Companies have started to realize the power of data analysis and are now seeking people capable of working with data to help with the company’s business and finance. Business analysts and financial analysts are two such professions. Though they sound similar, they perform different tasks within the company. When we put them head-to-head and compare them in several categories, the differences will become more noticeable.
What do business analysts do? What skills do financial analysts need? If you’ve ever wondered about these and other similar questions, then keep reading.
What Is a Business Analyst?
A business analyst is a professional that uses data to make strategic business decisions. They stand between IT and business and use the insight from data to help notice and reduce the company’s unnecessary costs. They also advise the accounting team on financial transactions and investments and help improve the overall efficiency and productivity within the company.
Business analyst job responsibilities
Business analysts are primarily responsible for finding solutions to the business issues a company might have. They resolve the company’s issues by conducting research, gathering data, and then analyzing it for helpful insight. Some of their many responsibilities include:
- Looking for ways to reduce the company’s unnecessary costs
- Finding ways to decrease inefficiencies
- Reporting on the employees’ performance analysis within the firm
- Analyzing the competition
- Conducting meetings with shareholders and other employees to share information and ideas
- Working closely with the managerial staff
- Applying strategies based on current trends
Education required
There are several undergraduate and postgraduate fields you can pursue to help on your journey to becoming a business analyst. According to research conducted with 118,414 business analysts, the results stated that about 66% of them have a bachelor’s degree, and around 17% have a master’s degree. To begin, a majority of companies require their entry-level business data analysts to have a bachelor’s degree in business administration or a related field, such as accounting, statistics, economics, or computer science. Then, for higher positions, some companies also require a master’s degree in a relevant discipline.
In some cases, companies even require their workers to earn relevant certification. The most common ones come from the Institute of Management Consultants (IMC), Project Management Professional (PMP), and Certified Business Analysis Professional (CBAP).
Skills needed
In agreement with research done on job descriptions for business analysts, results showed that decision-making is the most required skill for this position and many others related to data analytics. This profession also requires an understanding of the processes, workings, and key aspects of the business, understanding of Excel, Tableau, and Power BI, consultative skills, problem-solving, and critical thinking.
Career path & salary
Working as a business analyst is an excellent option on its own and as a first step towards a higher position. In general, most business analysts begin their careers by working in entry-level positions to gain experience. That work experience can help them better understand the industry, and it prepares them for the next step, which is the position of junior business analyst. From there, you can either choose to continue working until you are promoted or going back to studies for a master’s degree so that you can speed up the process.
After a few successful years working as a business analyst, you can get promoted to higher senior positions with more responsibility and control.
The average salary for a business analyst in the United States is $75,933 per year. The entry-level salary is around $54k, and it can go up to $106k for senior positions.
What Is a Financial Analyst?
A financial analyst is also known as a security analyst or investment analyst. It refers to a professional that creates policies for how a company should manage its resources. They also analyze and interpret data about business trends that can affect the company’s investments.
Financial analyst job responsibilities
Financial planning is the main responsibility of financial analysts. They have to analyze current and previous financial data. Then, they use the results they come up with to prepare reports and projections for the future. Other responsibilities include:
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- Finding opportunities for investment
- Identifying current trends in finance
- Recommending strategies for financial improvement
- Helping create company budgets
- Establishing profit plans
Education required
The minimum requirement for the position of financial analyst is a bachelor’s degree. The degree could be in accounting, finance, statistics, business administration, economics, or another business-related field. At times, companies may require their employees to have an additional master’s degree, especially for more advanced positions. You could pursue an Master of Business Administration (MBA) degree to be qualified For senior leadership positions. For an even higher post, you could also enroll in a certification program. A great choice would be the Chartered Financial Analyst certification offered by the CFA Institute.
Skills needed
Although being good with numbers is an essential skill, to succeed as a financial analyst, other skills are necessary too. Some important skills financial analysts need are:
- Critical thinking
- Knowledge in analytical and financial modeling
- Communication and presentation skills
- Organizational and multitasking skills
- Knowledge of the ERP (Enterprise Resource Planning) software
Career path & salary
The career path of a financial analyst usually begins with an entry-level job. After gaining experience in the field and potentially pursuing a master’s degree, they can advance to junior and senior positions.
After the senior financial analyst post, you can get promoted to fund manager and supervise the department of senior analysts. The top positions in this career path are the chief financial officer (CFO) and/or chief investment officer (CIO).
The average salary for a financial analyst in the United States is $72,590 per year. The entry-level salary is around $50k, and it can go up to $390k if you become a chief financial officer.
When it comes to the business analyst vs. financial analyst debate, there is no right or wrong choice. Whichever suits your needs, makes you feel more confident and comfortable is the right path for you.