Waters Wrap: Quants, CDOs, and the blending of job titles

When you ask Yury Blyakhman what he does for a living, he’s likely to respond simply: “I’m a quant.” While true, it’s also a bit of an understatement.

Cribbing a bit from his LinkedIn profile, after earning a Master of Science in applied physics and math from the State University of Nizhni Novgorod in Russia, Blyakhman came to the US in 1994 and received his Ph.D. in physics from New York University in 2001. He landed his first job in finance at BNP Paribas, where he spent nearly three years as a quant on the firm’s interest rates desk. Then, in 2004, he joined JP Morgan. Two decades later, he’s the chief data officer for rates, fixed-income financing, commodities, currencies, and emerging markets businesses at JP Morgan. On top of that, he also heads the rates, currencies and emerging markets quantitative research team, which is responsible for providing analytics, automation, and optimization quantitative support to trading, sales, and automated trading strategies groups globally.

So yeah, Blyakhman is a quant…but quite a bit more. Interestingly, though, he also recently took on an additional job title—chief data officer.

At our annual North American Financial Information Summit (Nafis), which was held in Manhattan on May 16, I had the pleasure of moderating a panel that included Blyakhman, as well as Rachel Zhang, managing director and head of fixed-income front-office technology for Jefferies, and Randy Goldsmith, managing director and head of global institutional rates technology for Tradeweb.

At the event, Blyakhman said that he “stumbled into data analytics, machine learning, and artificial intelligence” as the result of being a quant. I asked him if, 10 years ago, he would ever have thought he’d also be a CDO. Here’s what he had to say:

“The world is changing—I definitely didn’t think of becoming the CDO even a week before it happened,” he said with a laugh. “But thinking about it, I was among the few advocating that the chief data officer title had to reside with the quantitative function. [It became obvious to everyone], but if you roll back maybe another five or 10 years ago, then it was [thought to be] obvious that [the CDO] was a technology function—no one in the front office [should’ve] even [knew] what a chief data officer is.”

He noted that the data is the same; it’s just that there’s simply more of it, and there are better and smarter ways of using it. Blyakhman said that when he first joined Wall Street 23 years ago, his first assignment was to build machine-learning models for predicting a crisis in the bond market.

“The machine-learning models that we’re talking about were built in the ‘60s—they’re not new at all,” he said. What was slowing innovation down, though, was the ability to access data, quickly process it, and clean it.

“So what changed five years ago—three years ago?—well, all these obstacles went away,” as quants gained these abilities through partnering with the technology function.

While Jeffries’ Zhang comes from the world of tech and not quantitative analysis, she still echoed Blyakhman’s sentiment.

“Automation makes the trader faster; data makes them smarter. You just can’t separate them,” she said.

That wasn’t necessarily the case all that long ago. When I started at this publication almost 15 years ago, we had two distinct lines of coverage. Waters Magazine wrote about technology; Inside Market Data and Inside Reference Data covered (you guessed it!) data. Through the years, though, as data and analytics systems become more intertwined thanks to wider adoption of cloud and artificial intelligence, as Zhang said, you just couldn’t separate tech and data anymore.

“Twenty years ago, I started as a developer working on our fixed-income trading platform,” Zhang said. “Back then, my job was to make sure that you could settle the trade, front to back, make sure you could calculate the pricing, and manage the risk. But it was very much about post-trade. If I think about what I have to do nowadays, as opposed to 20 years ago, analytics is a key change.”

A new role and a new day

The evolution of Blyakhman’s job responsibilities mirrors larger trends in the industry. Listening to Blyakhman’s story reminded me of a recent story written by our Max Bowie, which examines a new role that is becoming increasingly popular in the capital markets—the chief data and analytics officer.

The role of CDO has been a bit of a confusing one in the capital markets. Is it someone who is just responsible for data governance? Or creating that so-called “data-driven culture”? Do they control what data comes into the firm and how that data enters the organization? Do portfolio managers, traders, risk managers, and ops folks have to go through the CDO, or does the role simply do their bidding? Do they have a budget? Are they in charge of haggling with data vendors and managing data costs?

While many would say, “Yes, and…”, I think in practice, it’s not that simple. Putting an ROI on your CDO’s head has always been an issue in the capital markets.

But the role of the chief data AND analytics officer, or CDAO, acknowledges what Zhang was saying—you can’t separate data and technology.

About 10 years ago, as financial institutions started to see the true potential of cloud infrastructures and became more comfortable with the cybersecurity risks inherent to cloud, the era of Big Data was ushered in. What firms learned was that you could have all the data in the world, but if you couldn’t structure that information to provide context, your data empire was largely useless.

In 2021, Vanguard created the chief data analytics office, and named Ryan Swann as the asset manager’s CDAO. From that aforementioned CDAO story, Swann explained how the office works:

[T]he office’s primary responsibility is managing Vanguard’s entire data lifecycle—specifically, how the firm manages, stores, and uses data to give investors the best chance of success.

Secondly, the office is responsible for descriptive analytics, predictive analytics, and advanced analytics, which include artificial intelligence, machine learning, data science, and behavioral science. Finally, the office also has responsibility for data governance and what the firm calls “data defense”, which ensures it is using data and developing analytics in a “responsible” way.

His role takes the traditional governance and data oversight responsibilities of a CDO, and applies them to new opportunities, taking an offensive strategy compared to the mostly defensive focus that CDOs have pursued in the past.

Now, as anyone who has ever worked in a corporate environment knows, sometimes people like to give themselves “big” titles—not only am I the CTO, but I am the head of cybersec and head of EMEA platform…or whatever. But the role of CDO was a necessary evolution, even if firms have struggled to define it. And while still relatively new (10-20 years, depending on the organization), it’s only natural that it should evolve quickly, too.

The fields of machine learning and generative AI are growing at a dizzying pace. Firms are struggling with how to modernize legacy infrastructure to take advantage of the cloud. Technologists keep on trying to get senior executives to understand the importance of interoperability. APIs are changing the way data is delivered. Open-source tools are allowing companies to be more nimble when building something from scratch. As is low-code development, which can help reduce the need to bring on a ton of engineering talent.

As technology changes and data analytics takes on ever-greater importance, so too must job functions. While JP Morgan’s Blyakhman wasn’t expecting to become a CDO at the bank when he joined in 2004, my guess is that future quants will need to understand better the duties of a CDO, or CDAO, or whatever new-fangled data title gains favor on Wall Street in the future. Data—and the ability to present it clearly—is king.

The image accompanying this column is “Dancers Practicing at the Barre” by Edgar Degas, courtesy of The Met’s open-access policy.