Case study: Banking on it

Even after the global financial crisis, banking remains a popular career choice for physics graduates. Physics World talks to Benjamin Rosenberger and Rob Thomson, both of the equities division of Swiss firm UBS, about the ups and downs of working in finance

Physics World (PW): How did you become interested in finance?
Benjamin Rosenberger (BR): I had never really considered a career in finance before I went to university, but in the summer of 2008, just before my last year at St John's College, Oxford, I did an internship at UBS and really enjoyed it. And, of course, one of the obvious attractions of banking is being paid a competitive wage straight after graduating.

Rob Thomson (RT): I was interested in it from a young age because I wanted a job where I could use my analytical skills. I did think about doing a PhD after finishing my degree in physics at Imperial College London, but I thought the pace of life in the financial world would suit me better. I was particularly attracted to UBS because it is a vast global business with 64,000 employees and also a good reputation, most notably in equities. On an average day, about 8.8% of the shares traded through the London stock market go through UBS.

PW: What does your job involve on a day-to-day basis?
BR: I'm an equities analyst on the construction desk, which means that I spend my days researching a wide range of construction firms – from cement companies to UK house builders. To some, this might not sound like a particularly glamorous sector, but it is extremely tangible and you see it all around you. If I spot a new block of flats, I know exactly who is building them, and what build quality you can expect. The research I do can take many different forms, including checking company accounts and talking to independent sources such as the Bank of England for a unique angle on things. I then need to translate my findings into a view on the company's share price. I write my ideas up in a note for clients and talk to colleagues on the trading floor. One thing I did recently was to write a piece about the UK house-building industry, including a discussion of the impact of the UK government's budget cuts on social housing. This sort of document goes out to all of UBS's clients. It is easy to find out how much money the government is spending on social housing (some £3bn in 2010–2011) and how much each house builder is exposed to the cuts. But actually making a trade recommendation on the back of that research – or translating it into movements in share prices – is more difficult, and that is where I add value. It's very satisfying.

RT: I also work in UBS's equities division, but as a quantitative equities trader. One of the luxuries of my job is that it involves a mix of daily tasks and longer-term projects. As well as trading throughout the day, I also get involved in developing algorithms, which can either process client orders intelligently or make "their own" decisions about what and when to trade, over a timescale of several months. This is where the real creativity in my work comes in – figuring out how an algorithm works and why it would be more beneficial for clients to use than their existing strategies. It means that there is a certain amount of freedom in what I do. If I have a good idea that might save the bank or a client money, or improve things in some way, then I have some latitude to explore it further.

PW: What is the best part about your job?
BR: The best thing is being given a lot of responsibility early on. The reports I produce go out to hundreds of fund managers who manage billions of pounds of investments. Hopefully, I influence their decisions. I also like the fact that banking is very mobile; you can move up the ladder quickly, or transfer to other departments or branches if you want to do something different. Obviously, I hope to do well and get promoted, but there are also opportunities to work abroad, and my current job is a good starting point. Finally, and more specifically, I like the culture at UBS – in particular the flat hierarchy. I sit two desks away from my boss, who has worked at the firm for 30 years, and I can go to him with any suggestion at any time and he will listen to me.

RT: I think it's great that I get to use what I studied in A-level maths and my degree – from basic statistics to stochastic calculus or optimization – in a real-world situation. Also, there is a huge amount of problem solving involved in being an equities trader – and a fair amount of creativity, which I suppose many people would not expect. The other great thing about my job is the people I work with. My job has definitely lived up to my image of finance as a fast-paced industry.

PW: What about the worst part?
BR: Probably the hours. I get in at 7 a.m. at the latest and usually do a 12 hour day. But I am completely free at weekends, so compared with being a student, where there is always something hanging over you, it is not that bad.

RT: I agree. The hours are reasonably long; I also get in for 7 a.m. and leave at about 7 p.m. Still, I love my job – and not many people can say that.

PW: How has your training in physics helped in your current role?
BR: There are a lot of transferable skills that you learn in physics, such as being able to express yourself, having an affinity for numbers, being meticulous and being able to summarize large pieces of information concisely. However, I have to say that many of these skills can also be developed through other degrees.

RT: Of all the skills I learned at university, computer programming has been the most useful. Learning a programming language is invaluable for an equities trader like me because having a grounding in programming enables you to automate processes, anything from a simple program to track movements in stock prices to a complex analysis of a trading strategy. Automation means things get done much more quickly. You can get through vast amounts of data to provide statistically meaningful outcomes that you otherwise would not be able to achieve. A less-tangible skill would be problem solving – it is useful to able to take some kind of real-world problem and describe it in terms that you would use in, say, a theoretical-physics environment.

PW: What advice would you give to someone who is considering a career in finance?
BR: My advice to any physicist thinking about going into banking is not to be overwhelmed. At first, I was a bit timid around people who had studied finance, but UBS is actively looking for people with different backgrounds because it widens the knowledge base of the team.

RT: I have a slightly different perspective, because the advice I would give to physics students thinking about a similar role is "be prepared". A lot of people turn up to interviews knowing nothing about finance. It is essential to have a more holistic understanding of what is going on in the real world – and not just on your physics course.

About the author
Benjamin Rosenberger is an equities analyst at UBS. Rob Thomson is a quantitative equities trader, also at UBS's London office.