Independent Quants - Are You In Danger of Disruption?

You have long helped, say, risk management of your clients sidestep threats and find optimal risk.
Are the same forces that disrupted financial institutions reshape now the quant services segment?

You are offering a range of services from consulting to solutions but the boundaries between the professional services are blurring. Services are influenced by the "democratization" of knowledge, methodologies and technologies.

We are often thinking about this, because you belong to our core target clients. In Disrupt or Re-Invent Ourselves? I have outlined that we will contribute to the democratization process. This was 2009. Market regimes, regulatory requirements and risk management needs have changed since then.

What independent quants may ask themselves

  • are we tracking the needs of our clients and has it become more difficult to win new contracts?
  • are we forced to responding rather than shaping requirements?`
  • are our clients asking us to use certain risk methodologies technologies or platforms?
  • are we accepting smaller projects at acceptable margins?
What risk managing clients may ask themselves

  • when did we last analyze the market of quant finance services? Have we examined opportunities to spread our risk management tasks across more providers?
  • do our providers make transparent the methodologies and technologies that underpin their analytics?
  • do we have risk professionals that are not only experienced in risk management processes but understand the principles of risk analytics?
  • do we have a system that assesses the quality of he services?
2009 we were emphasizing on solutions, proud of our UnRisk FACTORY. But thinking of the implications of such questions we unleashed the programming power behind the FACTORY: UnRisk-Q, launched the UnRisk Academy to extend product use training with full explanation on what is behind the curtain. The Academy heads wrote a Workout In Computational Finance  and we start a series of one day Workouts (in London) to intensify the acquired knowledge.

I is my strong belief that independent quantitative finance services will need to shift from solution shops (solve problems given by requirement specifications) to value-added complete "standard" services (address problems of defined scope with advanced processes and platforms).

We have disrupted ourselves again to deliver the know how packages enabling quants to build and establish their added-value process business.