In this third edition of Calculated Conversations, I had the privilege of speaking with Mr. Desigan Reddy, an expert in risk analysis, algorithmic trading, and portfolio management. Mr. Reddy offers a unique perspective on the evolution of financial risk management, from regulatory changes to the adoption of cutting-edge technologies. With experience at institutions like Old Mutual, Absa, HomeEquity Bank, and Luno, he provides valuable insights into how risk systems and analytics are reshaping the financial landscape.

1. You have extensive experience in risk management, having worked with institutions like Luno, Old Mutual, and Absa. What are some of the most significant changes you’ve seen in the industry over the years?

Mr. Reddy: I think the more significant changes I’ve seen have come from regulatory enhancements and the adoption of more advanced risk systems and technologies into businesses.

Following the global financial crises of 2008, regulators really beefed up their risk monitoring and reporting requirements, for banks especially. The Basel Accords, which outlined the risk and governance framework, was notably overhauled, and a particular emphasis was given to improved liquidity management and monitoring. This saw institutions invest more heavily in risk systems to meet these requirements, but also to keep up with advancements in products and services in the industry.

Following this, the LIBOR (London Interbank Offer Rate) scandal of 2012, which involved many highly reputable banks, was another significant event that comes to mind and one that prompted regulators to take swift and meaningful action. The changes made following this have also seen the SARB (South African Reserve Bank) move to replace the current JIBAR rate (Johannesburg Inter Bank Average Rate) with the ZARONIA rate as the new benchmark rate for ZAR instruments by 2026. The transition aims to align local regulations with international best practices and is another significant enhancement from a domestic standpoint.

As mentioned earlier, with stricter and more frequent reporting requirements, institutions needed better risk management systems. The adoption of these has seen a massive step forward in risk evaluation.

Key takeaway: “Regulatory changes following the 2008 financial crisis and the adoption of more advanced risk systems have reshaped the financial industry.“

2. With certifications like FRM, CFA, and CTP, how have these qualifications shaped your approach to risk analysis and decision-making in finance?

Mr. Reddy: Obtaining these certifications certainly laid the foundation for me to better interpret, analyze, and understand potential risks. FRM in particular, I found to be a very comprehensive and interesting overview on risk management. It provided a solid outline both from a quantitative and qualitative perspective on monitoring risk and outlined useful frameworks for mitigating such risks and processes that could be followed, aligned with the industry.

With CFA and CTP, these certifications were not as risk-focused but did provide me with a broader understanding of the markets and workings in the financial industry and were valuable in their own way.

Obtaining these certifications gave me the platform, but ultimately the experience I gained working in the risk environment was also indispensable. Unlike the certifications, which provided guidance from a theoretical standpoint, working in a risk environment gave me the opportunity to learn first-hand how risk is monitored, managed, and mitigated. This working knowledge, together with the understanding obtained from the various certifications, has really helped improve my decision-making and the way I view risks.

Something I’ve come to learn is that history tends to repeat itself. I don’t think relying just on mathematical models of risk works on its own, you need to also understand what has happened in the past and incorporate that into your current decision-making processes. How have the markets reacted in a certain situation in the past? Is the current situation similar? If so, what can we likely expect to happen and how best can we mitigate unwanted risks? These are not easy questions to answer, but understanding the risks, theoretically and practically, helps me to make more informed decisions.

Key takeaway: “Certifications like FRM, CFA, and CTP provide valuable theoretical frameworks, but hands-on experience is indispensable for decision-making and understanding risk.“

3. As someone deeply involved in algorithmic trading and data science, how do you see these technologies shaping the future of financial markets?

Mr. Reddy: I think with the recent wave of AI models that have emerged, the financial industry is becoming more open to making use of such technologies in businesses.

In my view, a lot of work that is being done currently by financial/risk analysts and administrators can be reduced with the adoption of these frameworks. Python, in particular, is a popular programming language used by data scientists, but it hasn’t gained much traction with investment professionals. I see that changing going forward. The likes of ChatGPT and Claude are making it far easier for non-programmers to write code and make use of these systems. Although I don’t think you would get away completely from having at least a basic understanding of coding, the barriers to entry have certainly come down, and I think that trend will continue into the future. We will see more and more financial professionals take up coding and implementing these technologies in their workspaces.

Algorithmic Trading is a little more nuanced. Learning to code is a good start, but with algo trading, you also need to have a solid understanding of the markets and their workings. Errors here could be very costly, so although I do believe we will see an uptake of this, I think the pace will be a lot slower than those just looking to implement AI and coding into their businesses.

Key takeaway: “The integration of AI and coding in finance will increase, but understanding the markets remains crucial, especially in algorithmic trading.“

4. In your experience developing trading tools and dashboards, what have been the biggest challenges you’ve faced, and how have you overcome them?

Mr. Reddy: I think one of my biggest learnings when it came to developing these systems was to firstly make it simple and intuitive so as not to overwhelm the end user and secondly to put yourself in your users’ shoes and think of what would add value to them.

In a few instances, I’ve built dashboards that I found to be of great value to me but were not being used at all by my colleagues. A big reason for that was because of all the unnecessary features I added that just overwhelmed them. I think as a developer, you want to add as many features as you can because you think it will be valuable, but in many cases, it actually does the opposite.

So that was a big challenge for me. I had to understand what was adding value and what wasn’t, and only stick to the essential features that I knew people wanted to see, even though I knew I could do more.

In the end, I think when building these dashboards/tools, it’s really important to keep the end user in mind and to get feedback as quickly and as frequently as possible. Otherwise, you may build something that never really gets used. Getting constant feedback from my colleagues was key in building impactful tools. So don’t wait till you have a finished product; try getting input as quickly as possible when developing new systems.

Key takeaway: “Keep the end user in mind when building trading tools—simplicity and regular feedback are essential.“

5. Looking ahead, what skills do you believe are essential for young professionals looking to enter the field of finance, especially with the increasing reliance on technology and data analysis?

Mr. Reddy: Yes, great question! My advice to any young professional would be to learn a programming language. I think with the way technology is advancing, anyone who doesn’t know at least the basics of code would be at a serious disadvantage. The good news is that there is no shortage of available coding or data science courses, so learning this is really just a matter of time and a little bit of effort. I also think having an understanding of AI and how one can pair that with coding could be a very valuable skill to have in the future.

My other advice to young professionals would be to read and develop a growth mindset. Never stop reading or learning. Whether it’s coding, or how to use Excel, the financial industry is constantly evolving, and developing a consistent learning mindset is essential to move forward in this industry. For me, reading every day and trying to learn new skills is really what helped me advance in my career. For young professionals starting out, if you can do the same, then I am sure that you will have just as much success as I have!

Key takeaway: “Learning programming, adopting a growth mindset, and keeping up with industry trends are critical for success in finance.“

Mr. Reddy’s insights remind us that in the rapidly evolving world of finance, embracing new technologies is not just an advantage—it’s a necessity. For young professionals looking to carve their own paths in the industry, Mr. Reddy’s advice on coding, continuous learning, and staying informed on industry changes provides a valuable roadmap to success. I’d like to thank Mr. Desigan Reddy for his time and expertise, and stay tuned for more thought-provoking discussions with industry leaders in future editions of Calculated Conversations.

How do you see AI and coding shaping the future of finance? Are you already integrating these technologies into your work or studies?