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Probability & Partners offers risk management services for banks, insurers, pension funds, asset managers, supervisors, FinTechs, and family offices. Our clients in each sector include the very top of the Dutch financial industry. Our experience allows us to advise clients at all levels, from the executive and supervisory board to line managers in charge of a specific risk.
How we provide our services depends on the preference of the client. Assignments include providing strategic advice, performing a risk assessment, and building models. Client work can be performed either in teams or alone. For example, a team of Probability employees may be required to work on a specific modeling project (consulting). However, a client may also hire an individual consultant to temporarily lead a department (interim), to fill a staffing void in one of the client’s teams (loaned staff), or to provide senior advice on a project performed by the client (advisory). Clients may also request us to completely take over a specific part of their function in their risk management (managed service).
An assignment typically lasts between 3 months and 1 year. Risk management in the financial industry is a thorough process, so assignments lasting less than 3 months are rare. The location where work is performed depends on the preference of the client. On average you will spend one or two days per week at the client’s office. The remaining days can be spent either at Probability or at home, depending on your own preference. It may also occur that you work on multiple projects simultaneously.
Below you will find a selection of our clients.
Probability and Partners is a consultancy firm specialized in offering risk management services to the financial industry. Risk taking is a central part of the business model of our clients. The goal of risk management is to ensure that risks are taken in such a way that the financial institution does not suffer excessive losses from which it eventually fails.
Our clients can be exposed to a wide range of risks. The services offered by Probability & Partners span the wide range of topics in risk management.
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On a high-level, risks in the financial industry are typically classified as either a financial risk or non-financial risk. For example, a bank may suffer losses if clients are unable to repay their loan (credit risk) or when changes in market rates affect the value of the instruments the bank owns (market risk). Additionally, a bank will be in serious trouble when it has insufficient liquid assets to meet its payment requirements on a given day (liquidity risk). Insurers and pension funds are also exposed to changes in life expectancy which affect future payment obligations (longevity risk), and to changes in returns on their investment portfolio which is held to meet the promises made to policyholders (equity risk).
Although less prominent, non-financial risks play an equally important role for our clients. For example, a power outage may prevent the business from running (operational risk) and a hack could lead to the theft of sensitive information (cyber risk). A model with unidentified shortcomings may be used to make wrong decisions (model risk), while changes in legislation may affect the business model or the value of financial instruments (legal risk). Financial institutions may get fined when failing to prevent money laundering (fraud risk), or may see clients leaving due to bad press (reputation risk).
How a risk is dealt with depends on the type of risk and the client. Broadly one can distinguish between a quantitative and qualitative approach. In a quantitative approach, the aim is to accurately measure the exposure to a certain risk. For example, client behavior can be modeled to predict in which cases a client will exercise his right to prepay a loan ahead of schedule (prepayment risk), and historical price fluctuations and market prices can be used to price a complex derivative. The extent to which a client is exposed to a risk determines the level of accuracy used to quantify the risk.
The accuracy of a quantitative approach may be limited due to a lack of representative data, or because events observed in the past may not be representative of the future. A qualitative approach is therefore complemented by a quantitative approach in which risks are actively steered. Qualitative risk management can involve the identification and prioritization of risks, and the development of a hedging strategy. Other activities can involve solidifying how risk management is organized (governance) or formulating an independent opinion on processes and controls (audit).
We believe that a diverse mix of people is required to excel in risk management. By combining practitioners with seasoned consultants and academics, we are able to give high-quality advice. Our practitioners have years of experience fulfilling a prominent position at a financial institution. Their background as an internal employee allows them to understand priorities, the dynamics between risk management and the business, and how risks are interconnected. They are complemented by our consultants with many years of experience with providing advice and know how to make a lasting impact from the outside. Lastly, our academics have access to the latest insights and are keen to challenge what is known. Their insights bring the quality of our advice to another level and trigger us to think beyond what was done in the past.
The result of our approach is that clients like to ask for our help with problems that are not straightforward. In other words, the solution required is not readily available in a textbook but requires knowledge of a wide range of methods and a thorough understanding of the problem context. This aligns with the character of our people. We want our people to be happy in the work they do, as we believe this will also lead to happier clients. We are therefore selective in the assignments we accept and make sure they are sufficiently interesting and challenging.
Probability & Partners is an English-speaking company; our internal communication and documentation language are English. Our colleagues come from diverse backgrounds, including Russia, Aruba, China, Surinam, Ukraine, and South Africa.
Working as a consultant is different from working as an internal employee at a financial institution. A comparison is presented in the figure below. Note that one is not necessarily better than the other, it all depends on your personal working- and learning preferences.
Our activities in risk management are very broad. During the first part of your career, we will expose you to different types of financial institutions and risk types. Joining Probability & Partners will therefore allow you to find out which topics and sectors you really like in risk management.
There are different directions you can take to develop your career in risk. You can strive to become a specialist on a specific range of risk topics, an expert in modeling techniques, a data specialist, a project manager, or a generalist who is able to transform risk measurement into decisions. We will support you with relevant training in whichever direction you choose to take. There is no fixed budget to support your development, if the training is relevant and you can motivate its purpose you can do it.
Upon joining Probability & Partners we will link you to a senior consultant, who will help you with decisions regarding personal growth. Additionally, the accessibility of our senior- and partner staff is unique. Frequent discussions with them will excel your knowledge development and soft skills.
Working activities for Probability & Partners can be roughly divided into three activities: client work, internal projects, and business development.
Given the nature of consulting it is difficult to predict ahead of time what your week will look like. Client work always takes precedence over internal projects and business development. Assuming a 5-day working week, there may be weeks in which you will spend 4 days working for a client. Vice versa, there may also be periods in which you don’t have any client work. Work can also be ad-hoc from time to time, as a sudden client request may require you to drop your internal project(s) to support the client’s needs.
Internal projects are often centered around research close to your personal interests and with relevance for Probability. Furthermore, an internal project could be the development of a Python package to support research activities, building a calculation tool, or organizing a client- or recruitment event. The figure below gives an impression of work week activities for a junior colleague.
We are looking for people who like solving complex problems but also have a pragmatic attitude. To like working for us, you need to be interested in risk management and the financial industry. To serve our clients well it is important to be communicative and inquisitive. We work in teams for and with our clients, so it is also important that you enjoy working with others. Probability and Partners is a premier brand among risk consulting firms. As such, we look for people with an outstanding academic track record.
To fit well in our team we look for people that dare to challenge, have a sense of humor, and are excited about learning. You need to enjoy helping others, even at times when you are already quite busy. Our internal communication is in English, so you should be highly proficient in spoken and written English. Knowledge of Dutch is not required.
For our quantitative services in risk management, we are looking for graduates with a quantitative background such as Applied Mathematics, Econometrics, Actuarial Sciences, Quantitative Finance. However, we also hire people with a background in areas such as Physics, Aerospace Engineering, and Artificial Intelligence. The common denominator is that you should have had exposure to modeling, data, programming, and statistics during your studies.
We are always open to hiring talented interns to work on their thesis or one of our internal research projects. We can provide excellent supervision from Svetlana Borovkova, who also acts as the program coordinator of the Duisenberg Honours MSc program in Quantitative Risk Management at VU Amsterdam. We therefore have an excellent understanding of how to balance relevant questions from the financial industry with the requirements of your master thesis.
Our company provides multiple quantitative services, of which modeling and validation are the most prominent. Modeling is the development process of building a model, and involves data collection, developing a methodology, prototyping, and backtesting. Validation is the performance of an independent check on a model to ensure the limitations of a model are known and the quality of the model continues to be in line with its role in the organization.
Our people are specialized in a broad range of quantitative techniques. A strong foundation of our modeling business is stochastic modeling in trading risk. Furthermore, we apply Econometrics, Machine Learning, and Artificial Intelligence in areas such as credit risk and asset and liability management. A third important area of our work is performance measurement and sentiment analysis for asset managers.
Examples of recent work by our colleagues:
“I work with quantitative models used by banks to estimate accurate prices and perform risk management for products held for trading. These tasks require a combination of programming, econometrics, and financial mathematics. My average work week consists mostly of programming models, analysing impact & sensitivities, and writing reports for clients. Next to that, I have some hours that can be used to develop my skills.
Probability is a young and flexible company that combines interesting work opportunities with flexibility to develop skills. There is a down-to-earth attitude that focuses on team effort. We have a broad set of people with many different specializations, and we aim to create scale by combining these specializations.
I believe that the culture at Probability is different from most (big) consulting companies. We have a very flat organizational structure. We believe that everyone has their specialty and combining this in teams for project results in efficiency. Therefore, we are actively motivated to develop our skills in a certain area that has our personal interest. For this reason, the development process at Probability is very free and basically, each consultant can decide which skills he/she wants to develop.”
“I have been working at Probability as a quant analyst and consultant in the Modeling department for already 3 years. The first time that I heard of Probability was on a recruitment website. My work entails building and evaluating quant financial models, ESG-and sentiment investment, data management, and portfolio performance measurement. More specifically, I work for a large asset manager for 4 days a week. On the other day I work on sentiment investment and other internal projects.
One of the best things about working at Probability is being in a diverse and flexible environment. Not to mention different types of projects that I am able to participate in. The culture of Probability is quite comprehensive. We value teamwork, as well as independence.
There are different projects and areas that people can work on according to their career planning. Besides working, personal training is also highly supported. One of the unique parts of Probability is that your workdays are never the same. Instead, you will have opportunities to work for different clients and on various projects. In that sense, it allows you to develop many skills and obtain a comprehensive overview of the financial industry.”
