GLOBAL BANKING OPERATIONS TREND REPORT H2 JUL-DEC

Transcription

1 GLOBAL BANKING OPERATIONS TREND REPORT H2 JUL-DEC

2 CAUTIOUS OPTIMISM BUT A MIXED PICTURE In line with our commitment to keep professionals working in banking operations up to date with employment and recruitment trends, in autumn 2013 Morgan McKinley conducted an international survey of its consultants in six markets. While the overall mood is one of cautious optimism, there are considerable local variations: In most markets, we believe that the situation improved in the second half of 2013 In Singapore our survey suggests that there was no discernible change In none of the six markets surveyed is the situation getting worse Nevertheless, recruitment freezes and other costsaving measures are inhibiting growth (Hong Kong is showing signs of being an exception). Most recruitment is focused on replacement headcount Knowledge of new regulations is regarded as a premium asset everywhere In most markets, the market has been stagnant at the senior level. An exception is China, where the talent war is hotting up In Hong Kong and Ireland the market has picked up significantly year-on-year In Japan, there is a shortage of talent at the junior level but Japanese companies remain reluctant to recruit candidates from abroad In Singapore, many core operations functions are being outsourced. However, demand for local talent is increasing in other areas In the United Kingdom, there is a trend towards onshoring/near-shoring functions to regional locations outside London Overall the recruitment market is evolving and our advice to candidates is to be flexible but to take care when considering a move seek the advice of your trusted career ally QUICK LINKS CHINA... 2 HONG KONG... 3 IRELAND...4 JAPAN... 6 SINGAPORE... 7 UNITED KINGDOM...8 1

3 It is increasingly advantageous for candidates to have good relationships with the regulatory boards. CHINA REGULATORY CHANGES DRIVING RECRUITMENT In China the market shows signs of improvement despite continuing economic uncertainty, consolidation of functions and declining recruitment budgets. The main functional areas driving growth are controls and regulation, business management and investment banking. Regulatory changes are happening very rapidly and with increasing frequency. Candidates need to stay ahead of the curve, and locally based Chinese nationals have a distinct advantage. At the top end of the market the talent war is hotting up as ambitious local banks are looking to recruit senior banking operations professionals, driving up salary packages. OUTLOOK Candidates will be inclined to stay put as the economy is likely to flatline over the next six months. Things may pick up again from 2Q It is (and will remain) increasingly advantageous for candidates to have good relationships with the regulatory boards, especially for senior roles. Experience in compliance and audit are viewed favourably at the top end of banking operations. 2

4 The market is growing in areas such as regulatory reporting, operational risk and business management. HONG KONG POSITIVE ENVIRONMENT FOR AMBITIOUS CANDIDATES OUTLOOK The Hong Kong employment market has seen a marked improvement, largely as a result of staff moving to new employers and organisational change. With a shortage of local qualified talent, things look very positive for ambitious candidates, especially if they have experience in key areas such as controls and regulation, trade support and clearing, and business management. There is a general mood of optimism about the economy and recruitment budgets are increasing. The picture is not entirely rosy: some hiring departments still face cost constraints such as pay freezes while many banks are looking to offshore certain functions. However, this can have some positive knock-on effects for recruitment. We have seen replacement trade support roles being made at a junior level, with hiring managers willing to train up new starters. This, it would appear, is linked to cost saving initiatives. One of our consultants based in Hong Kong comments, We are rather surprised that the market improved by such a margin year-onyear. We suspected that it would pick up but the demands of regulatory operations, control and cost management have translated into a buoyant and overwhelmingly positive market. We believe that candidates will be much more proactive in seeking new roles over the coming year. The market is growing in areas such as regulatory reporting, operational risk and business management, therefore candidates are more willing to move. Training in new regulations such as DFA, Basel III and FATCA will greatly increase candidates chances of landing an interesting and rewarding new role. Employers are on the whole happy with the quality of candidates coming through, although with the greater fluidity in the marketplace they do sometimes express concerns about employees staying power. 3

5 Our advice to candidates is to up-skill and increase your exposure. IRELAND SURPRISINGLY STRONG UPSWING IN DEMAND In Ireland the economy is picking up again and this is reflected in rising recruitment budgets for operations staff, with organisational change further driving demand for talent, particularly in the areas of client onboarding, fund services, mortgage arrears, loan restructuring and, in the light of regulatory changes such as AIFMD, risk and compliance. The general upswing in demand over the past six months has been a pleasant surprise and we expect this mood of optimism to continue, comments one of our Dublin-based consultants. We have also seen major employers taking on more talent acquisition staff. At the same time, outsourcing and offshoring increased in 2013, with a large number of fund administrators moving manual functions such as reconciliations and trade processing to offshore locations. We have observed employment patterns in Dublin gradually transitioning as the city becomes more focused as a centre for oversight and client services. The pool of well-educated candidates in Ireland is strong, and there are excellent courses on offer, for example from the Project Management Institute and the Institute of Banking, for candidates who want to stand out and advance their careers. As more candidates come forward, competition for the best roles is increasing significantly. The improved climate of optimism has yet to be reflected in salaries at the top end of the career ladder but this may change. 4

6 OUTLOOK Over the next six to 12 months we expect to see continuing demand across fund operations, specifically fund accounting and investor services, project management, client services and onboarding. There may be fewer risk and control opportunities compared with the past six months but there should still be solid demand for talented professionals in this area. However, cost saving measures, pay freezes and continued offshoring may exert some downward pressure on overall demand. As the market has been quiet for a few years many have been happy to sit tight, but with the recent positive developments we expect to see greater numbers looking for new roles and opportunities. Our advice to candidates is to up-skill and increase your exposure. Volunteer for projects such as re-engineering new processes and assisting with system implementations as well as client on-boarding. If you can also gain certification in project management (in particular PMP) you will be ahead of your peers. You should also keep abreast of regulatory changes and general developments within the funds industry. 5

7 The demand is exclusively for professionals with native-level Japanese language skills. JAPAN ENVIRONMENT HEALTHIER THAN LAST YEAR OUTLOOK In Japan, banks are starting to feel the effects of positive revenue posted in Q1 and Q While it is still early for them to start adding incremental headcount, there is a healthier environment compared to last year; banks are now replacing leavers and back-filling internal movers and promoted staff. The main growth areas are controls and regulation, trade support and clearing, and settlements. Nevertheless recruitment freezes, consolidation of functions and reduced compensation packages are inhibiting further growth in the banking operations employment market, while some functions are being outsourced or offshored. There is currently a scarcity of young (25-30 year-old) talent. Hiring managers are therefore willing to consider junior candidates with different product knowledge to the ones they are looking for and then retraining them. In Japan, banks are generally very unwilling to look abroad for talent. As one of our local consultants comments, Our market has not recruited talent from abroad after Lehman Brothers went bankrupt. The demand is exclusively for professionals with native-level Japanese language skills. At the top end of the market, things are not looking so good. There is a trend to offer flat to lower compensation, and bonuses have fallen significantly in Overall the outlook is optimistic for Controls and regulation and trade support and clearing will continue to drive demand for new employment over the next six months to a year. Our advice to candidates seeking to move on is first, champion your knowledge of over-thecounter derivatives products (in particular FX derivatives, rates and credit); second, keep on top of regulatory changes and how they impact dayto-day operations (in particular hot items such as Dodd Frank); and third, take the lead in getting involved in local, regional and global projects geared to process re-engineering. Finally: don t be afraid to challenge the current process, how it can be improved, how you can add value to your business and clients. 6

8 SINGAPORE Candidates may do well to specialise in areas outside of the core investment banking operational functions. OUTLOOK TREND TOWARDS OFFSHORING CONTINUES Generally speaking candidates will be inclined to stay put and ride out the current tough environment. There are limited new roles available and most candidates would therefore rather not risk a move, unless of course they feel that their bank is going to implement its own retrenchment exercise. In Singapore we have seen no discernible change to the overall employment market in banking operations. Off-shoring of operations staff to countries with lower costs, such as India (Mumbai, Pune, Chennai etc) continues to be an overriding factor. Many banks are going through organisational changes and there is pressure on recruitment budgets, all of this against a background of continuing economic uncertainty. The main employment growth areas in Singapore itself are in functions such as controls and regulations, customer care and onboarding, and trade support and clearing. There is adequate local supply to fill such roles. A Singapore-based Morgan McKinley consultant comments, The market has been static in Singapore over the past few years and it is only in the past six months that we have seen an uptick in demand for operations staff. However, this has predominately been in financial services firms other than investment banks, for example asset management houses. At the top end of the ladder, many redundancies have been made in operations because of cost issues and offshoring to lower cost centres. Salaries have remained stagnant and bonuses in the operations space have been poor. Since demand is increasing elsewhere in financial services while many investment banks are offshoring, our advice to candidates is to specialise in areas outside of the core investment banking operational functions. It is better to focus on the alternative investment funds which seem to still be growing in the region, says our Singapore-based consultant. Meanwhile, employees should take advantage of any internal training that is available in new regulations, compliance and controls. In the current climate candidates are well advised to seek an honest assessment of their career prospects to ensure that their next move is the right one. 7

9 Candidates need to be open to all opportunities, including foreign assignments. UNITED KINGDOM SIGNS OF IMPROVEMENT In the UK the employment market in banking operations is showing signs of improvement compared with the first half of 2013, although recruitment is mainly focused on replacement headcount and budgets are still tight. And, while the economic situation is showing signs of recovery, there is still considerable uncertainty in the sector. One interesting trend is the upswing in near-shoring to regional locations outside London, to replace historical offshoring. The main specialist areas driving demand are onboarding/client servicing, controls and regulation, and trade support and clearing. At senior levels, the market is stagnant. Headcount reduction, pay freezes and other cost reduction measures continue to have an unsettling effect on the market, resulting in short-term thinking. Pressures from head offices to reduce costs are, ironically, driving demand for the more expensive contracting alternative, comments one of our banking operations discipline specialists. Moreover, there has been reduced demand for external training. Meanwhile, there are continuing concerns that universities are not producing graduates with the right skill sets. Leading investment banks are now discussing initiatives to target school leavers. OUTLOOK In the current climate our advice to candidates is to be open to all opportunities (including overseas assignments) and consider roles based on the skills you could add to your CV. Candidates pursuing senior roles must be able to demonstrate the ability to think strategically, as the role of the Chief Operating Officer continues to broaden in scope. 8

10 GLOBAL BANKING OPERATIONS TREND REPORT A MORGAN McKINLEY GROUP COMPANY