Dr Karen Croxson, Head of Research & Deputy Chief Economist, FCA, kindly spoke to us about how her time as a postdoctoral fellow here at Oxford has helped shape her career.
Q: Tell us about your career after graduating, and how you got to your position as Head of Research at the Financial Conduct Authority.
I continued on an academic career path through two generous postdoctoral fellowships after completing my Ph.D. in economics at Oxford. I worked at the intersection of economics, psychology, and finance to understand and improve decision making and to understand how markets function.
After a few enjoyable years in academia, I became a research fellow at the McKinsey Global Institute and a strategy consultant at McKinsey. This took me across Europe and to the US serving private and public sector clients on some fascinating problems. I spent some time at QuantumBlack, a data science subsidiary of McKinsey, helping organizations harness machine learning and artificial intelligence to gain a performance edge.
When the opportunity came up to move to the FCA as Head of Research, it felt like a natural next step – a chance to bring together diverse skills and work on some tough social priorities. I lead the FCA's scientific research program, integrating economics, data science, and behavioural science to understand markets, design effective policy, and improve FCA internal operations. Our mandate at the FCA is enormous – stretching from protecting vulnerable consumers in retail markets through to enhancing the integrity and resilience of the financial system overall.
Q: What aspects of your degree have been useful in your career?
I’ve always been interested in how markets function and how we can make them work better – a big part of that is understanding how people make decisions and how decisions can be improved. Economics is central to this.
My degrees in economics training help me to reason both abstractly and substantively – both of which have been a real asset throughout my career in consulting and now in scientific research towards evidence-based policy.
One way or another, I’ve often drawn on theory in my work – particularly game theory, decision theory, and mechanism design.
Causal inference is particularly relevant in my current work - understanding how to use observational data or experimental design to isolate the impact of a policy or business decision. Economics and econometrics training really focuses you on this aspect of understanding data. Economists are trained to think a lot about counterfactuals and develop technical skills to analyse them. Causal analysis is critical to outcomes-based regulation, but major tech players and other data-driven organisations are also busy hiring economists to analyse big data and it’s partly due to skills like these.
Finally, behavioural economics forms an important part of our policy toolkit. It has also been very helpful in work with clients, e.g., on improving consumer experience or addressing biases in strategic decision making.
Q: What did you most enjoy about your time studying economics at Oxford?
It was an incredible time in my life. I developed some truly wonderful friendships in the economics department and was fortunate to be part of two amazing colleges – first Balliol and later New College. It was a rich experience in every sense, and just a completely unexpected gift in life really. It was something I had never imagined or hoped for years earlier, hanging out with some brilliant mates and having an entirely different kind of fun at my “special measures” comprehensive. I enjoyed every second of life at Oxford, had some inspirational mentors, met some of my closest friends, and my husband. These days I give a few lectures and serve on the advisory board for Oxford’s new social data science masters and PhD programmes. It’s always a special place to come back to.
Q: What has been the biggest challenge in your career to date?
Adapting to different cultures has been a big challenge, and I don’t just mean cultural geographies. Each organization I’ve worked with (including global ones) really does have its own distinct language and DNA, and this itself is fascinating. My environment – socioeconomic, geographic, and sector and nature of work – has changed many times during my life. Each time I’ve felt dislocated and experienced some failure, but also felt exhilaration and a sense of growth.
Translating scientific knowledge into meaningful impact in the real world has been another major challenge. It requires more than just technical insights. It’s about taking people on a journey and creating a narrative for change. Getting better at communicating: turning analysis into a story that makes sense (and doesn’t take 80 pages and an appendix to convey!) is something I only really came to appreciate serving executive clients and seeing their decision making (and bandwidth constraints) up close. I’ve worked hard at this and still always look to improve. As humans, we’re always looking for meaning and are attentionally challenged: stories are powerful and ultimately what drive behaviour and decisions.
Q: Why should students think about graduate study in economics at the University of Oxford? What advice would you give someone thinking of applying?
It’s a world-class program and the training is simultaneously enjoyable, stimulating, and serves as a valuable foundation for any career. The department is packed with talented, inspiring economists and attracts people who go on to do brilliant things. Your Oxford college will give you a unique additional home, a place where you’ll forge intimate connections and relationships across disciplines. Truly the best of both worlds. What would be my strongest advice? Just focus about what you want to get out of bed for. What kinds of ideas captivate you, what are you desperate to learn, and what would you work on for free tomorrow? Despite my enjoyment of game theory, I try not to think about bigger choices too instrumentally, as a means to an end. I’ve found it is hard to forecast the distant future in life. I’ve benefitted enormously from sheer luck if I’m honest. I would encourage anyone to focus as much as they possibly can on the kinds of questions that fascinate them and on building relationships they enjoy and value. Embrace life’s ambiguity and the serendipity that can come with that. As technology advances, the social sciences are becoming more important, not less, and there will certainly be meaningful work for people who can think like economists but also integrate well across disciplines. It’s hard to say exactly what opportunities there will be but Oxford graduate study in economics will provide an excellent foundation to make sense of our world as it evolves, make a positive difference (and perhaps even know when that’s happened!), and keep learning of course.