Operational risk remains a focus for trading operations and for good reason. Banks and investment firms say they're worried about repeating the errors of the past. But just where do the operational risk managers and the quants meet, for instance? That's been a serious point of contention.
First, let's make a serious distinction between credit and market risk and operational risk. Operational risk is driven by internal control problems-whether they are system glitches, data accuracy issues or criminal activity. Consider the fat finger errors of late. The rogue trader losses at SocGen also come to mind.
Given the importance of operational risk management, only until recently did those on this side of the shop have any sort of real influence firm-wide. The SEC is certainly a motivator, but there is a serious mood change at firms, as well. So, what's this mean for jobs?
Today, positions in operations risk management are a sure and safe bet and on the rise at all of the major banks and investment firms. Job listings abound. Managers and analysts need a strong knowledge of the operational risk framework, risk mitigation and data management.
Project management experience is a plus, as well as the ability to work across departments from audit to compliance and from tech to trading. Team players need apply. Operational risk managers and analysts need to have a strong understanding of the trade life cycle, as well as the bank's or firm's products.