, 2018 18:30 IST
Relevance of Mathematics in Banking Industry
Relevance of Mathematics in Banking Industry

If you are an aspirant looking to build a lucrative and rewarding career in banking sector, Mathematics is one area that you should focus upon. Apart from being an amazing asset during the recruitment examination phase, through knowledge of Mathematical concepts and calculative math skills will also come in handy when you begin your career as banking professional.

To exhibit the importance of Mathematics in the Banking sector, we have compiled a few points below:

Daily Accounting Operations: Right from the teller to the branch manager; anyone working in the Banking sector handles large sum of money on a daily basis. Therefore, they have to have the basic arithmetic skills like addition, subtraction, multiplication, division. The calculations involved are centred on debit-credit and account balancing.

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Policy Formulation: Top ranking banking officials have the responsibility of creating a practical and implementable financial policy for the bank that may help the organization reach its goals for the financial year or any predefined time period.

Risk Assessment: Mortgages and Loans form the crux of the banking industry and risk assessment for such cases can only be evaluated using complex mathematical models. Risk assessment is a very important aspect for which banking professional will have to employ complex mathematical skills and models to measure the amount of risk exposure for the organization and deploy counter measure to control the damage.

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Economics: Keeping an eye on contemporary macro actions and trends, in order to calculate and predict the future course for domestic as well as international economy.

Financial Trends & Predictions: This is another very important aspect of the banking industry that completely relies upon mathematics. In order to arrive at credible and actionable predictions for the future; banking professionals may have to rely upon models like Stochastic calculus or Black-Sholes.

Investment Banking: Although relatively new and evolving aspect; investment banking has emerged as one of the fastest growing fields of the banking industry. When it comes to investment banking, professionals have to rely on multifaceted financial mathematics. These may include partial differential calculus, probability, stochastic calculus and others similar concepts.

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Being closely related to finance industry and large -scale economic operations, banking professionals are expected to use their mathematical skills to solve a diverse range of problems as part of their job responsibilities. Be it a simple daily task of balancing of currency drawers to complex tasks like designing a well thought out financial policy for banking operations; mathematics will work to your advantage at every stage of your career.

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