Firstly, for the benefit of those who might not fully understand what structuring actually entails (not least myself) would you be able to give an idea of what the job involves?
Certainly. Structuring is a role that has developed over the last few years in line with the growth of the derivatives market. With traditional financial products like equities or debt you have something that is very well defined; there is no ambiguity about what the product is it is just a question of agreeing the price with the client. Derivative products, on the other hand, can be far more complex and have become more and more exotic and developed over the last 10-15 years. The need for having a way of structuring these products to meet the needs of the client has developed as a result of this change.
What we do as the structuring team is to work closely with the trading and marketing teams at the bank to develop and price these products to meet the needs of our clients. The work we do frees up the trading desk so they can manage their risks and the marketing teams so they can focus on their clients.
The structuring team is responsible for developing new financial products. We might come up with an idea ourselves for a product and pass this on to the marketers who will introduce it to prospective clients. The marketer then takes the feedback from the client back to us so we can tailor-make the product to meet the needs of that specific client. Alternatively, the structurer might go out with the marketing team and meet the client face to face to come up with a solution to a particular problem they might be having and develop a product from there.
So it involves using a lot of different skill-sets - interpersonal skills and quantitative skills?
Exactly. It's a fun role that exists between marketing and trading where we get to do a lot a quantitative work such as modelling and pricing but still get a lot of interaction with marketers and clients. In my case, it turned out that this was a position which best suited me it's worked out very well so far.
What does your day-to-day role involve?
A typical day is quite hard to define as we are constantly working on different projects. Today, for example, I came in and we were working on a product for a client that we have been putting together for around two months. It is a complex product that has some risks embedded in it that we have to run it by our internal risk management team. We spent a lot of last week and most of this morning running it through different scenarios to better understand the risks involved.
I then had lunch with a hedge fund together with the marketers who cover the hedge fund. Normally my week would be made up of a combination of product meetings - talking to the marketers about what products we have and which we want to push to clients; completing technical evaluation on product pricing; going to see clients; and having internal meetings.
I tend to do more of the client-based side and interaction with the different departments at the bank whereas some of the other members of my team tend to work more on the technical side, for example working pricing models for our products.
On the whole it's a little of everything which is I guess what I like about structuring - it's different every day. I don't find myself getting bored sitting at a screen all day.
What would you say you find most interesting about the job if you could pinpoint one aspect of it?
I think what I find most interesting is trying to find out exactly what the client needs and then trying to find the perfect solution. It's like a puzzle that needs solving. I find it quite challenging and it's really rewarding when you find something that the client really likes.
I find in general what I like about the job is that it changes all the time. Whereas marketing revolves mainly around managing relationships and trading is managing your trading book, I think structuring is great because the work you are doing changes all the time and means adapting to changing market environments and with the needs of your clients. I think this is what really makes the job I do interesting.
What is the most challenging aspect of the role?
You get pulled in a lot of different directions. If you aren't careful you can find yourself getting overwhelmed by the different demands on your time. You have to be able to prioritise certain tasks and sometimes find yourself having to say 'no' to certain requests. You have to be good at multi-tasking and juggling different jobs at once.
I guess that also involves juggling different skill-sets?
Yes, that's also true. You have to be technical enough to perform different quantitative tasks such as working on pricing models but also be able to communicate effectively with different areas of the bank as well as your clients.
How have the events surrounding the financial crisis affected the work you are doing? I imagine there has been a shift by many of your clients towards products involving lower risk?
I don't think that the effect this has had on our work has been that great in all honesty. At BNP Paribas we have always had a very strict internal risk management function. Our risk department has always been separate from the business sides of the bank so they are independent and aren't in any way influenced by outside pressures or the needs of our clients. The only difference at the moment is that we need to scrutinise every deal even more rigorously before allowing it to go through. I think this strict attitude has served the firm well in the current environment as we have always been extremely scrupulous when it comes to managing our risk exposure.
You do a lot of work with the company's recruitment team. What has that been like?
I find it really interesting. I do a lot of the recruiting myself for my own team within structuring from very experienced hires to the most junior positions on the team. But the graduate recruitment work I do at BNP Paribas is really interesting.
What kind of people tend to make the right sort of recruits for BNP Paribas?
It changes all the time. In my particular team we tend to hire a lot of people with masters degrees. Because of the technical nature of structuring we particularly value graduates coming from an engineering or a maths background. That said, I am not biased when I am interview people for a particular position. If I find somebody who is great it doesn't matter what they are studying but that seems to be the kind of profile that works the best. Above all we are looking for people who have the ability and the willingness to learn, who are quick and intelligent and have the right amount of drive to succeed in the role.
What advice would you give to students looking to get into banking in the current climate?
My advice would be to be very flexible. If you can't find a job in the front office be open to taking a job in another area of finance just to get your foot in the door and try to be as open to all opportunities as possible.