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REGIONAL MARKET COMMENTARY, Q4 2019

• Article by BRUIN Financial

REGIONAL MARKET COMMENTARY, Q4 2019

ROLE PROFILES

Operations

The doom and gloom surrounding the UK economy due to the Brexit uncertainty has certainly been a focal point in 2019, and the recent election did put investment on hold in the UK. Manchester however seems to have bucked the trend with continued investment into the city from various financial institutions.

 

OakNorth Bank has now moved into a new office in Manchester City Centre which has a capacity for 60 people. In addition to new office space, the bank has hired a dedicated lending team based in Manchester, focused on SME lending deals in the north. The expansion in the city has been followed by news of a new appointment. OakNorth has appointed Google’s vice president to the role of Chief Executive. Sunil Chandra, who spent the last 12 and half years at Google in Silicon Valley, has been appointed to meet the tremendous growth opportunities of the business.

 

Manchester has seen a major increase of investment from start-up businesses in the last 12 months with plans for a new start-up bank opening in the city next year. B-North plans to open a network of eight offices across England, combining face-to-face lending with cutting-edge technology. The start-up bank, which has raised £4.5m in seed funding so far, plans to offer small business loans of anything between £500,000 up to £5m when it opens its doors. Manchester will be the first B-North office to open next year, followed by offices opening in Yorkshire, the Midlands and London in stage one.

 

Praetura Group is expanding with the launch of a £40m fund, designed to provide rapid finance to professional services firms across the UK. The initiative – dubbed Praetura Enterprise Finance – has been designed to support accountants, solicitors and other practices with funding that can be approved within 24 hours. Praetura Group have grown in both turnover and headcount over the past 12 months in the North West and shows no sign of slowing down.

 

Julius Baer have just announced plans to expand outside of London into regional locations including Manchester. Julius Bar are a Swiss bank that accepts only customers with at least £2m of assets. The bank, which employs 200 people in London, said two-thirds of the UK’s wealth was held by individuals outside London and the south-east and that it was the opportunity to pull in new multimillionaire customers from the regions that had motivated its expansion plans. The expansion is being announced at a time when other financial services firms are warning they will leave the UK as a result of Brexit and are preparing to move operations to other EU countries.

 

The continued positive investment in the region is welcome news and plans are to continue into 2020 with Unity Trust Bank and Efficient Frontiers International LTD (EFI) both committing to the region in the coming months. Job flow across Manchester has continued to flow steadily with many operations expanding and setting up in the North West, long may this continue.

 

Technology

Technology continues to grow within the Financial Services sector in the North West with particular demand for Developers. Technology is continuing to grow within Fintech, Asset Management, Banks and Insurers as businesses are heavily investing in new technologies and growing technical teams.

 

A recent report has stated that the city of Manchester currently has 100,000 technology professionals with a further 164,000 vacancies for workers with both tech and non-tech skills. New figures also show that tech companies throughout Manchester have raised £450m from investors in the year to date, increasing the demand for technology professionals. As a result, businesses who would have previously described themselves as Manufacturing specialists, for example, have now transformed themselves into technology driven organisations to keep up with the fast paced technology sector.

 

C#/.NET and Java Developers are in constant  demand in the North West and has been consistent throughout our Investment Banking, Asset Management and Insurance clients. Financial Services experience has recently been a requirement from our clients, however due to the shortage of Developers in Manchester, we have noticed that more businesses are now considering Developers outside of Financial Services and focusing more on their technical skills.

 

Women in Tech is still very high on the agenda across all sectors, from start-ups to global corporates., as the gender pay gap legislation and focus on wider gender diversity gain prominence across the UK. Current stats show that only 15% of tech professionals are Women.

 

A recent report showed that women aren’t encouraged enough at education level to undertake a career in technology with only 27% of female students saying that they would consider a technical role as opposed to 61% of males. The outcome of the survey suggested that female students aren’t exploring a career in technology as they feel that it is too male dominated. We have recently seen more businesses and organisations across the North West implementing strategies to encourage more women into technology. Watch this space for a breakfast seminar on the topic coming soon.

 

Finance

Beginning of Q4 saw the emergence of newly qualified accountants join the market from the top 10 accountancy firms. This has spilled over to Q1 with organisations looking to take advantage with the requirement increasing 15% on last year. This has been driven by candidates wanting to gain industry experience within a commercially driven enterprise to give them more exposure and experience to all aspects of the business.

 

We also saw an increase in junior level roles across the industry; this can be attributed to the North West’s shared service centres expanding their function. There were a number of roles within the junior level that were released from October onwards within Financial and Professional Services. This can be highlighted by Greensill’s announcement that they will be expanding, which in turn will create over 200 jobs. Other organisations have also reported a strong end to Q4 demonstrating the continued growth within Manchester such as Begbies Traynor, AJ Bell and Together Money. Within Corporate finance, Grant Thornton has announced that they will be strengthening with the appointment of a debt advisory director for the North and Midlands.

 

April 2020 will mark the end of individuals being able to work through their own limited company due to changes within IR35. We have seen this already have a knock on effect during Q4 and the beginning of Q1. HSBC, Barclays and BNY have all announced that they will be reducing the number of contractors within their finance and other operations of the business. This has created a competitive market for particular roles within projects and finance that are either fixed term contracts or permanent.

 

We continue to see the market dominated by candidates with a preference to client-facing and actively involved within Stakeholder management which in turn has left a gap in the market for financial accountancy roles. We have continually seen our clients reach out in respect to this niche area of the market but also the rise of more complex roles that challenger and start ups need to develop.

 

Risk & Compliance

Q4 2019 has seen a 25% increase on vacancies that fall under Risk & Compliance compared to Q4 2018 which is an expected increase across regional locations. This is attributed to a number of projects the leading banks have set up to ensure they remain compliant and avoid fines which was the case with Standard Chartered £102m fine in April 2019. These projects have been typically seen across AML functions with a large number of contractors but with changes coming into effect following IR35 (off-payroll) working rules we are seeing AML/KYC roles converted to perm/FTC.

 

The big news in the field has been SMCR with FCA solo-regulated firms authorised under the Financial Services and Markets Act 2000 (FSMA), from 9 December 2019, will be subject to SMCR replacing APR (Approved Persons Regime). With the aim being for the FCA to have more power to bring enforcement against certain individuals and their practices, lots of organisations have been more selective in their appointments adding extra layers to the interview process.

 

Throughout 2019, Operational Risk has seen an increase not only in job flow but more requirements set out in traditional ‘operations’ roles with 1st line of defence being instilled across banking culture. As such, the attraction of profiles with a ‘City’ background are still welcomed but the divide in skillset between the North West and London has decreased significantly.

 

Most in-demand Compliance roles:

  • Compliance monitoring officer
  • CASS Reporting Manager
  • AML Specialist

 

Most in-demand Risk roles:

  • Operational Risk Analyst
  • Conduct Risk
  • Regulatory Risk Manager

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