Mr. Anil Nayak, Director – Risk Analytics, Credit Suisse, addressed the students of SIBM Pune during the second session of Blueprint 2014. We caught up with him after the event.
You did your MBA at the University of New Haven. How did those years impact your life?
It was a great experience. Even today, I would say that my university years were by far the best years of my life. It’s the entire setting, sharing your knowledge with the other students – the interaction itself. When it’s residential, the whole university life revolves around the student, and I think that is itself a wonderful experience. My university years were very enriching, and something I would encourage everyone, including my own six-year-old daughter, to do. You make your best friends in university.
How was your experience in Deloitte, your first job?
The good side of it was the experience, the excitement, learning something new, meeting new people. The not-so-good side was the work-life balance. Typically when you’re young and in a traditional finance investment banking job, it’s very gruelling. But then, you get used to it – and you’re compensated for it – so it’s a personal choice. If that lifestyle works for you, great. It does change when your family grows. I would recommend it for people who are young, freshly done with an MBA. It’s good experience to have.
You spent five years as VP Global Operations and Finance, TD Securities. What would you say was the most challenging part of that job profile?
The learning aspect, and adapting to change. Initially, it was just two of us – myself and the gentleman who was my boss – and it was up to us to build up a team and go from there. Our overall scope was initially limited to the loan portfolio, and we had to build a small team. Getting to that stage was the first challenge. The second came from growing through the ranks. In five years I went from analyst to senior analyst, manager, and finally Vice President. Every promotion brings a new set of challenges, new responsibilities, and bigger expectations. Part of a career is to take that in stride, adapt to those changes, demonstrate that you can do it, and that you’re ready for the next challenge.
In your opinion, what kind of skill sets should young finance professionals hone to become successful as risk analysts?
If I was to draw a pie chart of the time spent in a typical day, or a typical deal, I would say that about 60 percent of the time would be spent doing research. You would need basic access to financial information, whether it’s Bloomberg, Reuters, or any of the other databases out there; you need the ability to do research, which could be company research, industry research, or financial statement analysis. Then 20 percent is probably on actual analysis, and 10-15 percent in actually writing. The remaining 5-10 percent would be actual verbal communication. I would recommend you invest the time in honing those relevant skill sets.
In The Blueprint, you spoke of communication in terms of interviews and presentations. When it comes to writing skills – in the context of financial analysis – would you have one or two quick pointers to share?
The first point is, Know Your Audience. That’ll give you context in terms of how much information to put in. There’s no point in investing the time in writing when you know that a senior executive won’t have time to read it. They just want to know the gist. Be very specific. You can write in bullet form. Just tell me what the key issues are, what is the nature of the transaction, why do you think it makes sense, how much money is involved, those kinds of things. It should not be more than a couple of pages long. Don’t put in information that you don’t have to, that’s just a waste of everyone’s time.
A lot of people are looking at doing a CFA after the MBA degree. How relevant would you say that really is?
In general, a CFA is useful or valued in specific areas of banking, more so in investment banking, portfolio management, corporate finance, corporate lending, corporate credit, equity research, debt research, or any research for that matter. Any other areas of Finance, it might be an overkill if you already have an MBA. It takes a lot of time to do it and there are other costs associated. So if you think you’re heading towards that kind of career and you think it’s relevant, do a CFA. Otherwise channel your efforts towards developing some other skill set.
With organisations going global, risk management is becoming about a lot things. It’s about resources, it’s about stakeholders, it’s about people. So how do you manage such a diverse portfolio?
To be honest, in India it’s all about people management and workflow management. It’s a numbers game. The nature of work in India, whatever the business model and the sector, is to manage the workflow, manage people. All the direction comes from onsite locations. It’s all about us taking the orders, managing the ship, managing the workflow. If you want to be part of strategic direction then you would have to move to the headquarters, whether that’s in India or abroad.
Where do you see the field of risk analysis going in five years?
It’s getting more and more complicated. Especially for banks in the European setting, the biggest challenge today is pleasing regulators, who are coming down very hard on all banks. Risk analysis is becoming very complicated – more so for Credit Suisse because we operate in several jurisdictions and we are getting different requirements from all the regulators. I think it’s only going to get worse, at least for a little while. The focus has been on stabilising the capital structure, not growing the topline. Regulators are driving our business right now, and I think that’s probably going to be the way forward.
What has your biggest challenge been in your present position?
People management, and maybe a little bit of the culture change, because my prior work experience has all been in North America. We have many bright and talented young minds in our organisation, but they need a little grooming and that initial handholding. These topics of communication, soft skills, they’re very relevant in the Indian context. I would say the challenge from my perspective has been more about the cultural setting and people management than the actual work itself.
How would you advise an MBA student in Finance to choose their focus area of specialisation and work? What would be your one piece of advice to them?
It all comes down to research. First you need to find out what is really out there. Second and probably more important, what do you as an individual like and want to do? As I always say, follow your passion. Money will follow. First choose your industry. Then maybe within that industry pick a vertical and a sector that interests you – ideally, even pick your company – and focus on that. The best way to do that is to really do your research, understand what the company does, its products, and its culture. Talk to various people, ask questions in forums such as Blueprint. Considering the number of MBAs out there, it’s important to decide what you need to do, what you want to do, and then follow that path.