Asset Servicing Focuses on Large System Implementations in Q3

Mark Astbury 02.11.2016

Welcome to Morgan McKinley's Project & Change Management Q3 Recruitment Insights.

The EU referendum had a significant impact on recruitment in Q3 and June in particular saw a hiatus in hiring. For the month leading up to the vote, all financial institutions seemed to wait for the outcome with bated breath. Interestingly, after only two weeks preceding the result of the referendum, the market began to release roles it had held back in the months prior. We had predicted and expected this and the market did resume its buoyancy, with exception of the last two weeks of August, explained by the routine slump that we experience around the summer holidays.

We have seen a rise in the number of permanent opportunities out there, with one British bank in particular focusing their hiring in this capacity. Although the market has made a significant bounce back after the initial shock of Brexit, it is still unclear to many what impact exiting the EU will actually have in the long run. However, regulations are widely believed to remain very similar and most current deadlines should be hit before the potential leave date in 2019. For the majority of businesses we are engaged with, it is ‘business as usual’ for the foreseeable future.

With regards to Asset Managers and Custodians, the market performed reasonably well up until July when things began to slow down. As mentioned previously, this could be explained by the quieter summer holidays but it could also be down to the fact that some firms are looking at their current resources and discussing their budgets for next year. Evidently, many firms won’t be keen to bring people on board until they are given or build a clear plan for 2017.

Much of the work we have seen this year, and specifically in Q3 has been around large system implementations in Asset Servicing. One large Global Custodian is just over a year into a 5 year programme to streamline their Corporate Actions, settlements and payments systems, so they have been steadily hiring for this initiative. Target 2 Securities (T2S) has also been a focus for some of the Asset Managers, but this has been slowing down recently due to the implementation date early next year fast approaching. Regulatory initiatives have also been a key focus for many of the Asset Managers as they were tasked with building a regulatory infrastructure robust enough to contend with MIFID II. The consensus is, that this will continue leading into the implementation of MIFID, and, according to Grant Thornton consulting, a mere 17% of Asset Managers feel they are in a position where they are prepared to comply with MIFID II, so evidently there is a huge amount of work ahead.

In addition, we have seen a demand for Compliance Change candidates, specifically with previous experience in KYC and Client On-boarding initiatives. One global banking institution continues to look for strong Business Analysts with AML, Anti-Bribery & Corruption (AB & C), Sanctions and Financial Crime knowledge. Another global bank is in the process of setting up a change function to focus mainly on client on-boarding and KYC for all areas of the bank, other than retail. This will be a 4 year programme and will be one of their most high profile initiatives, so we expect to see a rise in the demand for Project candidates with this background. With such a heavy link towards the regulatory nature of the banking industry, we expect the synergy between these two areas to continue for the foreseeable future.

As a general rule, risk change has had a quiet year so far; there has only been one firm who has really been hiring contractors in Q3, whereas most other banks have a permanent focus at present. This bank is currently moving into stage 3 of their BCBS 239 programme. The hiring has focused around Programme Managers, Project Managers and Business Analysts. They also have a number of programmes looking at their finance and risk data, majority of which have a regulatory focus. Lastly, their stress testing programmes have also been busy however this will look to ease down towards the end of the year. They are looking into IFRS 9 and will be hiring late this quarter or next quarter. A large British Bank is also currently looking at their risk and finance data from a CRD4 perspective and is hiring both contractors and permanent employees into this area.

It’s been a fairly quiet few months in finance change but the keys skills the banks are looking for at the moment are around IFRS 9, Data Quality and product control. With regards to IFRS 9, the banks have now set up their programmes and the work has therefore moved away from project scoping and setting up the Target Operating Model. Therefore, the demand has shifted away from large consultancies and towards more delivery focused independent contractors. This has been across all 4 “pillars” of IFRS 9, from classification and impairment through to reporting processes and standards. In the Product Control space, most hiring has been driven by ring fencing by one of the large Global banks.

General finance change experience has been sought after as banks carry out “as is” analysis of their current systems and processes to set themselves up for an easier legal entity restructure closer to the upcoming deadline. This firm hired around 10-15 contractors, mainly in the product control space a couple of months ago.

Overall, in the Banking world, the main areas of hiring have been within the well funded regulatory change initiatives, mainly around MiFID II. Most the roles have been at the Business Analyst level, but with a handful of Project Manager and PMO roles coming through. Some of the banks are also looking to a consultancy model to fulfil their regulatory change requirements, so we have seen MiFID II roles come through from some of them. Other areas which have seen hiring include Ring Fencing, Business Process Design and Cash Management. The ‘sudden rush’ of activity that we have been waiting for this year hasn’t quite managed to manifest into anything tangible as of yet. However, at the time of producing this report, there has been a recent surge in roles across the market as we move to the business end of the year and delivery dates. Let’s hope this is a sign of positivity to come, rather than a passing ‘good will’ train.

Mark Astbury's picture
Associate Director
mastbury@morganmckinley.co.uk