Double Materiality and Its Growing Impact on Recruitment

Quantitative investment strategies and the growing importance of alternative data are driving an exciting transformation in the financial services industry. This "Quant Revolution" isn't just transforming the way investment decisions are made, but it’s also shaking up how firms approach hiring. At Selby Jennings, we've had the privilege of witnessing these changes firsthand, observing how institutional investors and financial services firms are adjusting to a future driven by data.

Systematic investing

Systematic investing, once seen as a niche approach, has moved into the mainstream. What was once reliant on human intuition and discretionary decision-making is now being powered by algorithms and data science. Instead of relying solely on analysts' gut instincts, firms are now using complex mathematical models to make investment decisions.

Quantitative strategies are now a regular part of many institutional portfolios. Hedge funds, asset managers, and other investors have embraced algorithms to help optimize portfolios, manage risks, and predict market trends. By leveraging historical financial data alongside alternative data sources, firms are able to uncover market inefficiencies that they can act on in real time.

This shift is much more than just a trend—it’s a fundamental change in how investment decisions are made. What we're seeing now is a focus on speed, precision, and efficiency.

Alternative data

The Quant Revolution cannot be discussed without addressing the rapid expansion of alternative data. While traditional datasets, such as earnings reports, stock prices, and interest rates, remain essential, investors are increasingly leveraging new, non-traditional data sources. These include satellite imagery, geospatial data, consumer transaction patterns, and even sentiment analysis from social media platforms—sources that offer deeper, more granular insights into market behavior and trends.

Alternative data offers investors a whole new way to view the market, allowing them to spot trends and anomalies before they’re reflected in more traditional financial reports. For example, hedge funds are now using satellite images to track shipping activity at ports or oil refinery output, helping them predict commodity price shifts and supply chain disruptions before the information hits the news.

Here at Selby Jennings, we've seen how this explosion of data has created a demand for professionals who can handle and analyze it. Firms are now actively looking for quants, data scientists, and other experts who can take these vast amounts of data, turn it into actionable insights, and integrate it into their investment strategies.

Evolving hiring trends in financial services

As investment strategies shift to become more data-driven, hiring trends in the financial services sector are changing too. It’s no longer enough to simply hire people with a background in traditional finance. The demand for technical talent has skyrocketed. Today, firms are looking for professionals who can bridge the gap between finance and technology.

At Selby Jennings, we're seeing firsthand how firms are prioritizing candidates who have deep financial knowledge but also possess technical skills in data science, machine learning, and algorithmic modeling. These professionals are building the algorithms that are revolutionizing the industry.

Additionally, we’re noticing a shift in the types of candidates financial services firms are targeting. We’re now seeing firms hire professionals from fields like computer science, statistics, and engineering—disciplines that were once considered outside the scope of finance but are now integral to building the sophisticated tools that power data-driven investment strategies.

With the rise of alternative data, we’re also seeing a new demand for talent who can analyze non-traditional data sets. Whether it’s sentiment analysis from tracking commodity prices using satellite images, firms need professionals who can extract value from this data and apply it to investment strategies.

Collaboration between tech and finance

The need for close collaboration between tech and finance teams has never been greater. In the past, tech experts and financial professionals worked in silos, each focused on their area of expertise. Today, that’s no longer enough. The firms leading the way are those that are fostering a culture of collaboration between their quantitative analysts (quants), data scientists, and portfolio managers.

It’s not just about technology being part of the equation—it’s about making tech an integral part of the decision-making process. Financial professionals are now expected to understand coding and data science, while tech experts must have a solid grasp of financial theory and markets. This blending of skill sets is what will give firms the edge to remain competitive.

The future of systematic investing and talent acquisition

Looking ahead, we can expect data-driven strategies to continue gaining traction in the investment world. As markets become more complex and the amount of data available to firms continues to grow, the importance of sophisticated algorithms and alternative data will only increase. To succeed in this environment, firms will need professionals who can not only adapt to these changes but can actively drive them forward.

We see a future where talent with expertise in both finance and technology will be in high demand. The professionals of tomorrow will be those who can work with AI, machine learning, and big data analytics, while also having a strong understanding of financial markets and investment strategies. The need for these professionals will only intensify as the industry continues to evolve.

As the industry continues to evolve, those firms that prioritize innovation and seek out top talent will be best positioned to thrive. For financial services firms, the Quant Revolution is about more than just embracing new investment strategies—it’s about investing in the talent that will shape the future of finance.

If your organization is looking to attract the talent that will drive your data-driven strategies forward, contact us today or request a call back to learn how we can help you build the high-performing teams that will shape the future of your business.