Business Analyst vs Financial Analyst: How They Differ

Over the past few years, the modern world has seen an exponential hike in the number of businesses – irrespective of their size – increasing competition in the market. Naturally, companies are looking for professionals who can analyse their data and present solutions to any problems. Such professionals are known as Analysts. Due to the specific problems every industry has, Analysts can specialise in several areas, such as Business Analyst vs Financial Analyst, to name a few. 

According to Glassdoor, a Business Analyst in the UK, on average, earns £48,806, while a Financial Analyst earns £46,788 per annum. Before pursuing any of the two careers, you must understand their differences. In this blog, we give a detailed comparison between Business Analyst vs Financial Analyst, as well as their respective skill requirements and responsibilities. Read this blog and explore insights on Business Analysts vs Financial Analysts, including their key differences, skills, and responsibilities 

Table of Contents 

1) Who is a Business Analyst? 

   a) Skill requirements 

   b) Responsibilities 

2) Who is a Financial Analyst? 

   a) Skill requirements 

   b) Responsibilities 

3) Business Analyst vs Financial Analyst: Key Differences 

4) Similarities between Business Analyst and Financial Analyst

5) Conclusion

Who is a Business Analyst? 

A Business Analyst is a professional who helps organisations analyse their business activities, products and services to help improve the existing processes and services. In simpler terms, they collect and analyse the organisation’s data resources to find the best business solutions and helps companies make critical business decisions. They also analyse the current market trends and help the organisation get used to the latest market changes or trends. In short, they are responsible for developing various cost-effective solutions for a specific organisation. 

Skill requirements 

The following are the Skills for a Business Analyst: 

a) A strong grasp of statistics, its formulae and concepts  

b) The ability to use reasoning and logical thinking skills to make informed decisions  

c) Excellent communication, problem-solving, negotiation and organisational skills  

d) Expertise in platforms such as Microsoft Excel, Tableau and Power BI  

e) The ability to analyse qualitative data and business problems    

Responsibilities 

Such professionals are responsible for ensuring they bring the most informative insights to their organisation. The following are the main Business Analyst Roles and Responsibilities:  

a) Collect and analyse the company’s data and policies, creating a business analysis document to share with the stakeholders.   

b) Find ways to reduce the extra/unnecessary company costs.  

c) Research and understand the current market trends and help the organisation make decisions by anticipating the future and adapting to the recent developments in the market.  

d) Create progress tracking metrics for the organisation’s products and services.  

e) Find ways to cut down the inefficiencies in the organisation’s operations.  

f) Do thorough market research to analyse the company’s competition and find effective business solutions to sustain smooth functioning.  

g) Maintain continuous and clear communication with the organisation’s managerial staff and stakeholders.
 

Who is a Financial Analyst? 

As the name suggests, a Financial Analyst analyse a company’s financial data and spots financial trends that facilitate organisations to make effective financial/investment decisions. Therefore, a Financial Analyst can also branch out as either an Investment Analyst or a Security Analyst. They also help organisations develop various policies to help manage a company’s funds and investments. A Financial Analyst’s primary responsibility is to help the organisation make profitable financial or investment decisions.   

Skill requirements 

In the following points, we highlight the various Financial Analyst Skills one should possess to become a successful financial analyst:

a) A firm grasp of business valuation and financial modelling  

b) Comprehensive knowledge of corporate accounting and finance  

c) A solid understanding of equity research, hedge funds, bonds, securities, etc.  

d) Proficiency in platforms such as Tally, Hyperion, SAP, SQL, QuickBooks, Microsoft Excel and Microsoft PowerPoint.   

e) The ability to deal with quantitative data with strong mathematical skills 

Responsibilities 

A Financial Analyst is responsible for ensuring maximum efficiency and revenue for their organisation. A Financial Analyst must:  

a) Create relevant metrics to identify the company's financial performance.  

b) Draft the company's financial reports and discuss them with the stakeholders. 

c) Analyse and forecast financial trends to manage the organisation's budget.  

d) Keep track of recent investment trends to help the business make well-informed future investments.  

e) Recommend and implement various strategies to improve the company's finances.  

f) Audit the discrepancies and miscalculations in the organisation's existing and future financial statements.  

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Business Analyst vs Financial Analyst: Key Differences 

This blog section will elaborate on the significant differences between the roles of the Business Analyst and Financial Analysts.
 

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Similarities between Business Analyst and Financial Analyst

The previously discussed parameters serve as valuable points of distinction between the roles of a Financial Analyst and a Business Analyst. However, beneath these discernible differences, there exist several noteworthy commonalities that unite both domains. A fundamental similarity lies in the core function they share: Analysis. Both Financial Analysts and Business Analysts engage in the critical task of scrutinising data drawn from various sources. They embark on a quest to unearth inconsistencies and inefficiencies, subsequently working diligently to rectify them.

Another shared objective in both Financial and Business Analysis is the pursuit of broader organisational goals. Both Financial Analysts and Business Analysts are inherently committed to fostering growth within their respective companies. They strive to elevate current operational standards by integrating modern methodologies and cutting-edge tools into their decision-making processes. In essence, their unifying mission revolves around the holistic betterment of the organisations they serve, each contributing their unique analytical expertise to accomplish this overarching aim.

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Conclusion 

All in all, the detailed comparison of the Business Analyst vs Financial Analyst tells us all there is to know about the distinctions between the two roles. The abovementioned comparison clearly highlights the critical differences between the skills required and the responsibilities between the two. It must be noted that while both roles are significant and likely to seal you a lucrative package, it is necessary to make the right career choice between the two. It depends on your area of expertise and specific needs that will help you decide which path is better for you.  

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