Insights

Credit & Risk Management

CREDIT & RISK MANAGEMENT MARKET COMMENTARY, Q3 2018

• Article by BRUIN Financial

CREDIT & RISK MANAGEMENT MARKET COMMENTARY, Q3 2018

OVERVIEW

Over Q3 the outside temperature and job flow had an inverse relationship within the Risk market. As the mercury rose to astronomical levels in London, the job market cooled off significantly in the majority of our areas of coverage. However, as the quarter came to a close, we started to see job flow pick up again, and we are overall optimistic about Q4 being very busy here in the City. We are encouraged that so many firms are choosing to create brand new roles here in a post-Brexit macro-climate, and whilst football didn’t quite make it home, Financial Services is still very much at home in London.

Challenges that we have faced in the past quarter have been varied and complex, but also intellectually stimulating at the same time. Working on greenfield roles, particularly in the Quant and Information Security spaces, has seen us working collaboratively with our clients to provide market intelligence and candidate attraction solutions to their business requirements. Similarly, our commitment to inclusive recruitment has seen us able to deliver gender and socio-economic diversity in candidate shortlists for the overwhelming majority of mandates taken on in Q3.

ROLE PROFILES

IT Risk / Information Security

The majority of requirements were as a result of team expansion, which continues the trend of firms making significant investment in this area. With the GDPR deadline having passed, firms are now looking to focus on more policy-focused hiring. One challenge that has become apparent over the last quarter has been dealing with hierarchical differences between firms on the buy and sell sides. Candidates from the sell side, used to the tiered structures of seniority, often baulk at the idea of joining a flat structure on the buy-side as they feel that their seniority is not well represented in this structure.

Quantitative Analytics / Research

Demand for Quants continued to be sky-high in Q3 across both the buy and sell side, with competition to secure the best talent the only thing hotter than the average ambient temperature on the Central Line this summer. In the light of increased external competition, it was noticeable in Q3 that firms are starting to be far more proactive in reviewing compensation for quantitative professionals on a regular basis. In Risk Analytics and Model Validation in particular, average salary increases for professionals are now approaching the 30% mark, and this is expected to continue given the relative scarcity of “home-grown” STEM subject talent.

Investment Risk & Risk in Europe

The third quarter has seen a number of large Asset Management firms look to build out Investment Risk functions in Luxembourg, and this has been by far the busiest area for us on the Continent, with seniority ranges from Analyst all the way up to “Head of” level. Concurrent with the trends we have seen in London, Luxembourg clients are asking for candidates with experience of UCITS and AIFMD. Candidates are overall reassured by the socio-economic stability in Luxembourg currently, and many are willing to commute in from the surrounding countries.

Firms are also more than willing overall to offer competitive relocation packages to candidates to work in Luxembourg. Q3 also saw our Dublin office make its first placement in Investment Risk. From an Investment Banking perspective, we see this as the second phase of the growth of our European offerings, and we expect Q4 and beyond to be able to expand into Paris, Frankfurt, Geneva and Zurich.

Amy Brown, our specialist European Risk Consultant, will be in Luxembourg on the 24th and 25th of October to meet with candidates and clients alike. If you are based in Luxembourg and you would like to set up a meeting with her to discuss the market please feel free to reach out to her to arrange.

Market Risk

Market Risk proved to be one of the busier areas of hiring in Q3, with Investment and Corporate Banking and Broking seeing a number of newly created desk-facing roles across a range of asset classes. We’ve had a number of productive conversations around inclusive recruitment with a number of Director and MD level stakeholders within Market Risk as to how they can increase the diversity of their candidate pools at the AVP and VP level, which have yielded positive outcomes for both the firms and their prospective candidates.

Operational Risk

On the buy side, we have observed clients continuing to split their First Line of Defence, which has led to the creation of a number of positions in green-field controls teams. Candidates coming from Internal Audit and COO-based roles have been particularly sought after for these positions.

On the sell side, the market has been relatively quiet in the last quarter. Firms seem inclined to ask their current Operational Risk employees to take on more responsibilities in their current roles, for example Business Continuity and Recovery Resolution Planning, rather than seek external candidates or consultants to look at these in isolation.

Credit

The Credit space on both buy and sell side was noticeably quieter than it has been, however coming we did see some very interesting senior Corporate Credit roles come to market within the banking sector. Fintech firms continue to bring in juniors, and candidates with Leveraged Finance experience are still highly sought after. Overall we expect that the sell-side credit market will pick up significantly now in Q4, but that the buy-side will continue to be quiet from a hiring perspective due to doubts around MiFiD II and Brexit.

 

WOMEN IN RISK

Over the past quarter our Consultants have been involved in a number of processes where diverse and inclusive recruitment has been at the top of the agenda. In an attempt to redress the systematic imbalances in gender representation at the mid/senior levels within Credit, Risk and Quantitative Analytics, firms are increasingly more open to taking a bottom-up approach to giving junior female candidates a chance to learn and develop on the job in more senior roles.

As part of our diversity offering we now provide client workshops on inclusive recruitment processes, including unconscious bias training, and effective talent management from an internal progression perspective. Please contact one of our consultants for more information on these  seminars.