Starting with this issue of the newsletter, RMI is excited to introduce the new “In Focus” section, which will alternately feature alumni interviews, industry perspectives, opinion pieces, etc. with each of its quarterly issue.
This issue we asked Mr. Shaji Chandrasenan, a graduate from the first cohort of the Master of Science in Financial Engineering (MFE) Program offered by RMI in 2001, some questions relating to his experience with the MFE, career advice in financial services industry, and more.
Shaji is currently the Principal Risk Manager at the World Bank Group’s International Finance Corporation. Prior to that he was the Director of Financial Risk Supervision Division at the Monetary Authority of Singapore (MAS) for 14 years. A certified FRM® and PRM™, Shaji was also awarded the Distinguished Fellow for Risk management by the Institute of Banking and Finance in 2009.
How did your experience at RMI’s MFE Program help you with your career?
I find the program very rewarding as it encompassed a wide variety of topics, from the workings of the financial markets to hard-core stochastic calculus. Each subject gave an in-depth knowledge that was invaluable when I was pricing and structuring derivative products in my previous role as a derivative dealer. As a Financial Risk Specialist at MAS, the knowledge I acquired from the program again added value as I worked on model validation and domestic policy making. In addition, it is definitely useful when I was working on the fundamental review of the trading book and counterparty credit risk modelling as a member in the working groups for Bank of International Settlement’s capital rules. This knowledge still proves useful to me in my current role.
What are the top five skills that you would look for if you were looking to hire new graduates from the MFE Program?
There are many skills that I would consider. If I have to narrow it to five important skills, then I would say quantitative skill tops the list. Having an in-depth understanding of the math behind each model, coupled with a deep appreciation of the inner workings of the market is crucial. Next is coding skill which goes hand in hand with the math behind the model. The model will remain a theory until it is implemented in practice and becomes live!
The other two important skills would be eagerness to learn as well as coach. As the markets are continuously evolving, there is a great need to be able to pick up cutting edge models and at the same time be willing to coach younger staff. Last but not least, is communication skill. It is very important that the candidate is able to take a very complex quantitative model and explain it in layman terms. Most people are put off when they hear “quant speak”; so it is vital that they can translate complex and tedious equations into something more palatable and simple.
Can you share your thoughts on how to best prepare oneself for a career in financial services and risk management?
I have met people who are in this field more for the remuneration rather than passion. I feel that one needs to evaluate oneself to determine what exactly they like about the financial sector. Some people I meet are disgruntled about the work they do, primarily because their passion is not in the right place. A course like the MFE program provides insights to the workings of the financial industry and allows an individual to determine if this is the area where their passion lives.
In your experience, what are some attributes of individuals who are most successful in financial engineering?
There are many attributes and factors that contribute to a successful financial engineer. I strongly feel that passion is the underlying driving force for success in this field. To become successful, it is crucial that one needs to have passion for this subject. Passion will drive ingenuity as well as nudge one to develop a deeper and fuller appreciation of the various models. Understanding the math behind models without a deep appreciation of the inner workings of the markets often leads to a narrower risk ‘field of view’. Action-oriented staff are able to climb the career ladder fast. The known risks are usually taught in programs like the MFE. The unknown risks are risks that have to be evaluated and assessed. Being action-oriented pushes one to hunt for these risks.
Lastly, be confident. It is very likely that one needs to defend one’s findings to a wide audience, from traders to board members. As long as one has done a thorough study and covered all angles, one should be confident to defend and articulate convincingly and in good poise.
If you had to do it all over again, what would you do differently?
The sequence of my education and career path works very well for me. I wouldn’t want to change that part. However, I would like to have taken the MFE course at the earlier stage of my career. Although I was the first batch of MFE students, I was already a trader for 10 years. I wished I could have taken it immediately when I joined the workforce. Yes, the current cohort is definitely more fortunate as they have the opportunity to embark on this program early.
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