Risk Management Division

Proud to be different

Assessing numerical proficiency for analytical

roles in the financial services sector

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Matthew JonesIntroduction

Cardiff University (1995 – 2013)

BSc Maths and Statistics

PhD in Experimental Design

Lecturer in Computational Statistics for 2nd year Maths

HBOS & Lloyds Banking Group (2005 – 2012)

Senior Risk Analyst, Manager then Senior Manager

Created Industrial Placement Scheme

Recruited > 50 graduates from Cardiff University Maths department

Nationwide Building Society (2012 – Present)

Senior Manager in Retail Modelling and Cards Risk

Recruited ~ 15 graduates in last 2 years

Support graduate recruitment and developing University relationships

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Pre-Screening

Pre-screening uses tests that can aid in identifying how well a candidate will perform in the job, and helps hone in on the top candidates to progress to interview

Numerical Reasoning Tests

These typically consist of:

Tables to identify relevant facts, and working out %’s and averages

Using basic ratios, decimals and fractions

Financial institutions use them to:

Determine if the candidate progresses to interview based on a cut-off

Rank order multiple candidates

CV Vetting

Decisions on whether to progress are also made on information in the CV, such as qualifications, any relevant work/project experience and fit into team culture

Identifying the best candidates early – leveraging testing to determine applicants that have requisite skills

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Pre-Screening High volume basic maths tests – candidates required to perform basic analysis under time pressure

The tests:

typically multiple choice, ~20 questions in ~20 minutes

challenge the candidate to work smartly under time pressure

Practise tests are readily available online e.g SHL direct, Unversity of Kent etc.

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Individual Test One-to-One exam with candidate – provide information to the candidate and question in face to face situation

QUESTION 1:

Calculate the Sales per Contact Rate for the whole week

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Individual Test

QUESTION 1:

Calculate the Sales per Contact Rate for the whole week

4.1%

One-to-One exam with candidate – provide information to the candidate and question in face to face situation

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Individual Test

QUESTION 2:

Contacts cost £1 each and Sales revenue is £35.

Which day is the most profitable?

Observe communication style – a good opportunity to see how effectively the candidate explains their work

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Individual Test

QUESTION 2:

Contacts cost £1 each and Sales revenue is £35.

Which day is the most profitable?

Monday (£1,100)

Observe communication style – a good opportunity to see how effectively the candidate explains their work

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Individual Test

QUESTION 3:

How could you increase profit?

Possible suggestions: (1) introduce cross training, (2) conduct analysis to see why Monday has better targeting, (3) pool resource into more profitable days etc.

Test applicants business savvy – opportunity to see how practical and business minded the candidate is

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Individual Test

QUESTION 4:

Sales can increased by 20% through either (A) £5 bonus per sale or (B) prize draw for £740. Which combinations of days and incentive maximise profit?

Behaviour under time pressure – gain insight into how the candidate behaves under scrutiny and time pressure

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Individual Test

QUESTION 4:

Sales can increased by 20% through either (A) £5 bonus per sale or (B) prize draw for £740.

Option B, Monday - Thursday (£1,930)

Which combinations of days and incentive maximise profit?

Behaviour under time pressure – gain insight into how the candidate behaves under scrutiny and time pressure

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Group Test Testing analytical and interpersonal skills – broader soft skills required to complement numerical skills

Group Exercise

Key elements:

Business scenario provided with key information nested in brief

Candidate required to come up with a business case based on their own calculations

Candidate individually present their business case to the group

Group discussion then held to decide which business case will be put forward to the board

Member of group put forward to present findings

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Group Test Attention to detail and numerical ability tested – success of final strategy dictated by eye for detail

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Group Test Attention to detail and numerical ability tested – success of final strategy dictated by eye for detail

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Group Test Probing questions – several questions asked in the final presentation that require deep understanding of report

Was the Acquisition cost kept below £1 Million? As “The company only has a limited amount of resources (i.e. money and manpower)” it would be sensible to spend the same or less than the previous year (£1M).

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Group Test Probing questions – several questions asked in the final presentation that require deep understanding of report

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Group Test

Was the Acquisition cost kept below £1 Million?. As “The company only has a limited amount of resources (i.e. money and manpower)” it would be sensible to spend the same or less than the previous year (£1M).

Were losses kept to an acceptable level? In the document is says “keeping losses[1] at acceptable levels” where the Loss in the footnote was £400K.   .

Probing questions – several questions asked in the final presentation that require deep understanding of report

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Group Test Probing questions – several questions asked in the final presentation that require deep understanding of report

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Group Test

Was the Acquisition cost kept below £1 Million?. As “The company only has a limited amount of resources (i.e. money and manpower)” it would be sensible to spend the same or less than the previous year (£1M)..

Were losses kept to an acceptable level? In the document is says “keeping losses[1] at acceptable levels” where the Loss in the footnote was £400K.   How much profit was there? As the company was looking to maximise profit and was “growing sales and profit by approximately 10% every year for the last 9 years”  I was expecting Profit of at least £880K (as this is 10% on last years £800K profit).  

Probing questions – several questions asked in the final presentation that require deep understanding of report

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Group Test Probing questions – several questions asked in the final presentation that require deep understanding of report

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Group Test

Was the Acquisition cost kept below £1 Million?. As “The company only has a limited amount of resources (i.e. money and manpower)” it would be sensible to spend the same or less than the previous year (£1M).

Were losses kept to an acceptable level? In the document is says “keeping losses[1] at acceptable levels” where the Loss in the footnote was £400K.   How much profit was there? As the company was looking to maximise profit and was “growing sales and profit by approximately 10% every year for the last 9 years”  I was expecting Profit of at least £880K (as this is 10% on last years £800K profit).  Which Channels were used? It states that the company “favours acquisition exposure to a broad base of customers” therefore I was expecting all channels to be covered even if this was to the detriment of profitability (this could be done by only investing a small amount in the unprofitable channel).

Probing questions – several questions asked in the final presentation that require deep understanding of report

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Group Test Probing questions – several questions asked in the final presentation that require deep understanding of report

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Group Test Final question required understanding bigger picture – candidate must have good grasp of finance to answer

Was the Acquisition cost kept below £1 Million?. As “The company only has a limited amount of resources (i.e. money and manpower)” it would be sensible to spend the same or less than the previous year (£1M).

Were losses kept to an acceptable level? In the document is says “keeping losses[1] at acceptable levels” where the Loss in the footnote was £400K.   How much profit was there? As the company was looking to maximise profit and was “growing sales and profit by approximately 10% every year for the last 9 years”  I was expecting Profit of at least £880K (as this is 10% on last years £800K profit).  Which Channels were used? It states that the company “favours acquisition exposure to a broad base of customers” therefore I was expecting all channels to be covered even if this was to the detriment of profitability (this could be done by only investing a small amount in the unprofitable channel). Was the fact that there was an economic downturn taken into account? As per earlier statement on losses, I would have expected this to be baked into the calculations as it would be forward looking and future proofing the business.

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Group Test Testing analytical and interpersonal skills – broader soft skills required to complement numerical skills

Group Exercise

The group test provides a great opportunity to observe:

candidates ability to filter critical information from a report

numerical capability in obtaining proposed solution

communicating skills in presenting their findings

influencing & collaborative skills in determining the proposed group approach

ability to work on their own and in a team

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Other Making the candidate think on their toes – agility can be tested by asking questions that would not be expected

Logical Reasoning Questions

Logical reasoning questions can be used to test the candidates ability to think on their feet and also the assessor can gain an understanding of how pragmatic they are.

Examples include:

How many clocks are there in the UK?

How many hair dressers are there in the Wales?

How many light bulbs are there in England?

How would you estimate the weight of a tree?

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Any Questions?