Risk Management Markets – February update

A Positive Outlook Amid Fragile Markets

In his latest Risk Management Markets update, James brings encouraging news from the financial services industry. While challenges persist, signs of recovery are evident, so let’s dive into the key highlights and see what is going on in the Risk recruitment market.

Market recovery continues

In my January update, I alluded to the fact that recruitment had begun to pick up following from a much slower 2023, and I am happy to report that this market recovery has continued throughout February with positive signs being shown across financial services.

Investment Banking: a shift in risk management

• Budgets and confidenceu200bu200bu200b: Investment banks have submitted risk management budgets, which have signalled increased hiring due to lower volumes in 2023 and market optimism. These budgets reflect growing confidence in the market and expected growth into 2024.
• Risk management function: the need for growth in the risk management functions is clear. The stagnant market in 2023 coupled with higher regulation pertaining to non-financial risk necessitates renewed focus on risk mitigation.

Strategic growth areas

• Operational resilience: regulatory requirements demand robust frameworks. Candidates skilled in implementing effective resilience strategies are in high demand.
• Sustainability and ESG: Environmental, Social, and Governance (ESG) considerations drive strategic decisions. Expect continued demand for professionals at this intersection.

Asset management insights

• Operational resilience across the board: asset management clients are also looking to prioritise operational resilience hiring. Whether hedge funds, private equity firms, or mutual funds, resilient systems are essential.
• Investment risk professionals in demand: dry powder availability fuels demand. Professionals adept at risk assessment and management play a pivotal role.

Bonus season and market movement

As bonus season approaches, market dynamics shift. Last year’s lacklustre performance means bonuses are expected to be approximately 10% lower year-on-year. The expectation is that this will lead to a more active candidate market, which often culminates in higher hiring volumes as clients fight for the strongest talent in the market.

Stay conservatively confident

While the market remains fragile, our approach is one of cautious optimism, with much more to report on in our March insights edition.

As always, feel free to reach out to me directly for further discussion at jamesbaker@puresearch.com. I’m here to talk!

James is the Director of Risk Management & Quantitative Analytics at Pure Search. With an extensive and diverse track record, James has placed senior hires for a wide range of clients, from Tier 1 to boutique investment banks, international and UK private banks, pension funds, systematic trading funds, and consultancies.