Virginie O’Shea talks to Shanny Basar about branching out on her own, creating engaging research and staying the course
Virginie O’Shea has a Master’s degree in English Literature from the University of Edinburgh which may help in her mission to prove that research does not have to be boring.
She founded her own capital markets research firm this year in order to achieve this aim. O’Shea said: “The name, Firebrand Research, comes from my beliefs in being passionate about supporting change by providing relevant and actionable research.”
Before launching her own company, O’Shea worked at research and advisory firm Aite Group. By the time she left Aite, she was a research director leading the Institutional Securities & Investments practice which involved setting the strategy for the division while managing a team of analysts around the globe. O’Shea commented: “I was at Aite for more than eight years and loved working there but I had moved up as far as I could in the organisation and it was time for a change.”
She believes research should be more digital and easier to access than a 100-page pdf.
“I have listened to consistent client feedback over the years and research really needs to be more interactive and engaging,” O’Shea added. “Research doesn’t have to be boring!”
She highlighted current trends in capital markets that have been caused by the Covid-19 pandemic including the need to meet compliance requirements in a remote environment; to bolster cyber security and to accelerate the move to the cloud.
“Tier-1 banks generally have less than 10% of their total technology stack in the cloud and this makes remote access more challenging,” said O’Shea. “However, regulators are also looking at concentration risk among cloud vendors and there is a real push to ensure that firms aren’t locked into one provider.”
Another trend is that technology progress lags significantly in some areas, especially outside the front office. For example, there are parts of the middle and back office that still use faxes and O’Shea noted that the industry is still having the same year-in, year-out conversations about automation of areas such as corporate actions. “The pandemic has highlighted legacy technology challenges further, but change will take time and investment,” she said.
On the positive side, O’Shea noted that the pandemic has also shown the resilience of financial market infrastructures and that much of the post-financial crisis derivatives reforms have worked relatively well to mitigate counterparty risk.
“However, there have been negative impacts on liquidity. Some collateral strategies have been under pressure and there has been an increase in trade failures due to manual processes,” O’Shea added. “There needs to be a more holistic and joined up approach to treasury functions, repo and securities lending in the future to prevent collateral or liquidity shortages.”
A survey by derivatives trade association ISDA and consultancy Greenwich Associates last month, for example, found that 96% of UK-based swaps market participants experienced a decline in overall interest rate swap liquidity in late February and early March before government intervention. The report said: “Nevertheless, the cause was not one of market functioning, as it was in the credit crisis.”
O’Shea continued that an area of likely concern for the buyside is the European Union’s proposed regulations for environmental, social and governance (ESG) financing.
“The regulations will be onerous and affect even the smallest fund managers, many of which are not focused on ESG at all,” she said.
A final trend is the pushback on rising market data costs in the US and globally.
O’Shea explained that she fell into finance a couple of decades ago after writing about the insurance industry and becoming interested in technology as people were exploring different ways of doing things.
“Research looks at how people and culture affect change which is fascinating and as an advisor/analyst you can often provide a neutral voice to sort out problems, which can be helped by being a woman,” she said.
However, O’Shea has also walked into meetings with a male colleague from sales and been ignored due to the assumption that he was the analyst in the room.
“My advice to women is to stick to your guns, which can be challenging,” she added. “Sometimes you have to work harder as a woman to prove your capabilities but there is a support network out there.”
She also encouraged reaching out to other women, both internally and externally. “We can share war stories and support each other,” said O’Shea.
Another impact of the Covid-19 pandemic is that it has shown the importance of flexibility and O’Shea believes more working at home should lead to a more diverse workforce in the future.
“The number of women in finance has not increased far or fast enough,” she said.
She noted that it is positive to see firms such as Fidelity International introducing parental leave as equality has to go both ways.
“All-white, male panels in this century frustrate me, especially as more diversity leads to more interesting events and better business decision making,” added O’Shea.
She remembered being on a panel at Sibos, an industry conference, a few years ago with the first black female US navy admiral who said the only role model she had when she joined the navy was Lieutenant Uhura from Star Trek.
O’Shea concluded: “We need to see more women on stage to demonstrate that there are women leaders in the industry.”