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Big Data And Tech M&A Boom Push Up MBA Jobs In Financial Services

Investment banks are increasing their investment in technology staff, while tech and data spurs a boom in global dealmaking activity.

Fri Apr 3 2015

MBA jobs in the UK financial services industry are being buoyed by investment in digital technologies like big data, while a boom in mergers and acquisitions has seen big banks snap up more dealmakers globally.

Figures from employers’ organization the CBI and PwC, the professional services firm, show sentiment in the financial services sector is higher than at any time in the past 15 months.

A report by Astbury Marsden, the London recruitment firm, said headcount in the City was rising on the back of the “digital agenda”, with the number of new jobs created in March jumping by 25%.

Investment banks are increasing their investment in technology staff, as well as making replacement hires for technology staff that have been lured away to join smaller financial technology – or “fintech” – companies.

Investment in fintech groups rose from $264 million in 2013 to $623 million last year, according to Accenture, the management consultancy firm.

Adam Jackson, managing director of Astbury Marsden, said: “Banks are stepping up their hiring of technology staff as they either look to replace staff poached by fintech businesses or battle to keep and support their best technology talent.”

He added that investment banks are fighting a “war for talent” with fintech companies and face losing market share if they don’t invest in IT.

Investment to tackle cyber security in particular is rising, with almost 38% of financial services firms planning to boost spending to combat cybercrime over the next 12 months, according PwC and the CBI.

Dr Konstantina Kappou, program director for the MSc Financial Risk Management at Henley Business School, said that the “electronic world has taken over”, opening up new career opportunity.

She said: “Studies that combine risk knowledge with computer science and complex technology can offer a promising career in cybercrime detection and investigation.”

Not only are banks recruiting MBAs in this area but also consultancy firms and the public sector, according to Jennifer Windus, senior career consultant for finance at George Washington University Business School. “We are seeing increased demand for risk managers,” she added.

Data analytics is another area of financial services investment, according to Astbury Marsden.

Christopher Adeyeri, associate director for technology at the firm, said: “Big data analytics teams have now become an established stand-alone functional department.”

He said that financial firms are now hiring big data and analytics specialists. “Turning data into knowledge to drive innovation and harness untapped business potential requires big data specialists with the right skills-set.”

The Stevens Institute of Technology, a private US research university, recently launched a master’s program with Accenture to address a skills shortage this area.

Christopher added that analytics teams provide senior-level executives with key insights on how they can improve profitability.

Asset management companies in particular have recognized how big data can improve portfolio management and ultimately boost profitability, driven by regulatory compliance and risk analysis. Many asset managers are also mining social media for trading insights.

Marie Kratz, director of the Risk Research Centre at ESSEC Business School, said: “With the increase of regulatory requirements, companies have had to strengthen their risk teams and departments.”

A boom in M&A, with deals struck so far this year at the fastest pace since 2007, has also ramped up demand among banks to recruit potential dealmakers at business schools.

Tony Somers, director of the Career Management Center at HEC Paris, a top business school in France, said there has been a “significant increase in M&A hiring” for junior dealmakers.

Technology IPOs remain a key market driver for M&A, while market opportunities in mobile, cloud, data and security are poised to push up dealmaking in the tech industry, according to a report this week from KPMG.

Chad Seiler, KPMG’s technology deal advisory practice leader, said: “These factors, combined with large cash reserves, are fuelling M&A activity.”

But while the PwC/CBI survey of the financial industry found 23% of City firms increased their headcount, 46% said employment had fallen in the three months to March.

Investment banks including Barclays and Royal Bank of Scotland have recently announced plans to slash jobs.

There are areas of growth at banks, but cuts have come from the FICC – fixed income, currencies and commodities – sectors, according to Coalition, the research firm.

Based on the PwC/CBI figures, employment in the financial and insurance sectors is forecast to dip by a further 6,000 in the next two quarters, to stand at around 1.1 million by the end of June 2015.

Rain Newton-Smith, CBI director of economics, said that falling headcount was driven by banks cutting staff as they make their business operations leaner by refocusing activities – a result of new capital rules and regulatory requirements.

But Kevin Burrowes, UK financial services leader at PwC, said that UK banks are reporting growing confidence, steep revenue growth and increasing profitability.

He added: “Banks’ spending priorities for the next year are focused on improving IT infrastructure and cyber security… Banks are also building new digital platforms to remain competitive and respond to changing customer needs.”