I’m a quant in an investment bank. Thanks to the rise of “big data”, me and my kind are suddenly popular again. But very few quant jobs in banks are involved with big data and far too many lead to dead ends.
I’ve ridden the quant market for longer than many of the people reading this will have been aware that stochastic calculus exists. When structured credit was all the thing, I worked in structured credit. When quantitative analysis was a thing, I worked in quant analysis. Now that models are a thing, I work in models. Survival in this job is all about adaptation.
If you’re starting as a quant now though, you need to know that there’s not much of a clear career path right now in the quant world. If you’re on the sell-side (ie. in an investment bank), it’s all about working in XVA, calculating the accounting adjustments needed for regulatory purposes, or as a ‘library quant’ (managing the library of existing code and functions) or a model validation quant (checking existing quant models fit with regulatory requirements). These are all fairly low-level and comparatively low paid roles. And they’re roles where banks are trying to save money. – Library quant roles at Morgan Stanley are being off-shored to Hungary, for example. All the general analytics routines, the curve strippers, the root solvers are being coded and maintained in the lower cost regions.
If you’re starting as quant today, you might think you’re going to be a trader. This isn’t that easy: instead of quants becoming traders, traders are becoming quants. It’s the traders who are leaning how to code, rather than the quants who are learning how to trade. While traders move into quant territory, us quants are getting lost in unexciting regulatory work.
Of course, there are some interesting quant jobs in investment banks. – Just not many of them. These jobs are the “desk quant jobs” – the quants who sit next to the traders and develop trading tools whilst interfacing with the core quant library.
In my opinion, the best quanting jobs now are (like most things), on the buy-side. If you’re starting out as a quant today, you should try to get into the quantitative fund space. Quant funds offer far more potential to use your analytical skills to generate revenues than investment banks do. Who knows, you might even get paid?! For me, that’s probably too late. I’m simply improve my AI skills so that I can analyze all the vast amounts of data coming out of banks’ regulatory projects.
Frank Zepper is a pseudonym.