Psychometric tests are used in finance to screen for potential candidates applying for jobs in the industry.
They help assess candidate skills early on in the hiring process, typically sent to a candidate after their application has been sent.
Jobs you might expect to receive a psychometric test in the finance industry include:
- Financial analyst
- Loan officer
In this article, we'll explore the top 10 psychometric tests you should be preparing yourself for when it comes to applying for roles in the finance industry.
10 Psychometric Tests Used In Finance
We've narrowed it down to ten popular finance tests based on the recruitment process of some of the largest financial institutions in the world.
The most popular tests in finance are:
- Numerical reasoning
- Financial reasoning
- Spatial reasoning
- Abstract reasoning
- Verbal reasoning
- Situational judgement
- Personality assessment
- Inductive/deductive reasoning
- Diagrammatic reasoning
- Logical reasoning
A numerical reasoning test is a type of assessment that measures a person's ability to reason quantitatively.
The test format usually consists of a series of math problems that the test taker must complete within a set amount of time. The questions can be in a variety of formats, including word problems, data interpretation, and basic math skills.
The purpose of a numerical reasoning test is to measure how well a person can understand and solve mathematical problems. This type of assessment is used in finance to identify candidates who are strong in math and who can think critically and solve complex problems.
When it comes to financial decisions, individuals must be able to think logically and critically to make the best choices in financial roles. That's where a financial reasoning test comes in.
This type of assessment evaluates how well a person can think through financial scenarios and arrive at logical conclusions. The questions on these tests can be quite complex, so test-takers must be able to reason clearly and effectively.
There are a few different formats that Financial Reasoning tests can take. Some are strictly multiple-choice, while others allow for essay responses. The questions on these exams can cover a variety of topics, such as investment planning, budgeting, insurance, and taxation.
The purpose of a financial reasoning test is to measure an individual's ability to think critically about financial situations and make informed decisions.
Spatial reasoning is the ability to think about and understand spatial relationships.
It is important for activities such as diagram reading, navigation, three-dimensional visualization, and problem-solving. Spatial reasoning tests measure an individual's ability to understand and solve problems that involve spatial relationships.
The most common format for a spatial reasoning test is a paper-and-pencil task in which the test taker is asked to identify the location of a target object or figure on a grid or diagram. Some tests present two or more objects and ask the test taker to indicate which object belongs in a specific location. Other tasks may require mentally rotating objects or copying shapes.
The skills that are measured by spatial reasoning tests are important for many careers. Individuals who are good at these tasks may be more likely to succeed in finance roles and it help employers assess how you cope under time pressure when trying to problem solve.
Abstract reasoning tests are a type of intelligence test that measures your ability to think logically and abstractly. They usually take the form of puzzles or questions that require you to find patterns or relationships.
Abstract reasoning tests are used by employers to assess candidates for jobs that require critical thinking skills.
The format of the test can vary, but most commonly it consists of a series of questions that must be completed in a set amount of time.
The purpose of the test is to measure your ability to think logically and abstractly, which are essential skills for finance roles that require critical thinking.
A verbal reasoning test is a type of assessment that measures a person's ability to understand and use written language.
The test format can vary, but it typically includes questions that ask the test-taker to read a passage or series of sentences and then answer questions about it. Verbal Reasoning tests are used by the finance industry to measure a person's reading comprehension and critical thinking skills.
One reason that verbal reasoning tests are used is that they can measure a person's ability to think critically and analytically. In addition, these tests can help identify potential problems with reading comprehension.
Situational Judgment tests (SJTs) are a relatively new type of test that is growing in popularity for use in selection processes.
SJTs are designed to measure how test-takers would respond to various hypothetical workplace scenarios. The format of an SJT usually consists of a series of questions that ask the test-taker to choose the best response from a set of four or five options.
The use of SJTs in selection processes is growing because they are a good predictor of job performance. In addition, SJTs can be used to assess a wide range of competencies, such as problem-solving, decision making, and teamwork - important skills needed in finance roles.
Personality assessments are a type of psychological testing used to measure aspects of an individual's personality.
The most common type of Personality Assessment is the self-report inventory, which asks test-takers to respond to questions about their own behaviour.
There are many reasons why employers might send a Personality Assessment test to an applicant. For example, the assessment shows key personality traits and insights for HR teams to assess work ethic and cultural fit.
Deductive reasoning involves making an inference based on widely-accepted facts or premises compared to inductive reasoning which is making an inference based on observation.
An inductive reasoning test typically involves a series of questions that ask the test taker to identify a pattern or relationship in a set of data. The questions may be presented in a table, matrix, or graph format.
Inductive reasoning tests are used by employers to assess the ability of job candidates to identify patterns and relationships in data.
Deductive reasoning tests are used to assess a person's ability to think through a problem and find a logical solution. The test format can vary but often consists of a series of questions that require the test taker to identify the logical flaw in a given argument.
The purpose of these tests is to measure how well an individual can reason logically and identify incorrect assumptions. Employers use deductive reasoning tests to measure problem-solving skills and determine if a candidate is a good fit for a position that requires critical thinking skills.
A diagrammatic reasoning test is a psychometric test that measures the ability to understand and reason with diagrams.
It is most commonly used in the selection of finance applicants for roles which require strong mathematics. The test format is typically multiple-choice, although some versions are fill-in-the-blanks.
The purpose of the test is to measure the ability to understand and reason with diagrams, which is a key skill for success in many financial roles.
Logical Reasoning tests are tests that measure a person's ability to think critically and logically.
The format of these tests usually consists of a series of questions that require the test taker to analyze information, identify patterns, and solve problems.
They are used by employers and schools as a way to measure a person's reasoning skills.
The most common reason for taking a Logical Reasoning test is to assess whether or not someone is suitable for a financial role that requires strong analytical skills.