I was recently asked this in a meeting with a senior team from a global bank.
It’s a great question and to answer it I had to go right back to beginning when I founded Frontline Analysts in 2005. Quite simply, its because I believe that with the right training, smart grads anywhere can be grown into proper City analysts. You don’t need to be sitting in the most expensive real estate in the world or being trained on the job by peers who should be focused on making profit. You could be in Birmingham, Baltimore, Bangalore and get the same quality you could get from the desk next door or the floor below.
Years ago, before the credit crunch, I was a trading floor credit analyst and I was overwhelmed with work. My clients held the whole universe of names, but only 20% of them were really affecting performance at any one time. Who was going to cover the other 80%, and escalate them to me when they got interesting?
Budgets were tight. I was urged to meet with off-shore analyst providers, which I did. I was hugely impressed with the levels of organisation there, but the set up didn’t feel right. The talk was of objective work, data, letting me get on with the thinking – essentially number crunching. But why be so modest in the analytical ambition?
I went back to my boss and told him that the off-shore solutions didn’t cut the mustard. He told me that he’d try again to get some budget for London headcount. That didn’t feel right either. Why default to the idea that the paradigm for understanding the world is located only in existing financial centres?
It’s a blinding truth to us at Frontline Analysts that there is no more, or less, special analytical sauce in the tap water of London or New York than there is in Bangalore or Tokyo. The talent is everywhere. Yes there are cultural differences, but there are also huge cultural commonalities. We’re not all the same but we are as smart or as dumb as each other.
If we accept that, the question is how to find the right raw talent, and then how to grow the kids into proper City analysts. This is possible. It’s not going happen with endless powerpoint slides or text books. City analysts are grown through serving apprenticeships. Those apprenticeships can only happen under masters who have done the job for decades. The history being what it is, many of these masters are in NY or London, though of course they are of all nationalities.
So, that’s us. As it happens, this is where the hard work started, back in 2005. We had to design really good recruitment processes. Then, not having years to do slow-cook apprenticeships of the style that we had ourselves, we had to invent the accelerated apprenticeship to do the nurturing on a reasonable, 3-month, time scale. All that is a story for another time.