At Morgan McKinley we aim to provide you with the most relevant and up to date information with our recruitment updates. In this blog we take a look at risk and quantitative finance across investment banking, SME & fintech and buyside risk.
Investment risk in Q1 has seen a 100% uplift on roles compared to Q1 2016. Most of these mandates have been at the lower end of experience levels with the average requirement being 1-3 years, but the demand for technical nous has certainly increased.
Hedge funds and some asset managers are targeting junior quantitative analysts from investment banks to take on investment risk duties that are more aligned to managing risk and generating investment ideas through data analysis. This now means that one of the main requirements is strong communication skills to essentially interpret results and present the data to their stakeholders. The new criteria has certainly brought a high standard of competition to candidates who already sit on the buy-side and we have seen exceptional profiles on and off the market within a week.
Market risk hiring in Q1 remained steady. Due to banks ensuring they comply with the new fundamental review of the trading book (FRTB), we saw an increase in demand for candidates with good market risk methodology knowledge and an expertise in either VaR models or IRC, in order to understand and help move toward expected shortfall and default risk charge respectively.
Portfolio market risk and stress testing is another skill-set in demand as organisations seek previous experience in front office market risk management and the ability to quantify the cross asset market risk appetite for the entire trading book.
On the traded market risk asset class specialist side, whatever activity there was remained in the FX and rates space. In addition, we have seen a number of roles in the risk governance space seeking candidates with relevant exposure to dealing with regulators and liaising with the business.
Q1 saw quant finance hiring to be extremely busy. With increased model related regulation, many banks sought to expand their model development and validation functions across traded and credit risk, covering both the pricing model and risk modelling side.
We have also seen an increase in validation roles with broader exposure to models for calculating wholesale credit risk, retail credit risk, non-traded market risk, stress-testing, operational risk, IFRS9, CCAR, treasury, liquidity and financial forecasting. In this sector, a background in statistical modelling is highly valuable and in demand. In addition we were busy in the quant research space with employers seeking junior quants to support the business on pricing, risk and development of new models. Here derivative pricing and strong coding skills in Python or C++ are desirable.
Counterparty credit risk has seen unprecedented activity in Q1 and we see this as increasing throughout the year with hires at all levels in reaction to BCBS279 (SA-CCR). As a result experienced counterparty credit risk SVPs/directors are leading projects with large head-count budgets and tight deadlines. Boutique banks offer the broadest remit here with ‘heads of’ positions spanning entire banking groups. IFRS 9 continues to be an area of focus with both modelling and governance job seekers experiencing high demand in the market. Notably this is the only area that has been completely excluded from hiring freezes in many institutions. Moving further into 2017, we do not anticipate a slow-down in this area and expect consultancies to again build their expertise to support the demand on regulatory projects.
Credit analysis on the leveraged finance side has been in high demand in Q1. Also funds and hedge fund counterparty analysis is another area where we actively recruited during the first quarter. Many areas of credit risk require candidates with strong analysis skills as this is an area of development. Product knowledge is something that many banks are seeking and candidates need to have an excellent understanding of technical products and credit obligations that have been put in place.
The SME market has gone from strength to strength with a steady increase in the volume of mandates in this area; which is in tandem with the increase of new peer to peers and challenger banks that have had their FCA licences approved. SMEs are also more confident in the market since realising that there are now many lenders with alternative products who can lend and support them as they seek financing options.
There has been in particular, a high demand for talented candidates who have a wealth of experience across SME lending and business finance; prior experience within P2P is a distinct advantage for many clients as it's important that candidates have a strong understanding of the platforms and technology involved. Underwriting and credit analysis skills are still at the forefront of many mandates as well as ensuring that job seekers are keen to be hands-on and pro-actively involved in the development of their credit functions, frameworks and policies.
In terms of talent pools, there is a good selection of more seasoned and experienced candidates in comparison to the junior end of the scale. Competent junior underwriters in particular have an array of opportunities available on the market thus making it more competitive for employers in terms of offerings.
Operational risk recruitment has gotten off to a steady start in Q1, with its highest volume of roles being at VP level. The majority of roles have been in the capital markets, with companies looking for candidates with specific product knowledge as well as a strong background within risk. High calibre job seekers with strong academics are generally preferred and tend to find roles very quickly.
There is a high amount of senior (director/head of ) level candidates on the market, however, there are not many roles available at this seniority. Asset management firms tend to be set on the requirement of past asset management experience, making it difficult for job seekers with a banking background to move over, whilst banks show more flexibility in regards to candidate backgrounds. Smaller boutique investment banks have begun expanding their operational risk teams and are aiming to attract high calibre candidates from larger banks, taking advantage of redundancies due to restructuring, off-shoring and near-shoring.