4 big Financial Market trends for 2016 and their impact on hiring – Part 1

Nearly 10 years after the financial crisis erupted, will 2016 be just another year of survival in a decade of gloom for the sector? Or will it be the year of the sector’s resurgence and transformation, resulting in increasing opportunities for candidates? In this blog, we look at the key trends and themes that will influence recruitment in the financial sector this year.

1. European banks return to ‘normality’

 After nearly a decade of underperformance and despite on-going volatility across financial markets, the outlook for the European banking sector is the most promising it has been for years and 2016 could be the year when the sector makes a comeback. In turn, this could mean prospects for candidates in banking  will also improve.

“Balance sheet and P&L developments at European banks overall continue to look healthy. Judging from the latest hard data, the outlook for 2016 remains relatively encouraging, although regulatory uncertainty has made a forceful comeback and is casting a shadow over the ongoing progress in the sector,” says Jan Schildbach, banking analyst at Deutsche Bank Research, in a note on the sector. He points out that profits at the 20 largest European banks were up by half in the first nine months of 2015 compared with the same period in 2014.

“Asset quality is improving and profits in 2015 may be the highest since 2007. The biggest questions surround the future path of regulation, where another major round of tightening could paradoxically threaten the recently hard-won stability, and of the European and global economy, which has repeatedly and substantially surprised to the downside in recent years in 2016,” he adds in the note.

2. Increasing pace of technological innovation

As part of the digital revolution and amid increasing competition from smaller Fintech players, the financial sector is acutely aware of the need to innovate.  

“Technology is fundamentally changing how banks operate and engage with their customers, and as their business models adapt and evolve, so too must the makeup of their workforce – but this isn’t happening at any great speed yet,” highlights Steven Lewis, Global Banking Analyst at EY, in a special report on the future of banking.

“Banks need to foster a culture of entrepreneurialism and technological innovation if they are to prosper in the current environment. This means leaving behind much of the stereotypical banking characteristics to allow for a generation of young, technology-focused professionals to enter the workforce.”

Brand development will be a key requirement if the financial sector is to increase employee engagement and attract the brightest graduates currently poached by the technology sector.

In Universum’s list of the world’s 50 most attractive employers in 2015 for business students, the first financial firm, Goldman Sachs, is in fourth place, followed by JP Morgan and Morgan Stanley in 9^th and 14^th place, respectively. Millenials will make 72% of the global workforce by 2025. Clearly, more work needs to be done to improve financial firms’ attractiveness to the younger generation of tech-savvy and highly-mobile candidates, who are also their future clients.

3. Banks at war: cyber security

 With greater technology and the on-going accumulation of customer and transaction data comes the need to protect this precious business asset. Last year, a string of internet heists on bank accounts and attacks linked to Dridex malware prompted a worldwide investigation involving the FBI in the US and Europol in Europe.

The Bank of England has warned about the increasing risk of cyber attacks on financial firms and even launched fake attacks on its own employees to raise awareness. Meanwhile in the US, more than 80 financial firms and government agencies practiced their cyber-attack defences by taking part in the Quantum Dawn exercise organised by the Securities Industry and Financial Markets Association (SIFMA), the third of its kind.

In addition to elevated demand for IT security professionals, I expect, this will also lead to further training and awareness programmes for existing employees. Candidates should familiarise themselves with the concept of data security and at-risk behaviour, as no complacency will be allowed in this field.

4. Understanding the benefits of greater diversity

If there is one thing the Millennial workforce and customer base deeply cares about it is diversity. I hear it all the time from employers in the sector: “We want a more diverse workforce”. In its Global Banking Outlook for 2016, EY points out that although firms in the financial sector have changed many aspects of their core business, structures and processes through technological innovation, their employee demographic remains almost the same.

“A stronger, better banking world will be made up of a collection of the best individuals from diverse backgrounds. Diversity in the workforce is the best way to produce the highest-performing teams, so it is not just the right thing to do, but also commercially shrewd,” the firm says in the report.

Nearly all major financial players have diversity and inclusion programmes in place. In fact, some financial organisations have taken diversity a step further and HSBC, Barclays and Bank of America have made it a strategic part of their development plans. Candidates from different backgrounds will clearly benefit.

 In part 2 we will look at how a raft of new and stringent financial markets regulations will impact the sector in 2016.

I hope you found the above information interesting and useful  – please see below for links to other financial markets blogs which may be of interest to you and your teams:

• Digital destruction: Could Fintech kill banking jobs?
• The basics of business partner functions
• Business partners should be seen, and heard
• Intrapreneurship and labs: How banks are fostering innovation
• China stock market jitters: Keep calm and carry on
• Marty McFly, Twitter & better Investor Relations
• How banks are changing old ways to attract Millennials

Author

Geoff Fawcett

Director, Hays UK

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Geoff Fawcett has been in the recruitment industry for over 16 years. He is currently responsible for Hays Financial Markets, which provides an integrated recruitment solution to London based Banking & Financial Services organisations. Specialist divisions include Finance, Operations, HR, Marketing, Purchasing, Secretarial, Risk & Compliance, Front Office, Finance Technology and Executive with in excess of 100 consultants.