Who's Hiring In Finance Change

Mark Astbury 11.02.2016

Ordinarily, this time of year there is something of a boom in the banking recruitment world across change. Bonuses are paid, budgets are set and strategies are in place. However this year has been very different, but why?

This comes down to several factors but the main one is profit. The first year end reports show substantial drops in profit among some of the big UK banks. These come from a myriad of reasons; uncertainty in the market reducing investor confidence; tightened regulations around capital; out dated systems; low interest rates and often clunky middle office processes. All this has led to massive cost cutting initiatives across these institutions culminating in large job cuts and a slow start to the recruitment market in 2016.

So what does this mean for hiring? What are the banks spending their money on and what do they want to achieve?

There seem to be 3 main threads to this, but all tie in with one another.

1.    Cost saving programmes: These programmes reach out into all areas of the banks, from back office IT systems to the very product that they offer. There are of course both simple and more complicated ways of cutting costs; new reporting systems, enhanced processes to reduce levels of labour intensity (both massive in areas such as Product Control, which has seen minimal levels of hiring recently) and naturally, all out headcount reductions. 

The ever growing area we see right now is that of digitalisation. Digitalisation in banking has two main effects. First, as the need for face to face banking reduces the need for branches, creating low hanging fruit for cost reductions. These new digital systems have also greatly increased the efficiency in the back and middle office by reinventing clunky and outdated processes and systems, which is another easy win for cost savings. However, secondly it has greatly enhanced the product they have to sell (at least on the retail side). This is a massive area of investment for banks and while jobs in these areas aren’t entirely safe, they remain at the top of the overall banks’ agendas. 

2.    Data governance: There seems to be a general move in the banking industry to create a “golden source” of data. Banking systems are often old fashioned and fragmented. Sheer size, divisional differences and years of acquisitions and mergers have left important data strewn across a plethora of archaic databases which simply aren’t fit for purpose. To bring all of the data into a single, controlled and accurate database is an almost impossible task and could take as long as a decade. 

The other reason for these new single sources of data is regulation, be it MiFID II, ring fencing or the evolving IFRS. The regulators have brought in a vast array of regulations which change day in, day out. To find the necessary data with the current systems and be certain that it’s accurately reported is again, almost impossible. Therefore these new systems have to be built with the correct functionality to do daily regulatory reporting. The benefit for these programmes is that they are often designated as mandatory change. Budgets are untouchable and strong candidates could be employed in these positions for very long periods of time with relative job security. 

3.    Regulations: This is arguably the safest area in change in the market right now. All roles in this area are priorities as the banks have to be compliant. There is no strategy or grand business goal behind it; pure and simply these programmes mean that the bank can run legally and they will feed into every area of the business. Many of these programmes are up and running, however MiFID II and ring fencing are well and truly in the pipeline. These, alongside the ever growing other regulatory programmes will be enormous areas of hiring over the next few years.

So what does all this mean for 2016? 

The three threads mentioned are but a few of the things driving banks right now but all seem to come together as a unified business strategy; reduce manual processes in the back and middle offices’, enhance systems front to back, create golden data source and ultimately, cut the bottom line, all within the correct regulatory framework.

This could be an excellent year for the smaller banks, who have no need for these large scale group programmes and who are by and large set for the regulators. The question is what they want to do strategically and how they plan to take the initiative against the big players.

This looks to become a year of consolidation, steadying the ship and preparing for future growth and development. How long this process will take is hard to say, but the best bet, is to get on board because these will be the most secure areas available.

Mark Astbury's picture
Associate Director