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PROJECTS & CHANGE MANAGEMENT MARKET COMMENTARY, Q4 2015

• Article by BRUIN Financial

PROJECTS & CHANGE MANAGEMENT MARKET COMMENTARY, Q4 2015

MARKET OVERVIEW

Risk Change: Q4 saw considerable movement in Stress Testing as banks looked at the requirements placed on them for delivery in 2016. FRTB and Market Risk requirements also continued to dominate in the market in terms of budget allocation and hiring. Many Investment Banks remain concerned about the potential implications of FRTB on their trading activity moving forward. Compliance is being postponed until 2019 at the earliest and it is thought that this could be pushed back again to 2020. Credit and Operational Risk requirements were considerably less with many Programmes being set up by firms much earlier in the year and no considerable new initiatives on the horizon.

Compliance Change: The Q3 hiring freeze seemed to continue into the last quarter of 2015. Whilst some Global Investment Banks announced job cuts and changes at senior levels, this had a knock on effect to recruitment. However, within Compliance Change, the KYC and Financial Crime remit is still an area of buoyance across perm and contract for our clients. Some clients had requirements in Financial Crime on the permanent side and this looks likely to follow through into H1 2016 due to fines received from the regulator.

Investment Banking Operations Change: We have seen consistent hiring across a variety of roles, with higher demand for permanent than contracting hires as Investment Banks try to increase the number of perm resources and reduce the number of contractors. For Operations Change Q4 has been positive in terms of the hiring trends, with a number of skilled candidates on the market and a good variety of both permanent and contract opportunities available. The end of the quarter saw the market slow down slightly, with several freezes across the banks and subsequent several roles being put on hold, however overall it has remained buoyant.

Asset Management Operations Change: Following a particularly quiet September, Q3 started with very few clients aiming to release budgets for any projects that weren’t absolutely necessary. However, moving into November things looked far more buoyant with clients scrabbling to use budgets by the end of the year as well as releasing roles out to agencies that they had struggled with and needed placing before Christmas. The Christmas slowdown seemed to happen later this year as a result. It finished off a fantastic but volatile year in the Asset Management operational change space.

ROLE PROFILES

Risk Change: Stress Testing Change roles across the spectrum, from Programme Manager, Project Manager and Business Analyst have been readily available. A number of SME roles have also come to market in this space with requirements to act as Functional Leads/SMEs with Change skillsets as well to help implement change across the business at a high level. Counterparty Credit Risk / CVA Senior Business Analysts were also in demand with a number picking up new roles across Stress Testing and wider Regulatory Risk programmes.

Compliance Change: The highest volume of roles from the last quarter of 2015 sat within KYC and Financial Crime. A number of roles at AVP and VP level were urgent requirements driven by fear of losing headcount at year end. Other roles throughout the quarter sat within Financial Crime on the permanent side also, however this is an area being built out even more so next year and will be the main focus for most organisations.

Investment Banking Operations Change: Hiring has been consistent across Regulatory, Securities, Cash and Equities roles as well as within the Derivatives and Collateral space. Whilst most of the focus has been on AVP and VP level Project Managers and Business Analysts, there has been an increase in the number of SME roles and hybrid BAU Operations / Projects roles. In addition to these, clients have been hiring for a number of roles which, overlap with other departments such as Compliance or BAU Operations.

Asset Management Operations Change: Q4 hiring has mainly happened in the areas where regulation was essential with FATCA, CRS and MiFID II continuing to take up a significant amount of hiring. However as we moved towards the end of Q4 it became less and less certain when MiFID would be required to be delivered. This meant that some clients put hiring on hold or hired contractors in the interim. Due to budgets becoming tighter contract roles became far more prevalent at the end of November and December focused on both Target Operating Model work and process re-engineering, hiring both Senior Business Analysts and Project Managers.

PREDICTIONS

Risk Change: Stress Testing requirements in the Change space will continue in the early part of the year as budgets are released and deadlines for new regulatory requirements loom. Because of the negative press associated with failing a Stress Test, banks will be keen to ensure they do what they can to fulfil their requirements. Despite the deadline for FRTB compliance being pushed back, a number of Investment Banks will still look to ramp up hiring for the regulation across what are considered to be Key or Foundation work streams, especially those who have done little work on the regulation to date.  A number of Management Consultancy firms who have won large pieces of work for 2016 will also look to considerably expand their current teams so that they can fulfil the business that they have won.  There will be a large number of candidates in the market in the early part of next year who have been working on BCBS239 as that Programme across all areas of Risk goes live. These individuals will provide Risk Change departments with a wealth of Risk Change options.

Compliance Change: There were a number of fines handed out in H2 of 2015 and a number of job losses which will continue into the first half of Q1 with roles moving offshore and near shore. Regional roles will be a focus across the board due to the changes made in Q4 there seems to be a number of contractors hired for some of the bigger investment banks in the interim until they find permanent headcount in regional hubs. However, this being said, financial Crime change is a massive focus for our clients and is something that isn’t being offshored for the foreseeable future.

Investment Banking Operations Change: Whilst the last quarter of 2015 has shown a decrease in the number of new jobs in the market for Operations Change, 2016 is expected to remain buoyant and recruitment will continue to be busy on both the permanent and contract side.  A great majority of clients seem to be positive about their future budgets and also candidates will be looking to see what other banks are offering as a result of the upcoming bonus payments.

Asset Management Operations Change: It is likely that new hiring requirements will start to be released half way through Q1 continuing to focus on regulatory change but also working on expanding the operating model for Wealth Managers and Private Bankers. Asset Managers may take a little more time as they are likely to be sufficiently resourced until turnover happens post bonus season.