Peaks and valleys in the global financial system are challenging for the uninitiated to navigate. For example, the United States experienced 13 economic recessions from 1933 to 2020. Financial experts provide clarity about market trends and opportunities to help their employers navigate during the highs and lows.
St. Bonaventure University School of Finance faculty member Dr. James Mahar agrees: “Finance is integral to everything. Whether business, government, or even charities and NGOs. Wherever the world’s problems, the solutions rely on finance.”
Prospective financial professionals may wonder how they can prepare for the field’s interconnected nature. The Master of Finance vs. MBA debate emerges from the question of which degree is better for long-term success. MBAs with finance concentrations foster the breadth and depth of knowledge necessary for the present and future.
Finance Binds Everything and Everyone Together
Everyone reading this post knows that finance is a key consideration in making most daily decisions. Your checking account, savings, and loans are on your mind as you work or spend time with family. Now imagine how similar concerns by seven billion global residents influence the financial world.
Personal financial tools produced $17.82 trillion in bank deposits in the United States during the fourth quarter of 2020. U.S. commercial banks reported $2.5 trillion in commercial loans in April 2021. These loans went not only to national and international firms but small businesses serving their communities.
Publicly traded companies and shareholders traded $531 trillion on American exchanges during the first four days of June 2021. Stock exchanges in the U.S. are the largest in the world but they only represent 55% of total market value. This tremendous flow in value is part of a complex global system navigated by financial experts.
MBAs specializing in finance possess the comprehensive knowledge necessary to make sense of this system. They also know how the public sector and non-profits factor into this equation.
Finances in the Public Sector
Financial professionals may not think they will interact with governments during their day-to-day work. Federal, state, and local governments are deeply ingrained in the financial sector beyond their regulatory duties. From libraries to public safety, governments rely on bonds and loans to finance projects.
The federal government has a broad range of financial tools to fund its operations. These methods for covering expenses include:
- Adjusting tax rates to cover expenses
- Issuing bonds to cover gaps between budgeted and real expenses
- Increasing print orders for currency to expand cash supply
State and local governments are unable to print their own currencies. They are left with taxation and bond issuance to achieve balanced budgets. Newly issued municipal bonds alone totaled $119.7 billion in the first five months of 2021.
MBAs work with financial firms that issue municipal bonds throughout the U.S. Top MBA programs also train future financial leaders to evaluate how trends like increased federal debt impact their customers.
Non-Profit Financial Management
Non-profit organizations require expert financial management due to strict requirements set by state and federal law. The National Council for Nonprofits lists reasons why non-profits need clear financial direction including:
- Properly reporting compensation and expenses to donors;
- Prevent conflicts of interest by decision makers;
- Comply with whistleblower laws;
- Simplify the independent auditing process.
U.S.-based charities received $470.73 billion from individuals and corporations in 2019. These funds not only finance operations but represent obligations for proper management. Financial analysts and managers with MBAs can balance these obligations with long-term strategy for non-profits.
Solutions to the World’s Problems Require Finance
An interconnected financial system can be trained on the biggest problems facing the globe today. Companies are increasingly looking for ways to achieve economic benefits and social good through social impact investments. MBAs use their advanced business and finance skills to benefit all stakeholders in social impact projects.
Challenges facing people around the world are only solvable if money is available. Ipsos surveyed 19,000 respondents in 28 countries about their concerns. The following concerns require government, non-profit, and business interventions made possible by financing:
- Poverty and social inequality (34%)
- Unemployment (31%)
- Crime and violence (30%)
- Financial and political corruption (30%)
Consulting firm FSG studied how corporations can solve global problems without relying on traditional business methods. This research found a five-step process that leads to success for social impact projects:
- Identify hotspots for social impact investments
- Build local teams with the power to make local decisions
- Connect with local influencers and organizations
- Create a blueprint for social impact
- Fund the blueprint’s components and adjust based on local feedback
FSG’s template for social impact financing applies to specific areas of need like water access and connectivity infrastructure. Targeted projects throughout the world can solve persistent problems while creating value for investors. MBAs can identify opportunities for social impact investments overlooked by competitors.
CEOs Sharpened their Skills in MBA Programs
The MBA has been a mainstay of the business world for more than a century. The degree’s professional currency makes it an essential credential in the finance world. MBAs work in the upper echelons of the business world because they’ve learned to see the big picture.
Kimberly Whitler at the University of Virginia studied the educational backgrounds of Fortune 100 CEOs. Fifty-four percent of CEOs held a graduate degree. The degree breakdown of executives who went to graduate school is:
- MBA (59%)
- Master of Arts or Science (21%)
- JD (15%)
- Ph.D. (5%)
The largest businesses in the world are led by CEOs with MBAs. Walmart’s Doug McMillon, Apple’s Tim Cook, and Anthem’s Gail Boudreauz are among the most notable graduates of MBA programs. These success stories offer a compelling reason to choose MBA in the Master of Finance vs. MBA debate.
MBA Programs Produce Dynamic Professionals
The business world is not only complicated and interconnected; it is constantly changing. New technology, market disruptions, and changing consumer interests require agility by companies. MBA programs teach enduring skills that fulfill today’s expectations and tomorrow’s potential.
The World Economic Forum studied how recent challenges like COVID-19 impacted global businesses. “The Future of Jobs Report 2020” concluded that in-demand skills will change by 2025. By this time, businesses across all sectors will expect employees to be skilled at:
- Analytical thinking and innovation
- Active learning
- Complex problem-solving
- Critical thinking
- Creativity and originality
Opting for an MBA after considering the Master of Finance vs. MBA debate anticipates this global shift. You learn how to apply best practices and ingenuity to real-world problems from experienced professors. MBA programs are shaped by what employers expect now and in the future.
Combining In-Demand Skills with Strategic Thinking
Financial analysts, managers, and consultants can look to chief financial officers (CFOs) for guidance on how to train for the future. PricewaterhouseCoopers (PwC) surveyed 182 CFOs about their role in business success. Respondents identified the following functions as part of their portfolios:
- Establishing finance as a business partner to the business (47%)
- Incorporating intelligent automation (41%)
- Reducing cost as a percentage of revenue (39%)
- Advancing goals for diversity and inclusion (24%)
- Increasing investment in compliance functions (23%)
These results show CFOs recognize how finance integrates into all aspects of business operations. PwC summarized this trend:
“As CFOs lead the charge toward growth, they have the opportunity — and are uniquely qualified — to play a more active role around strategy, beyond the tactical applications of the finance function...Driving transformation and the enterprise agenda puts CFOs in a position to help drive change across the organization and shape the post-pandemic business model.”
MBA Graduates Earn Premium Salaries
Firms around the world offer substantial compensation for professionals with dynamic skills and global mindsets. The Master of Finance vs. MBA discussion eventually centers on which degree yields the best long-term return. An MBA with a finance concentration reigns supreme when looking at salary averages across high-level positions.
PayScale reports an average salary of $100,231 for professionals with MBAs in finance. The same site lists a $79,393 average salary for Master of Finance holders. A 21% salary premium for MBAs offers a great incentive to choose an MBA in finance.
We can look at averages for specific finance positions to emphasize the MBA salary premium. The salary differentials listed below lean heavily toward MBAs in the Master of Finance vs. MBA debate:
- Finance Manager: $102,000 for Master of Finance, $105,000 for MBA
- Finance Director: $134,000 for Master of Finance, $138,000 for MBA
- Vice President of Finance: $140,000 for Master of Finance, $147,000 for MBA
- CFO: $147,000 for Master of Finance, $164,000 for MBA
The Bureau of Labor Statistics (BLS) projects a 5% growth in financial analyst jobs from 2019 to 2029. An estimated 10% growth in financial management positions in the same period shows the growing need for financial leadership. Completing an MBA in finance allows you to fill this demand while pursuing a fulfilling career.
Become a Finance Leader at St. Bonaventure University
A top-notch MBA program from a leading university lays the Master of Finance vs. MBA debate to rest. St. Bonaventure University’s online MBA in Finance prepares graduates to tackle the next generation of financial challenges. This AACSB-accredited MBA program fosters collaboration among global students and faculty to solve real-world business situations.
The Master of Finance vs. MBA discussion hinges on a university’s curriculum. The online MBA in Finance establishes foundational knowledge on topics like organizational behavior and accounting practices. This graduate program builds skills for a successful finance career through advanced courses in:
- Behavioral Economics
- Managerial Economics
Finance professionals know the importance of return on investment. St. Bonaventure University represents a great value for online MBA candidates. U.S. News & World Report ranked the university No. 6 in Best Value Schools for 2021.
Take the next leap in your finance career with an Online MBA in Finance from St. Bonaventure University.