Has all this investment in risk management technology been a monumental waste of time and money?

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Over the last couple of years, risk technology has been hot area of recruitment within investment banks, hedge funds and fund managers alike. Even now, it continues to offer opportunities, but is all this investment worth it?

After all, UBS was one of the banks to plough money into upgrading its risk IT infrastructure last year, but alleged rogue trader Kweku Adoboli was still supposedly able to build up a rapidly worsening position undetected.

Most investment banks are continuing to invest in bolstering their risk IT systems, however.

Professor Chris Roebuck, visiting professor at Cass Business School and former global head of talent at UBS, says most risk managers accept that somebody within the organisation will do something wrong, but robust risk IT ensures (generally) that it doesn't "turn into a disaster".

"There will be a knee-jerk reaction from most investment banks to ensure the risk management systems are even more water-tight, but this misses the point," he says. "In order to move forward, and maximise performance within investment banks, there needs to be a moral compass within the organisation to stop wrong-doing in the first place."

It's perhaps too early to say whether any new risk IT roles have emerged as a direct reaction of the case at UBS. However, most financial services firms remain keen to recruit in this area.

"Obviously, there could always be someone persistent or ingenious enough to circumvent risk IT controls within an organisation, but the financial crisis has highlighted just how critical these controls are," says Paul Elworthy, head of the banking and financial services practice at recruiters Hudson. "Investment banks, hedge funds, consultants and asset managers are all still hiring in this area."

Most investment banks are having to upgrade their credit risk systems because of regulatory demands, while also working on intra-day risk platforms for the front office in order to gain a competitive advantage, suggests Paul Bennie, director of IT in finance headhunters Bennie MacLean.

"We've been working on a number of senior and mid-level risk roles in recent months, and we'd expect the recent rogue trading case to spur more investment in this area," he says.

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