Wall Street needs to find the next generation of economists and traders - and the search needs to start in middle school
- In this op-ed, CME Group CEO Terry Duffy argues that 10 years after the financial crisis, many are still distrustful of the financial services industry and that has an impact on recruitment.
- More needs to be done to gain the confidence of the country's best and brightest to convince them that a career in finance can benefit society at large.
- The industry needs to take educational steps to put the world of finance on the radar of middle and high school students, Duffy says.
On September 28, 2008, the Dow Jones Industrial Average dropped a historic 777 points in a single day, one of many unprecedented events that characterized the greatest economic downturns since the Great Depression. In the decade that has gone by, much has changed. Our economy is experiencing steady - and by some metrics record - growth and the Dow continues to outdo itself on a weekly, often daily basis. Yet, some blowback from the 2008 crisis can still be felt within financial services, particularly as it relates to recruitment. Lingering negative perceptions about our industry have created a reputational challenge that has far-reaching consequences.
Despite the long-running bull market, strong economic expansion and a universal focus on enhancing risk management, the memory of the crisis is still fresh in the minds of a generation of graduates. In many cases, this is fueling a general distrust of the financial services industry.
That distrust is hurting the future of our business as today only 13 percent of MBA grads enter the industry compared with 20% in 2008, according to the Graduate Management Admission Council. Likewise, it is harming consumers, particularly millennials, who according to many press reports, appear to have largely sat out this record market run.
That's why we should use this 10-year anniversary of the crisis not to reflect on the past, but as a reason to focus on further repairing and enhancing the reputation of our industry. In these efforts, we must do more to convey the value of our markets - to both consumers and future candidates alike - and demonstrate how the deployment of capital fuels innovation and growth across industries, while improving the lives of countless people.
Through lending and issuing securities and offering risk management and other investment tools, the financial services industry plays a constructive role in everyday concerns, ranging from home mortgages and car loans, to pension funds and 401ks, to the funding of innumerable infrastructure projects such as the development of schools, bridges and public parks.
Yet none of these projects, which create jobs and drive business growth, are possible without behind-the-scenes financial talent. And that's where we must take steps that will allow us to constantly refresh the recruitment pipeline.
The brilliant minds who will become the next generation of economists, traders, technologists, financial engineers and mathematicians need to hear from us sooner about the positive societal role we play. We need to make a greater effort to gain their confidence and show them how successful careers in finance have the potential to benefit not just themselves and their families, but also society at large.
This process - providing young talent with a correct understanding of financial principles, and the beneficial impact they can have for everyone - should start before college. Currently, only one in five states requires high school students to take an economics class. Exposure to underlying financial concepts such as risk management is limited or non-existent for teenagers, despite the outsized role these concepts play in the global economy as well as people's daily lives. That's a major reason we joined with industry partners in launching an online educational resource that has already helped thousands of U.S. middle and high school teachers explain how futures work in the financial marketplace.
Our industry needs to take other educational steps along these lines to put the world of finance on the radar of middle and high school students. It's only then that we will earn their attention before they begin the next chapter of their lives. By focusing at the grassroots level to communicate the fundamental value we provide, we will help to restore our industry's reputation and attract the financial leaders of tomorrow.
- Terry Duffy is Chairman and Chief Executive Officer of CME Group, the world's largest futures exchange.