Danos Group
18 Nov

What has been happening in Risk Management this year? As a specialist in risk recruitment for the financial services, I have good visibility of market movements and trends. Here are my market views and observations.

Regulatory Projects

The Fundamental Review of the Trading Book (FRTB), Basel III and Markets in Financial Instruments Directive II (MIFID) are regulatory projects that have been constant over the year. Going forward these projects will mainly be within FRTB and more specifically in Basel III and IRB (Internal Ratings-Based Approach) modelling within quantitative risk.

Consultancy clients are predicting a busy 2020 to support the implementation of the regulatory changes and in preparation many clients are keen to seek IRB modelers on an interim and permanent basis. The banks are starting to look at direct hires, but this is slow as their preference has been to use consultancies to provide interim support.

In December 2018, Ruaridh Brown-Hovelt, the Head of Risk at Danos Associates predicted a busy year for FRTB and gave an insight into industry views – The Questions Facing FRTB.

IBOR Reform

The need for more Interbank Offered Rate (IBOR) reform support this year has been a big trend and we expect this to continue and likely to get busier in the coming months and into 2020.

Many hiring managers across the industry on the sell side have acknowledged this and the rise in interim support for IBOR transitioning has increased. Candidates with expertise in IBOR and the understanding of how to transition to SONIA are in high demand and can potentially have multiple opportunities to choose from.

Ruaridh Brown-Hovelt, the Head of Risk at Danos Associates explains further about the transition – An update on the risk recruitment market: are you ready for SONIA?

On the buy side, only a few managers I have met during the year have flagged IBOR and the need for expert support, but those who have are very surprised at the lack of acknowledgement by the rest of buy side so far – this is an early indication that there will be further growth for specialist requirements in this area.

Technology Impact

With more functions and teams starting to find new innovative ways of implementing Artificial Intelligence (AI) and machine learning techniques into risk management, the need for more technical skills is on the rise. Quantitative candidates with knowledge of certain techniques and processes like deep learning, are increasingly in demand. Especially those with practical experience of applying said techniques to credit risk and anti-fraud.

Most of the banks are restructuring and hiring in the electronic trading risk teams.  Ruaridh Brown-Hovelt, the Head of Risk at Danos Associates wrote further on this earlier in the year – Recruiting for e-trading risk functions.

This is an increasingly competitive hiring space and we foresee more opportunities being created here in the coming months.

FinTech Boom

In 2019 we have seen successful European digital banks and FinTechs expand to support these growth markets around the world, with our global offices filling roles in this space. The speed of the growth creates the need for substantial hiring to cope with the new demands and creates the need to backfill rapidly.

The growth is great for new opportunities in the market, but divides opinion from candidates and clients who have experience from your more traditional retail or investment banks, whether this is something they would or could transition into. The main hiring activity we have seen and filled has been within the framework and regulatory reporting, as well as permanent and interim senior risk positions to help lead and develop the operations.

We have worked with very early stage FinTechs often with the need for experienced resource to design and implement frameworks from scratch, as well as more established firms which have needed to increase capacity to cope with the new workloads.

Katherine Lord, Head of Danos Consulting earlier in the year explained how big the FinTech market had already become and it has only continued to grow, now on a global scale – FinTech is a key driver in the recruitment market.


A year filled with so much change and uncertainty in the market is usually followed by a year of increased demand and decisiveness to get on and make changes. The market has seen a busier Q4 this year, with more headcounts being signed-off and most of the hiring for much needed replacements across the board.

In 2020 we foresee the need for structural changes, expanding and tailoring of teams and functions, and we expect an even busier year across the market.

If you are keen to hear what we are currently fulfilling or our market awareness, please feel free to reach out for a confidential discussion on how we can assist you with your search or provide you with right talent and expertise.

04 Nov

Card fraud poses a major threat to the finance industry. It has been recently reported that criminals stole more than £1.2 billion through fraud and scams in the UK in 2018 alone(1). These crimes can have a devastating impact on victims. And even if the customer gets their money back from their finance provider, the organised criminal gangs which perpetrate these frauds still profit from the proceeds. This money may go on to fund illicit acts which damage our society – crimes such as terrorism, drug trafficking and people smuggling.

The financial industry is committed to tackling fraud and scams, and the banking industry is proactively using technology in the fight against fraud. In September 2019 we saw the introduction of two-factor authentication, a Strong Customer Authentication (SCA) requirement for most electronic payments made within the European Economic Area (EEA). Under the new rules, customers making certain transactions online will now require a second level of security, such as a passcode sent via text message, or biometrics.

Biometrics is emerging as a formidable solution to support secure payment and banking options. Biometric fingerprint readers have grown in popularity and are now used in many major areas including banking, mobile phone security and as broader security controls.

Biometrics are currently being used to verify people through:

  • Facial Recognition
  • Fingerprints
  • Retinal Scans
  • Signatures
  • Voice Analysis
  • Palm Vein Identification
  • Hand Geometry

These techniques are also available but have not yet been as widely adopted:

  • Brain Waves
  • Walk Style
  • DNA
  • Heartbeat
  • Iris Scan

Using biometrics to verify identity is popular because it is convenient and reliable.

Biometric identification is in the palm of every modern smart phone users’ hands. People can unlock their devices with their face, eyes or fingerprints. But, as a result, this opens people and organisations to cyber risk and the possibility of biometric data being hacked and stolen.

Biometric data security, storage, compliance and regulation are concerns that negatively impact adoption of biometrics by consumers. With increasing numbers of data breaches year by year, people are afraid of what could happen if hackers steal their biometric data. Since a person’s biometrics cannot be changed if stolen, like a password could be, fear of losing biometric data holds back some acceptance of this technology.

The evolution of the payment and banking industries are driven by three key factors: technological innovation, regulation, and consumer adoption. In the case of biometric payment authentication replacing passwords, the technology and regulation is in place to allow for the new era of card-not-present transactions, but research suggests that consumers are not ready to relinquish their dependence on password authentication(2).

Biometrics could play an important role in the fight against financial fraud, with their uniqueness and technology ease, however the financial services industry will need to install consumer confidence by eliminating risks related to data security, usage and storage, as well as defining and implementing regulation compliance. Having the right talent who understand compliance and risk and can work alongside data scientists to drive technology innovation is paramount.

Danos Associates has over 15 years’ experience in the Payment and Fintech sectors internationally covering Compliance, Financial crime, Risk, and Legal. We leverage our knowledge of firms and individuals to help connect individuals to solve technical and regulatory issues and provide succession planning or search to fill team gaps. If you would like to discuss this article or your team, please do get in touch.

Paul Geist
Associate Partner, Compliance

Tel: +44 (0) 20 3908 4806
Email: pgeist@danosassociates.com

Ruaridh Brown-Hovelt

Associate Partner, Head of Risk and Quant Practice

Tel: +44 (0) 20 3889 5757
Email: rbh@danosassociates.com


  • Fraud The Facts 2019
  • Lost in Transaction – Paysafe Group

01 Nov

Diverse and inclusive companies are more profitable and more appealing to work for than companies lacking these. Research shows that diversity will boost your reputation, your brand and your productivity.

A multi-cultural organisation will be better placed to service and satisfy clients. A one-size-fits-all approach doesn’t fit today’s world; being able to relate to a global market is important.

According to a landmark 2018 study from McKinsey, companies who boast gender, or racial and ethnic diversity are more likely to have financial returns above their national industry medians.

Companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians, while companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective industry medians.

From our perspective, it’s clear that firms with more diverse workforces tend be able to attract more top talent. It’s a point that many candidates ask about when discussing a potential firm, and it will only become more important to candidates as this way of thinking becomes commonplace.

Diverse and inclusive workforces lead to higher employee satisfaction and, in turn, a much better chance of retaining talent once hired. Diverse groups are a clear sign of a healthy and inclusive culture, where employees feel comfortable, valued and respected in their workplace.

A diverse and inclusive culture is imperative for a business to continue to thrive because it puts its people at the heart of its operation.

Danos Associates is a leading provider of Compliance, Risk and Legal recruitment services in the financial services arena across the Americas, EMEA and APAC.

We approach every search with an aim towards diversity and inclusion. While skillset and experience remain a focal point in our selection process, we strive to ensure that each shortlist reflects a diverse range of experience, culture, and backgrounds.

We take the time to meet and get to know each candidate before putting them forward for your roles. We feel that we are uniquely placed to ensure we are doing our part to find diverse candidates and, in turn, the strongest candidates for each job.

We pride ourselves on being able to match talent not just to the requirements of the role, but also to the style of the organisation.

Get in touch with us today to discuss your diversity and inclusion efforts and how we can assist you with your search and selection.

24 Jul

December 2019-A CEO takes quiet satisfaction that her Core firm has delivered its SM&CR project and met FCA’s deadline.

She had led the SM&CR project from the off, supported by HR and Compliance. It had been challenging. Compliance completed legislative and rules analysis and she had a consultancy firm validate it using proprietary software. She kept the project in house, supporting Compliance with contractors that had tackled SM&CR with banks. This helped to focus on the difficult issues early. She was surprised at the extent of the HR documentation rework.

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Conduct Rules training for all staff and role specific training for the Senior Management Functions (SMFs) and Code Staff has just been completed. A good job, but she is concerned how they will live-up to the regime:

  • She now has a “Duty of Responsibility” and the “Prescribed Responsibilities” largely fall on her shoulders.
  • FCA Supervision will expect each SMF to address their Statement of Responsibility (‘SoR’) and so she has demanded key performance indicators and management reporting to be enhanced. 
  • Management committee terms and membership have been revamped to align SoRs and collective responsibility.
  • Change management will need to be more disciplined so SoRs are updated and resubmitted to FCA.
  • Hiring new SMFs is going to be more involved. FCA are expected to closely scrutinise candidates. She expects new hire SMFs to cost more, and the recruitment and FCA approval to take longer.
  • She will appraise each SMF on whether they meet their SoR with input from Compliance and Risk alongside commercial objectives. Remuneration will be at stake!
  • HR has set up annual fitness and properness assessment and certification for all SMF and certification functions. HR are looking for software to automate this task.
  • HR and Compliance need strengthening, and she aims to hire talent from a larger firm with SM&CR experience.
  • FCA will no longer approve new certified functions. This may make hiring more dynamic but gives new obligations and risks.
  • Managers of certified functions are also certified so there is a clear chain of accountability from risk takers up to SMFs.
  • She is supportive of the new regulatory referencing requirements but is concerned about how they will deal with any fit and proper issues that arise and the potential impact on reputation. They are no longer be able to use NDAs.  
  • She plans to test her Firm in periodic mock Supervision visits to ensure that they continue to meet FCA expectations.
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SM&CR is a far-reaching regulatory change and it will have implications for all firms for many years to come. 9th December 2019 is the start date and we would anticipate CEOs will continually evaluate their organisation to meet evolving regulatory expectations.

With so much of this success resting on the strength of the team, it is really important to ensure that the skills and experience of those being brought into the team are of the highest quality. This is where the specialist expertise and network of Danos Associates can make a real difference.

Stephen Burke 

12 Jun

Interim hiring is perfect for bringing in additional support or specialist skills and expertise without the commitment or headcount that comes with permanent hires. When a firm takes the decision to bring in interim or consultancy support, they should take the following factors into consideration:

Quality of network

We have a bench of over 600 candidates that have been built up over eight years. With such a large talent pool and stringent vetting, we have a vast range of high quality skills and expertise at our disposal.

Managing expertise

Our consultancy practice is headed up by Katherine Lord who has over 18 years of experience in the interim market in this sector, and so has a great understanding of the current requirements and trends. She also works closely with our permanent legal hiring team, broadening the potential pool of talent and specialist skills we have available further still.

Multinational lawyers

Our reach is global, with offices in the States, Hong Kong and Singapore as well as having a heavy presence in Europe. Lawyers with qualifications from other jurisdictions have proven very popular in the commercial contracts market across the board but are obviously extremely valuable for international mergers, acquisitions, expansion or relocation. This has been particularly prevalent with work around Brexit.


We work in a very fast paced and demanding market and we are adept and managing this. The extent of our bench and our relationships mean that talented professionals can usually be with our clients within 48 hours. This delivers highly skilled support at the time they need it most.


Our business model allows us to offer highly competitive rates with great transparency.

If you would like to discuss interim solutions for your legal requirements further please do get in touch.

19 Dec

In response to the global financial crisis of 2008, The Basel Committee on Banking Supervision has been working with global regulators to create new guidelines that ensure the banking sector has stronger capital standards for market risk and is more resilient in the face of any future crises.

The new standards include a more defined boundary between banking and trading books, a ‘Standardized Approach’ to risk metrics and a trading desk-level model approval process for ‘Internal Model Approaches’.

Despite the FRTB’s good intentions, it has faced scepticism and criticism as banks have been working to implement and test the new methods ahead of the deadline of 31st December next year.

Is it worth the cost?


Some are struggling with the financial impact of FRTB where the costs involved in the complex implementation and maintenance are high and the capital requirements and new rules on managing trades could impact profitability.

There are reports of significant reductions in inter-bank trading and the number of banks with active trading books. Some suggest that the costs inflicted by FRTB are a result of panic and not relative to the scale of the issue, suggesting there are quicker and cheaper fixes.


The Bank of England has estimated at its most conservative figure, the financial crisis cost in excess of $20 trillion. The knock on, global effect is significantly higher. Some consider the cost of changes that protect against a global economic disaster to be completely insignificant and totally justified.

John Beckwith and Sanjay Sharma, authors of ‘The FRTB: Concepts, Implications and Implementation’, even believe that FRTB can be adopted at a ‘reasonable cost’. FRTB can be more cost effective than existing methods such as stress testing and operationally, a lot of the work required in the implementation would have needed to have been carried out anyway as technological development leans more on data integration and model alignment.

Has FRTB been rendered obsolete before it’s even begun?


The trading world, going into 2019 is much different to 2010 when FTRB was first discussed. Since then other regulatory models such as Basel 2.5, stress tests, VaR, IRC, leverage ratios, resolution planning and capital buffers have significantly reduced risk. Value at Risks (VaRs) are now only a third of what they were back in 2007.


Beckwith and Sharma strongly believe that FRTB plays a critical role in the future protection of our financial services, correcting areas that are currently left exposed.

While they appreciate that regulation brought in since the financial crisis has made important steps forward, they don’t address the vulnerabilities that allowed it to happen in the first place. They say that weaknesses in market risk frameworks have been identified but not addressed which leaves ‘global markets and banking systems…prone to systemic shocks.’

FRTB goes beyond existing new capital calculations and is designed to, ‘transform the measurement and management of trading activities into robust processes that are sensitive to the observability and suitability of risk-factor sensitivities as they change over time’.

Addressing capital requirements is not enough when existing rules are open to manipulation by creative traders. Illiquid securities were ultimately responsible for the financial crisis and FRTB allows banks to attribute additional capital to risk factors as liquidity in trading assets decline.

Banks currently testing Internal Model Approaches (IMA) are experiencing failure rates of up to 79% when reconciling forecasted and actual losses, which shows that there is a need for tighter controls.

Some question that with so much focus on past activity, how adept FRTB will be at protecting the future but an under-recognised benefit of FRTB is that it is the market forces that drive the trading parameters, not the subsequent regulation after an incident has occurred.  The new framework captures emerging threats in specific risk factors and securities in real-time.

Are banks going to meet the deadline next year?


FRTB has been on the table since 2012 and banks appear to have been making good progress with their impact assessments and initial implementation this year.  They have the whole of 2019 to test the new risk models and are steadily working towards meeting the deadline at the end of next year as required.


While banks within the European Union are further ahead, many experts believe that full implementation of FRTB won’t be in place until 2025. In December 2016 the draft European legislation published by the EU in relation to FRTB said that the proposed amendments would start in 2019 ‘at the earliest’, that the date of application would be two years from 2019 and further still there would then be a three year phase-in period.

FRTB brings with it huge operational challenges. One of these is the requirement to source and calibrate 10 years of market data. Risk and finance have typically been separate functions and where the former looks at the future and the latter the past, it could take some time to bring the two together.

Will America ever actually adopt FRTB?


David Lynch, Deputy Associate Director with the Fed has been very clear that the US are going to implement FRTB. While admitting that the original version caused capital concerns, he is confident that their data quality and testing is now more on track.

He has said that the Basel Committee will complete its consultation and finalise rules this year, allowing enough time for feedback and adoption to meet the delayed implementation date of 2022.


Shortly after President Trump was elected, he issued an executive order for the US Department of the Treasury to review the American financial regulatory system. The Vice Chairman of the Financial Services Committee in the US House of Representatives had issued warnings on international rules and Congressman Patrick McHenry said that agreements like the Basel III accord ‘unfairly penalised the American financial system’ and that increases in capital requirements had led to slower growth in America.

Following this, a report issued in June 2017 advised US regulators to hold off on FRTB while it was investigated further. Later in December, the Basel committee on Banking Supervision decided to postpone international implementation until 2022. The enquiries and delays have caused people to question the US’s commitment to FRTB which has led some banks to take their attention away from it.

To conclude

We have seen an interesting mix in views. The drive to secure a more resilient banking sector has to be supported but those at the helm are raising important questions. Whatever your view, FRTB is going to be an important part of 2019 and Hiring Managers are building their teams accordingly. If you need support in hiring people with the right skills and experience for this task, please get in touch.