No longer just a short-term option for ex-traders filling time, front office control function roles are becoming more desirable and more demanding of the skills they require.
Supervisory teams are still looking to recruit staff with a sales and trading background, but they are finding it easier to both do so and also retain personnel than was previously the case. So why is this?
“People are beginning to realise that they can have enhanced career stability and earn good money in risk and control. Of course, there are always people who are looking for the next trading role, but it’s becoming a smaller percentage. Most see that this function has grown a lot, and the regulator isn’t going away,” says Leigh Albrecht, a Director at London-based Paritas Recruitment. Founded in 2011, Paritas specialises in finding people for corporate governance roles.
Ex-traders are desired for 1st line control roles because they possess the requisite market knowledge to effectively challenge the business without having the wool pulled over their eyes. “The product understanding and knowing the mentality of the way traders think is why ex-traders are particularly useful in say, surveillance teams,” says Caleb Hawkins, head of compliance at London-based executive recruiter Morgan McKinley.
However, it is not always the case that those with the right technical knowledge can slot right into a position in the front office control function. Quite often, it seems, ex-traders without compliance experience struggle with applying the product expertise to building a better non-financial risk management framework, so banks are finding it increasingly necessary to invest in in-house training programmes to get them up to speed.
This process of converting employees from revenue generators to governance staff tends to happen faster and less painfully at bigger banks with greater resources. Ideally, firms are looking for ex-traders that have had a couple of years in compliance or control functions, but these are not always easy to find.
Be a number cruncher
1st line control departments are also looking for people with highly developed quantitative skills these days. Graduates with knowledge of data science and data analytics are much in demand. These types of skills are needed to break down, make sense of and then disseminate to senior management in an explicable format the vast reams of data produced by the front office control function.
Everyone in risk and control, across all three lines of defence, seems to be talking about the yawning need for staff with knowledge of automation, machine learning and AI as well. The problem is that there are simply not enough people to go around. Someone with a Ph.D. in the field of advanced robotics from, say, Massachusetts Institute of Technology (MIT) or Imperial College, London can often walk straight from the groves of academe into a highly rewarded job in supervision.
The traditional favour afforded graduates of particular universities is being eroded, as the need for people of this calibre grows. Oxford, Cambridge and Imperial College, London have always stood at the top of tree in the UK, while the Ivy League schools lead the pack in the US, but these days if a graduate walks through a bank’s doors with the right skills and impresses at interview, it doesn’t matter where he or she went to college. In this sense, the front office control function is leading the way in meritocracy.