It started over 30 years ago when I started an apprenticeship at a bank. I was introduced to derivatives trading and became interested in financial instruments. During my studies at university, I dug into financial derivatives and econometrics. Then I looked for a job where I could apply my quantitative skills. I started in risk management for the FX and commodities desk at a local bank in Germany. Over time, I started modeling financial instruments, and I took a role at the bank to implement the new instruments into a risk management system. I came across the CQF and knew this could be good to get more in-depth knowledge. At that time, lots of mathematicians, physicists, and engineers were in the field, so it was not easy to get respect as an outsider. I was OK because I had a quantitative background in terms of econometrics, but I was not a mathematician or physicist by trade, so I always lacked the knowledge of those “real quants”. I took the CQF to get more of an understanding of how they think. For me, it was important to understand what they were talking about and translate this into something where I could explain complex aspects to senior management in an easier way. The CQF was the right path for this purpose.
The CQF strengthened my knowledge and awareness and helped me to discuss a lot of topics within the professional environment. I also found, at some point, that it was important to move away from this deep dive into real quant topics, and focus more on managing the general aspects around risk management tools. When you develop a systems environment, you need to take care of the practical side. We do not do everything for the sake of mathematical beauty because there's a purpose to our measurements – to make risk reporting more accurate and to inform senior management about the inherent risks in portfolios, bank accounts, and liabilities. It’s not necessary to calculate something out to the 4th or 5th digit. It's more important to have the correct number.
One of the most valuable skills gained from the CQF was the insights into differential calculus and other aspects of the mathematics behind quant finance. When we had to do the math, it was always a kind of puzzle to do the derivations and see how everything comes together. It shows the beauty of mathematics and what you can achieve with it. For my current job, the most important thing is to understand the language, know what the flaws and advantages are, and choose the solutions that serve our needs best. Without the CQF, I wouldn't have understood that as clearly as I do.
For aspiting quants, I would say stay curious. Use quantitative skills for a purpose and not just for the beauty of it. This is the most important thing that I learned. If you are a quant or a mathematician, you should also work on understanding business and economics, so that you know what the purpose is at the end of the day. On the economist side, if you want to move into quant finance, you should bear in mind that you will not be able to compete with “real quants”, those with degrees in mathematics, or physics, for example. However, the CQF program will help you to close the gap and be the person who will be able to translate the complex ideas to the senior managers who make decisions.
