Principles of Quantitative Development

2.6 SUMMARY

Before we can understand the trade workflow, it is necessary to keep a working picture of a bank in our mind. Note that what I described above may not be implemented exactly in any bank, but most banks will have equivalent business units with functions segregated roughly along these lines. I must highlight again that we are looking only at a small subset of banking operations that are relevant to our field of quantitative finance and platform development.

A bank or a financial institution is a complex and vast organization. Citibank, for example, had about 380 000 employees at the height of its staff strength. It is only a small fraction of them that are engaged in operations that directly affect an exotic financial instrument such as a structured product. The rest of the staff and business units of most major banks are engaged in other activities, like Consumer/Retail Banking, Wholesale Banking, Private Banking, Investment Banking, Corporate Banking, etc. Some banks may be more specialized in one activity rather than the others. Although important and interesting in their own right, these activities do not all come under a quantitative developer's portfolio of tasks. What is most important to us are the operations of the global treasury, where exotics trading activities take place, and the associated business units that handle different aspects of the trade workflow.