The global financial services sector is showing signs of a return to more active recruitment. But the type of jobs on offer after the global financial crisis have shifted to a focus on regulation.
In a sector chastened by increasing regulatory scrutiny and scandal, from Libor rate rigging to the more recent $6 billion-plus settlements on foreign exchange, prospects are strongest in regulation and risk management, among other finance functions.
“Banks seek graduate students for compliance and risk management,” agrees Gil Yancey, executive director at the GWU School of Business' Career Centre in the US.
In Europe, the Basel III regime for banks has driven up career prospects in compliance, while in the US the Dodd-Frank rules were expected to create thousands of new jobs. Pascal Michels, associate director of career services at IESE Business School in Spain, says: “There is a real appetite in these areas at the experienced hire level.”
With more onerous regulation of the financial sector, there is increasing job opportunity in risk management. This is illustrated best by the growing number of companies employing chief risk officers who sit on the board, according to a Deloitte survey of finance institutions.
“With the introduction of further risk metrics and oversight, there has been a great demand for risk professionals over the last few years,” says Dr Konstantina Kappou, MSc Financial Risk Management director at Henley Business School in the UK.
Marie Kratz, director of the CREAR Risk Research Centre at France’s ESSEC Business School, says there is not only job opportunity in risk management at banks, but also with regulatory authorities. “Recruitment is strong but will certainly become even stronger,” she says, as regulation increases.
Authorities regulating financial markets have also generated new jobs at insurance companies and auditors. The so called Big Four auditing firms — Deloitte, KPMG, PwC and EY — offer consultancy roles in this area.
Smaller consultancy firms are hiring too, says Paul Schoonenberg, head of MBA careers at the UK’s Aston Business School. “I would see this as a continued area of growth,” he says.
Investment banking jobs have dried up somewhat, with banks such as Barclays and Royal Bank of Scotland culling staff numbers significantly. But there have been signs of recruitment activity picking up lately. A buoyant period of M&A activity is fuelling the trend.
Christelle Cuenin, assistant director of corporate partnership development at the business school INSEAD, adds that there has been an increase in investment banking jobs in Europe through summer associate programs.
“We have also observed more opportunities available to MBAs with previous experience in investment banking,” she says.
In its most recent jobs report, Astbury Marsden, a leading City of London recruitment firm, said one noticeable change is that trading has picked up for banks’ fixed income, commodities and currencies (FICC) desks.
An expectation of continued strong levels of M&A and IPO activity has also spurred City job creation. The value of M&A activity globally was at the highest levels since 2007 this year, as companies took advantage of low interest rates and cash piles amassed since the crisis.
“The increased positivity on the trading floor is creating more opportunities for specialists in these areas than we have seen for some time,” says Adam Jackson, managing director at Astbury Marsden.
“Meanwhile, M&A teams are also expanding.” However, this is more at the entry level, according to Tony Somers, director of the Career Management Center at HEC Paris, the French business school.
Wealth management has been another area of jobs growth, led by Asia. Melanie Alciati, assistant director for careers at INSEAD in Singapore, says there is high demand for wealth managers in Hong Kong in particular.
Potential wealth management pay is increasingly attractive to MBAs. “Salaries in the wealth management sector are higher,” says Elisa Zagami, head of career development at Italy’s MIP Politecnico di Milano, than other areas of the finance industry.
The potential windfalls earned in private equity and hedge funds have also tempted business graduates away from banking.
Paula Quinton-Jones, director of career services at Hult International Business School in London, says investment banks can be powerful hunting grounds for private equity recruiters.
“Without a background in M&A or leveraged finance candidates may find it difficult to break into PE,” she says.
But private equity recruitment is on a much smaller scale than banking, notes Sotirios Paroutis, assistant dean at Warwick Business School in the UK.
“Recruitment tends to be done through networks and alumni — and very much below the radar,” he says.
Meanwhile, as banks have sought to invest in their ageing IT systems, there is a growing demand for technology specialists.
“Strengthening cyber security teams remains an important focus, especially as more data exchange with customers is conducted via the cloud,” says Astbury Marsden’s Adam.
Finance is one sector that has been ahead of the so called big data curve. “I have seen both the insurance and financial services areas make the early moves,” says Michael Goul, chair of the Department of Information Systems at W. P. Carey School of Business.
One worrying trend for MBAs hoping to work on Wall Street, however, is the number of bulge bracket US banks that have sought to employ undergraduates for entry-level analyst positions.
Sue Kline, senior director of the Career Development Office at MIT Sloan, says: “The trend for hiring undergraduates for roles such as sales and trading started during the first downturn in the market, and has continued.”