Regulations Still Lead the Way in Projects and Change Recruitment

Mark Astbury 13.04.2017

Our latest Projects and Change recruitment update is part of our commitment to add value and keep professionals in the market updated with current information and trends.

Can you believe it is April already and the first Quarter of 2017 has been and gone? As we move towards the Easter weekend, it’s time to reflect on what has been a busy time in both the financial services world and the global political arena. Donald Trump has settled into his office now and is close to hitting a 100 days as the leader of the United States. It started with a lot of controversy but it seems though that business has indeed continued as usual in America. Recent events have shown us that the new president isn’t afraid of upsetting the other significant powers out there and will act quickly if he feels it’s necessary. 

Article 50 was finally triggered at the end of March with a letter to Mr Tusk, so now the serious negotiations can begin in around 6 weeks time once the 27 EU countries congregate at article_50the end of May. Exactly what that landscape will look like really is anyone’s guess but the rhetoric in Europe seems to have eased off recently with the higher profile politicians taking a backseat, perhaps understanding that a hard line wouldn’t necessarily be good for either the UK or the EU. Phillip Hammond’s first budget had a very mixed reaction. It showed nothing in the way of radical policy change though, which could well be exactly what the market needs to hear; the issue is whether or not it’s what is necessary for the UK economy. He did suffer a bit of a disaster as he had to back track on raising the NI contribution for the self employed, especially as it totally went against the Tory Party pledge from a few years ago.

What Has Been Happening so Far

So what has been happening in the Projects and Change market over the past 15 weeks? Well January was a very busy month on the contact side, with over double the amount of roles compared to the same time last year. February was slightly slower but still way up on 2016 and March has been our busiest period so far. Even though there is still a lot of uncertainty out there due to Brexit, the appetite to hire has improved greatly since last summer as firms are just getting on with what needs to be done. More of the roles are coming from the banking sector but there has definitely been an increase in the number of positions we are seeing from Asset Managers and Custodians. This has a lot to do with some of the big Investment Banks downsizing over the years due to several different factors such as fines, tighter regulations and greater risk aversion, so they have been focusing their efforts more in the wealth and retail space. The projects the Investment Managers are working on have mostly been around regulations, data quality, product management and client onboarding. There has also been a continued desire for strong Business Analysts and now Programme Managers with a custody background for a large multi-year asset servicing initiative. 

Although it is buoyant, a large percentage of the roles we are seeing continue to be within Front Office and Operations regulatory projects and specifically MiFID II.  We have seen hiring within both Tier 1 and the Tier 2 Institutions on the buy and sell side and although the implementation date of January 2018 is fast approaching, these places seem to be keen to increase their team size and bring onboard 'Subject Matter Expert's' for certain work streams. For example, candidates with experience in Algo Trading, Best execution and Investor Protection are in high demand at the moment. Due to the competition to get the right calibre of candidates onboard and with supply restricted and demand increasing dramatically we are seeing a spike in rates. Recently we have also seen an increase in demand for Consultants from a Front Office change background that have prior experience of working with Trading systems and closely with external vendors. 

Although MiFID II is the hot topic we have seen hiring within the EMIR Reporting space as well. This is ahead of the delivery of changes to the regulatory reporting requirements under EMIR Article 9 and these must now be delivered by 1st November 2017. Ring Fencing is also hot on the agenda, as it will be for the foreseeable future, with two of the large banks in the city recruiting heavily to get this huge initiative moving forward, and most of the demand is for specialised product and system knowledge BAs.

Projections

Risk Change contract hiring started off this year quite slowly, and a predicted forecast of a spike in hiring due to FRTB requirements hasn't transpired as hoped as the deadline has moved to the start of 2019. Banking budgets are still tight and most resources are going into the implementation of MIFID II, rather than FRTB. However, we do expect to see an increase in hiring between now and the end of the year as Banks start to wind down their MIFID II programmes, freeing up their finances for some of the other mandatory initiatives. That said, there has been hiring into Regulatory projects such as BCBS 239 at a large British bank, where there has been a need for Business Analysts with strong Market Ratedata skillsets, as well as a good understanding of risk reporting. Another large European Investment Bank has been looking for resources to maintain and modernise their IMM waiver. 

Finance change has remained remarkably quiet in Q1 and carries on the trend from last year. IFRS 9 has brought about some hiring from some of the larger institutions and we expect this to continue to be a growth area but it remains significantly smaller in scale compared to the operational and Front Office regulatory projects. IFRS 9 requirements have been for Business Analysts and Project Managers with a good understanding of either credit risk, financial reporting or previous financial regulatory change experience. There could also be hiring demands arising from the ring fencing programmes as firms will need to separate their reporting architecture to satisfy the FCA guidelines. 

Requirements in the compliance project space have mostly been limited to two major players in the London market with them both recruiting for a number of roles over the last 14 weeks. A Nordic bank has also been seeking to attract talent away from the UK with good rates and added benefits being offered.  In the UK the demand has been mostly for experienced Business Analysts with a few requirements for Project Managers.  Changes continue to be made to systems, processes and operating models with the main requirements being to change the international arms of the global banks with a focus on South America, Southern and Eastern Europe. Avoiding being penalised and fined are high up on the banks agendas in tough economic conditions, which is helping with a steady flow of immediate hiring needs. 

Due to the nature of project work and the uncertainty out there, a lot of places are still opting for the contract option rather than a permanent one. However, two of the larger banks have decided to attempt to redress the balance of temps and FTE’s in their change functions, by looking to recruit more heavily on the permanent side. One strategy is to bring candidates in at a very junior level and to train them up with the hope for them to replace the contractors in the long term future. We have seen hiring from the 'Big 4' consultancies for FRTB, who are looking to add resources in anticipation of the deadline nearing; these roles have been at Assistant Manager, Manager and Senior Manager Grades. A large British bank has also been out in the market recruiting heavily for their structural reform programme, generally at AVP and VP level. Within the permanent market most organisations are beginning to see the value in looking at current processes and utilising synergies between future regulations and system implementations to work on efficiencies moving forward, so strategy based roles have become more prevalent over the last 3 months.

Conclusion

Although a lot has changed since the turn of the year and the future for Britain is unclear, the market seems to be in a much better place than it was for most of 2016. I’m sure we will get the usual slow down as we move into July and August as many people head off on their summer holidays, but this is fairly standard and expected each year. One thing we have started to see more and more of, is roles around Brexit as firms get ready for Britain leaving the EU becoming a reality. As the talks go on the future landscape will become clearer, so I’m sure this is just the tip of the iceberg with regards to hiring in this space. The issue for a lot of change candidates out there is that hiring managers are being very specific when recruiting for roles in their teams. Therefore the biggest challenge for anyone looking to secure a role in the next quarter is to have the most relevant skills required by banks/AMs as the majority of roles received from clients will demand a system/product knowledge specialisation in addition to strong change management skills.  Up to date regulatory experience particularly in MIFID II will ensure you stay on top of the market.

 

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

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