Compliance Change is a consistent growth area and still a large focus for our clients. The last month or so has been quiet due to a number of freezes, and although compliance was effected by this; the majority of large projects were ring fenced. There is a high demand for contractors within large scale compliance projects, which has had a knock on effect to day rates, consistently pushing rates higher. Whilst our clients are trying to convert temp to perm, there is a need for permanent staff within the regulatory and client onboarding space, as this is undoubtedly an area of growth and consistency.
In Risk Change investment banks are currently at very different stages of regulatory compliance across Market, Credit and Operational Risk. Some have made an early move on large programmes such as the Fundamental Review of the Trading Book (FRTB) and are already very organised with entire teams in place whilst some have barely started as they assigned their budget to other regulatory requirements in the first half of the year. This means a number of large investment banks will have significant hiring and regulatory pressure to come in late 2015 and early 2016. Likewise those banks ahead of the market will receive pressure to hold onto talent that has already implemented early regulatory compliance.
The Operations Change market is still buoyant and Q2 has seen a good increase in open roles. There is a vast demand for Project Managers as well as Business Analysts with good experience of the regulatory space. The majority of investment banks have been looking to increase their permanent headcount and reduce the contract resources. The IB operations area has also faced a few challenges with a gap of candidates at AVP level. Current candidates at this level are requesting good increase in their base or looking for the next step up. In asset management, the overall trend has been to lower their contract costs and increase permanent resource. However, often they have found that the salary rates being incomparable to contract rates mean that candidates are few and far between. This has meant that asset managers have had to adjust the salaries on offer to become more competitive and attract the best talent.
The Finance Change market, covering roles that sit within financial control, product control etc. have not been large in regards to volume during 2015 so far, although we have seen this increase since the summer, especially within the permanent market. There is definitely a shortage of good candidates within the permanent market mainly because they are either contracting at present or the salaries available are too low for current permanent candidates to be interested. The pool is also smaller because many of these teams have already been offshored, near shored or the change managers within this space have moved into more of a risk or other change functions many of the biggest finance programmes have already delivered.
There has been consistent hiring across Financial Crime, Client Onboarding and Regulatory roles. Whilst most of the focus has been on AVP and VP level Project Managers and Business Analysts, there is an increase in hybrid BAU and change management roles making this a grey area. We have seen a number of senior roles with the title ‘Lead’ or ‘Manager’ rather than Programme/Project Manager, because of the hybrid responsibilities of the roles.
There has been consistent hiring across Market, Credit and Operational Risk however contract rates are high enough that many top candidates do not wish to consider permanent opportunities. Anything below VP Level on a permanent basis has therefore been more difficult for financial services firms to fill. Market risk candidates with counterparty credit risk expertise appear to be particularly sort after and across risk change there has been a move largely towards risk SMEs at both Business Analyst and Projects Manager positions.
Across Operations Change, the investment banks have been hiring heavily both on the contract and permanent side, in particular within the regulatory area (i.e. EMIR, MIFID II). Other key areas are securities, interest rate derivatives, collateral and data as well as the middle office risk and control function. The focus has been on AVP and VP level BAs and PMs. Hiring in asset management has consistently been in the regulatory change space both on permanent and contract side. Wealth managers have been particularly focused on developing their propositions to sell their products through a digital end to end web portal or app. They have invested heavily in these areas to make sure they have a competitive advantage as the margins get squeezed.
Within Finance Change the majority of the roles are within valuations or IPV and are predominantly at business analyst level. There have been a few other roles that sit within product control or MIS but again the issue, if the roles are permanent, has been the salaries are too low for the experience required. The few contract roles that have been released into the market have been within similar areas and the rates have been fairly good, although again, the pool of strong candidates is still smaller than usual for the reasons mentioned in the market overview.
Within Compliance the investment banks will still be heavily recruiting across financial crime and regulatory Compliance, however it will be increasingly hard to move permanent candidates due to the approaching bonus season, and similarly contract candidates due to the market quieting down as we move towards December.
In the Regulatory Risk space investment banks will hold fire on further spending as they review budgets and assess how well money has been spent. They will however come under pressure to keep hold of their best risk professionals from competitors who lag behind on regulatory requirements. A number of big players who have had freezes are expected to start hiring again to keep up with regulatory compliance demands.
In the Operations Change area the investment banks will be still looking to recruit within the regulatory space. However, majority of the banks are under budget constraints and this will be slowing down the process of hiring. In the asset management space, senior candidates with more pooled bonuses will be harder to persuade to leave which could cause a requirement to buy out bonuses. Therefore the success will most likely be in the contract space for clients that are filling specific demands such as MiFID 2 or IT implementation.
Roles within Finance Change will remain in the minority within the change environment with regulatory, risk and compliance change remaining the busiest areas for the rest of this year and next.