BS Risk Mid-year - Flipbook - Page 5
RISK MANAGEMENT & QUANTS | RECRUITMENT MARKET UPDATE 2024
BARCLAYSIMPSON.COM
5
Key themes in risk
recruitment
Pricing quants in high demand
The market for pricing quants remains highly
competitive, with firms in both the sell side and buy
side raising base salaries and offering substantial
bonuses to attract and retain talent. We expect this
trend to continue in 2025.
As financial institutions continue to automate and
digitise pricing models, there is also growing demand
for quants who can bridge traditional mathematical
techniques with modern tech skills. Professionals
with expertise in emerging technologies like machine
learning, AI and blockchain are especially desirable.
Quants have traditionally been office-based, but
post-pandemic hybrid and remote working policies
have become a significant draw for good candidates.
Similarly, we are also seeing a reverse shift from the
buy side back to the sell side in pursuit of a better
work-life balance.
The credit risk cycle
Thames Water has been in the media spotlight
recently due to its debt levels and refinancing issues.
The utility company's woes are likely just the tip of the
credit risk iceberg. Companies that enjoyed debt at a
low cost before the pandemic now need refinancing
in a much higher-cost environment.
This situation is a consequence of the usual credit
cycle, whereby commercial debt increases in periods
of low interest rates until it forms a bubble. However,
the steps taken to shore up the economy during the
pandemic have delayed the bursting of the bubble,
while steep increases in interest rates to tackle
inflation have only compounded the problem.
Artificial intelligence gains momentum
The potential for AI deployment is vast in risk,
ranging from retail fraud detection through to trader
conduct monitoring and complex modelling. Indeed,
AI and machine learning technologies are already
extensively used in risk functions, most notably in
less complex, low-value and high-volume tasks, such
as retail credit processing and flow commercial credit
applications.
While people currently employed in these areas
are being replaced by automation, AI deployment
also creates new opportunities due to oversight
and governance issues. This leads to new roles that
extend the concept of model validation to model
and AI governance, as it becomes necessary to
determine how, why and where AI can be utilised, as
well as how its use in the business is being monitored
and governed.
