Once upon a time, banking was seen as a career for second sons of wealthy families who needed a lucrative but undemanding profession. Theoretically, that all changed with the arrival of complex derivatives products. In reality, plus ca change.
Pian Shu, a professor at Harvard Business School has conducted detailed analysis into the profiles of 3,769 graduates from MIT. Her findings run counter to the supposition that people who go into banking are more intelligent than the rest. In the case of MIT at least, they're not.
Shu found that only 6.5 percent of MIT graduates with top-quartile GPAs went into finance after graduation. Meanwhile, MIT graduates from the bottom quartile were 2.5 times more likely to enter finance than the rest. She also found a strong correlation between an increase in college GPA and a decrease in the probability of entering finance. The better you do at college, the less likely you are to take a finance job.
By comparison, MIT students who pursued careers in science and engineering take 'significantly more courses and earn significantly better grades', starting from the moment they arrive.
So what are future bankers comparatively good at? The chart below explains all.
Extracurricular activities of would-be bankers and would-be scientists and engineers:
Compared to graduates who go into science and engineering, future financiers are far more likely to be involved in frat clubs, sports, and leadership positions of all kinds. Studying, it seems, is not their priority.
Shu's findings didn't extend to the comparatively few female students who went into banking, for whom there were, 'less negative correlations between the measures of academic performance and propensity to enter finance.'
Overall, she found that the students who became finance professionals were also more likely to be a) men (63% vs. 51% for science and engineering), b) Asian American (37% vs. 27% for science and engineering), and c) rich ($15k in financial aid vs. $17k for science and engineering) than the students who pursued scientific or engineering careers.
"Future financiers are likely to have spent more time and energy than future scientists and engineers on social activities in college," Shu concludes.