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The Impact of COVID-19 & the Future of Financial Risk Management

Female financial services worker on laptop in office.

The past few months have had a dramatic impact on hiring plans across the finance industry. Trend predictions from earlier in 2020 are now obsolete and the future weeks and months remain hard to predict.

However, the outlook for the risk market in financial services is not all doom and gloom. There are a number of our clients continuing to hire for business-critical roles and are planning their future recruitment needs.

How was the market pre COVID-19?

The Financial Services market pre COVID-19 was very buoyant across all levels and verticals. Companies were hiring and there were good opportunities for technically strong candidates across the wider financial services sector.

Where I was seeing high demand was within the banking sector, funds and asset management. Quantitative Risk candidates were especially sought after with credit risk and market risk positions providing them with most opportunities.

Ireland's pillar banks had a consistent requirement for quantitative professionals across credit risk modelling and stress testing. Due to the demand and technicality of these roles, banks were looking at talent both locally and overseas.

International banks were also hiring, particularly within their risk and analytics teams. Due to their operations, there was more of an appetite for market risk profiles while professional services firms were hiring across their risk advisory practices, with an emphasis on financial risk, regulatory risk, operational risk and IT risk.

New to market management companies were also hiring within the risk space. Candidates with good fund risk experience found opportunities at PCF 39 level and there were several PCF 14 Head of Risk openings.

The current Financial Service landscape

It's evident that the COVID-19 pandemic has brought new recruitment challenges. There is still some uncertainty about how the market will move over the coming months, but some firms are continuing to hire remotely on a business-critical capacity with others holding back until a clearer picture develops.

As a number of roles within risk are a regulatory requirement, I would be hopeful that the bounce back will be steady and consistent.

We have already seen a number of Mancos and new to market firms recruit and hire throughout this period. Larger international banks have also continued with their recruitment, be it on a slightly reduced level. Profiles with quant risk, enterprise risk, operational risk and fund risk have all been sought after.

What impact will COVID-19 have on Risk Management?

COVID-19 may have a lasting effect on risk management. The banking sector could experience changes in credit risk, market risk and operational risk as a consequence.

It is inevitable that the credit quality in certain sectors will be negatively impacted due to the hibernation of the economy over the last number of months. This may result in a revised credit rating.

With the turbulent financial market conditions of late, market risk has been an impacted area. Banks may need to revise certain stress testing scenarios and methodologies for back-testing.

Financial institutions have placed a greater importance for having robust measures in place regarding governance, and system and controls to mitigate the potential operational losses.

The future of hiring and what's next

It is hard to confidently say what will happen over the coming months or years. Market conditions are still at the hands of the virus.

Assuming the levels of infection continue to fall and there is no second wave then I would be hoping for a consistent flow of jobs coming to market.

However, only time will tell. In the interim, the outlook is not all bad and we are continuing to work with our clients and candidates across the financial services sector remotely.

If your business is in need of support, either temporary or permanent staff, get in touch - we'd be happy to advise and talk you through the various options.