Firms in Race to Meet Regulatory Deadlines

Firms in Race to Meet Regulatory Deadlines

Mark Astbury 15.02.2017

It seems that the promise to trigger Article 50 at the end of March and the likelihood of us leaving the single market hasn’t deterred some banks and asset managers.

The start of the year is usually a fairly quiet time in the financial services market for hiring, however 2017 seems to be different. The last 6 weeks have just carried on from last December, so we haven’t seen any let up in the appetite to hire from a lot of firms in the city. Even over the festive period, roles were being released and offers were being made which was very unusual compared to years gone by. 

There was much uncertainty for the first 6 months of 2016 due to the referendum, many firms held back on their hiring and only came out to the market when it was absolutely critical. We then hit the summer holiday period which is always notoriously quiet, but since September it has been non-stop, mainly around getting people onboard for MiFID II and Ring Fencing initiatives. FRTB is an area where there’s a big focus at the moment for many places, as the deadline of January 2019 draws closer. Last month dragged its feet slightly with the release of roles in this space but there has been more noise in February and it's only a matter of time before the shackles are off with regards to increasing headcount. 

It seems that the promise to trigger Article 50 at the end of March and the likelihood of us leaving the single market hasn’t deterred some banks and asset managers. At the moment, no one really knows how the negotiations will go or what it will mean for the financial services sector, but firms understand that work needs to be done whatever the outcome. They know there is a good chance they will need to move some of their operations into Europe and have started planning for this, but it is unlikely they will go ahead until things are confirmed. The sentiment, therefore, is very much business as usual, as managers race to get the best people onboard for a lot of their impending regulatory deadlines in 2018 and 2019.

The Supreme Court threw a slight spanner in the works on the 24th January stating that Parliament must vote on whether the government can begin the Brexit process. However as predicted the Commons voted heavily in favour allowing Mrs May to activate Article 50 and only the House of Lords stands in the way now but it’s hard to see them putting up much of a fight. 

Donald Trump also saw Theresa May soon after coming into office which in some ways can be seen as a positive sign for the UK as she was the first Prime Minster he met since his Inauguration. He’s keen to build on an already strong relationship with the UK and be the first in line to offer us a trade deal when we leave the EU. There are talks of tariffs being cut and it being a lot easier for workers to move between the two countries, which can only be a good thing for both sides. However, some of his recent decisions have left people wondering whether this is the best approach for the UK. There are also concerns over his politics as his overall rhetoric is highly protectionist and isolationist. This doctrine is completely contradictory to the idea of opening up borders with the UK so it will be interesting to see what deal is done.

As mentioned before a lot of the work we are seeing is around MiFID II, FRTB and Ring fencing, but this will change as we move through the year and teams are fully staffed on these initiatives. Roles around IFRS9 and Compliance (KYC/AML/Financial Crime) are still prominent and we continually see requirements for project professionals with these skill sets. As well as looking for Business Analysts and Project Managers with a regulatory knowledge, Asset Managers are also hiring people with a Front Office background or system change experience. Due to regulations within the AM market there has been a synergy in front office implementations to better prepare for long term success in a challenging market. 

One of the large global custodians is also continuing to hire on their multi-year asset servicing initiative as it moves into Phase 2 of the programme. Timelines for T2S are currently up in the air, due to European factors, so there is a little uncertainty around this regulation and how many heads are needed at this point in time. Cash management, KYC and Capital adequacy are also high on the agenda at a few firms, so we are waiting for a surge in roles in this space.

Away from mandatory programmes, the next big thing in the market could be the introduction of new technologies such as Blockchain into the banks and other financial services organisations. They are taking it very seriously as an option for future business and how we make transactions, so there is a lot of excitement around this cutting edge technology. For some of them, this is currently sitting in their Innovation Teams, but as time goes on it could become the future for a lot of places, especially around ‘smart contracts’.

Even though it looks like the negotiations to leave the EU will start in April, it does seem like it’s BAU for most firms at this stage. Let’s hope this continues through 2017 and I will write another update around how things have progressed in the market at the end of April. The bonuses will have been paid out by then, which often has an effect on hiring strategies as people look to move on to their next challenge.

Mark Astbury's picture
Manager | Project and Change Management
mastbury@morganmckinley.co.uk