Banking hubs maintain their pace despite the shocks

Kevin Guo decided where he wanted to pursue his business studies after his parents returned home to Guangzhou, China from a 10-day vacation in New York in 2010.

“They came back with a postcard from Times Square for me and told me that New York was so vibrant and so full of talent,” Guo recalled. “I knew then that I had to go.”

He arrived on a student visa to finish high school in Staten Island nine years ago, securing a place at New York University in Greenwich Village for his bachelor’s degree in economics and math. Gao then went to Columbia Business School in Manhattan for a master’s degree in financial engineering. He has just graduated and is about to join Morgan Stanley as an equity trader.

“I feel very honored to be here,” he said. “When I arrived, I didn’t have strong family ties here, but I managed to accomplish all of that. I’m living the American dream.

© Pascal Perich for the FT

The four-decade course of globalization is currently in danger of being reversed with the rise of geopolitical divisions, notably those caused by the war in Ukraine, US tensions with China and the UK’s exit from the EU. Pandemic shutdowns have also made it harder for graduate students to take courses abroad. However, the lure of global banking capitals remains strong for those seeking a financial education.

Business school students’ favorite study destinations have barely changed in the past two years, according to data compiled by the Graduate Management Admission Council, the administrator of business school entrance exams.

Despite Brexit being fully implemented, the percentage of students choosing to take courses at a UK business school – which in most cases means London, according to GMAC – fell from 7.9% in 2019 to 8.8% last year.

What has changed is the proportion of students choosing to study closer to home, according to Tim Mescon, executive vice president of accrediting body Association to Advance Collegiate Schools of Business (AACSB). This has happened even at some of the most international schools in the world, with the most geographically diverse student populations, he notes.

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The Cranfield School of Management in the UK is in our ranking of postgraduate courses in finance

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UK nationals are a small minority on London Business School’s full-time Masters in Finance degree course but in 2022 they have risen from 4-6% thanks to growing class size, from 123 in 2021 to 132 This year. Students from Southeast and East Asia made up around a third of the class in 2021, but only a quarter in 2022.

The strongest regional growth at the school was among students from the Middle East and Africa, whose numbers rose by a third year-on-year.

“The pandemic has given many business schools an opportunity to boost the depth, value and impact of their master’s programs in the national markets they serve,” says Mescon.

The Frankfurt School of Finance and Management benefited from lockdown rules that prevented German students from traveling abroad to study. But demand is as strong this year as it is in 2021, even after restrictions are lifted. That’s because of the city’s growing importance to Europe’s financial services industry, according to Nils Stieglitz, the school’s president and chief executive.

“Frankfurt has strengthened its international profile and [its] the situation has improved thanks to Brexit,” says Stieglitz. “Big banks like Deutsche and Commerzbank are finally back on the path to growth and creating jobs. We also benefited from regulators moving to Frankfurt due to Brexit.

“The big win for us in this area was the placement of the International Sustainability Standards Board here. Many European banks have also moved their European headquarters to Frankfurt due to Brexit.

Students walk past the Frankfurt School of Finance and Management.  A man on a bicycle also passes.
Students walk past the Frankfurt School of Finance and Management © Alamy

International financial hubs have inherent advantages over other cities, such as a critical mass of employers able to offer higher salaries, which creates a virtuous circle of applications for top talent. Neither the pandemic nor tensions in international relations have broken that, according to Dionisis Philippas, associate professor and head of the MSc in International Finance course at ESSCA in Paris.

“Being a financial hub takes years and neither the pandemic nor Brexit will change the major European hubs,” says Philippas.

According to Soon Huat, program director, Singapore Management University saw nearly a record number of applicants for its Masters in Applied Finance program this year, helped in part by students from Pakistan and Bangladesh who chose SMU rather than schools in the UK.

“For the South Asian market, we are quite attractive,” he says, noting that the financial center has benefited from growth in India and China, and was a good alternative for prospective students in South Asia when states United States and the United Kingdom have locked down.

“Asia is the fastest growing region in the world and Singapore’s proximity to economically growing markets such as India and China is one of our key selling points,” observes Huat. “Singapore is so small and multiracial [that] there are plenty of networking opportunities if you come to SMU.

Students walking along the concrete pavement in front of Singapore Management University
Students walking along the concrete pavement in front of Singapore Management University

Schools in cities not traditionally strong in financial services are finding ways to attract students to their Masters in Finance courses by specializing in teaching new skills for the digital age of banking.

Miami Herbert Business School is trying to position itself as a premier center in cryptocurrency education.

“We’ve increased the size of our business technology faculty, and our entrepreneurship faculty is also crypto-savvy,” says John Quelch, the school’s dean. “We are seeing an increase in students applying for Miami Herbert graduate degrees who are interested in crypto and want to establish their network in Miami in order to move here full-time.”

Not that it’s about highly ranked schools in traditional financial hubs. The number of applications for Columbia Business School’s Master of Financial Engineering course has increased by 20% this year.

Course director Harry Mamaysky attributes this to a mix of New York’s strong job market, highly multicultural student body – which makes people feel at home no matter where they come from – and the school investment in new on-campus facilities.

As a freshly graduated student from Columbia, Guo expects to work in New York for several years.

“This city has so many talented people and what I found was that a lot of my classmates were constantly pushing themselves to reach the next level,” he says. “This competitiveness rubs off on you and pushes you to achieve new goals.”

Guo thinks he could then see his career move around the world to other financial centers now that he has completed his financial education. “I just want to make more money in the future, so I’ll just follow the money.”

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