With regulatory changes, a lot of roles have been related to model review. Looking forward, digital is expected to be a strong area of growth.
Contract hiring was incredibly quiet throughout July and August which isn’t hugely out of the ordinary, but it was even quieter than usual this year. In contrast, things picked up in September and we saw an increase in areas such as credit analysis and model review. The general feeling, and what clients have been saying for the duration of 2018, is that hiring will pick up further towards the end of the year.
Many of the larger and medium sized organisations are hiring permanently in preference of contractors. Concerns are starting to creep in for contractors over the changes to IR35 which might have a sweeping change to the way contractors operate. So far we are awaiting announcements on this from the government, but as this potential change coincides with the with Brexit deadline of March 2019, there could be the possibility that it gets pushed back.
Due to regulations, a lot of regulation jobs have been related to model review. This can be across many types of models, not just market and counterparty credit risk, but also wholesale credit such as PD, LGD, EAD models, funding models, compliance models and even liquidity risk models which could be an area of real growth in 2019. We also expect more FRTB hiring around PnL attribution and portfolio full reveal, but less around expected shortfall and liquidity time horizon calculations.
Within change management for risk, there has been more of a focus on data migration and data lineage roles. Some have been relating to BCBS239, however they’re mainly for Brexit changes across credit, market and liquidity risk. Other areas of anticipated growth are around digital risk where the roles are likely to border on a hybrid of risk and IT.
Asset Managers and Investment Banks have notably been hiring operational risk jobs, looking for professionals with experience within front office and 1LOD. The controls within these institutions are a paramount concern and they can afford neither the monetary nor reputational loss. There will continue to be growth and recruitment in these areas as teams are expanded and new positions are created to fill the gap in this market.
It has never been common for professionals in operational risk jobs requiring cyber or technology experience, however, more and more clients are indicating that it’s desirable should the role have exposure to cyber security or technology related information - it is likely that operational risk jobs and technology will merge to some extent.
A number of our clients have been focused on their expansion plans outside of London and the UK and they are therefore actively building experienced Risk teams in various locations including Dublin, Frankfurt and Paris.
Quant candidates relating to model development and validation have been highly sought after. Regulatory model development is driving the market and there is likely to be the need for SOx focused candidates towards the end of the year, as well as those to fill regulation jobs. Other requirements could be an increase in third party risk across vendors with a focus on contracts, systems implementation and ensuring the vendor’s systems are fit for purpose.
The quant space has been active, with a particular increase in quantitative risk opportunities. This is hardly surprising given risk analyst positions progressively expect candidates to have strong quantitative skills. Quantitative Analyst positions focusing on analysing large data sets and developing pricing models were the most active. Python programming continues to be a sought after skill but PhD candidates in a STEM field with 1-3 years’ experience in a quantitative research position are still the most popular - their PhD displays a continued desire to learn which is important in an industry that is rife with advancing technologies and where new methods of research are frequently introduced.
There has been an increased demand for experienced leverage finance candidates with a generalist portfolio - London based candidates have been requested to move to locations including Dublin, Paris and Frankfurt. Whilst this is largely Brexit driven, these expansion plans present unique opportunities to those open to moving abroad and wanting to improve their career prospects.
Model development - A really tough area that usually requires front office experience. Rates: £800 - £1000 per day.
Model validation - SR11-7 is a big driver of model validation as there are more models being created for regulatory purposes and more models need validating. Roles are across credit risk, market risk and particularly xVA and pricing models. Rates: £750 - £950 per day.
Regulatory project management (Brexit) - Many professionals want to get involved with Brexit and this could be their only opportunity. Could be across any area within risk, looking at effects on the bank relating to whatever its major focus is. Rates: £700 - £850 per day.
Head of Market Risk (Dublin) - Banks have been looking at European locations to continue passported trading activity and ensure they preserve their clients’ ability to seamlessly transact with them. A strong markets background is imperative for this role. Salary: €280k.
Director, Model Risk - Large Model Frameworks - Responsible for working with other teams to establish a framework to address validation and governance of material processes and performing overall validation and approval of large model-based frameworks. Knowledge, understanding and experience in the implementation of regulators’ requirements on model risk management are a necessity. Salary: £200k.
The contract market isn’t following too much of a pattern due to the greater focus on permanent hiring. Anything regulatory driven will be a target area in Q4 and is going to continue into 2019, meaning regulation jobs will likely be frequently available.
It's hard to put a finger on the main point of success, but we do know that those candidates who are open to relocation and moving around stand a better chance of securing permanent roles. Skill sets require professionals to be more quantitative in their approach and also, within credit risk, the requirement to have deep leveraged finance knowledge is a major beneficial factor as well.
Leading up to the end of the year is a notoriously tough time and candidates looking to move will be harder to find. That being said, we are aware that without clarity around Brexit, many candidates will remain unsure in what they want to do and, therefore, will continue to be cautious in searching for new positions.
Contributors to Q3 Risk Management recruitment update