Fiona Makres, a manager at global recruitment consultancy Robert Walters, speaks to DerivSource about the roles in high demand within derivatives operations and shares insight into emerging job trends for operational professionals working in the investment banking market in London.
Q. What are the key areas in derivatives operations that are seeing the greatest rate of hiring at the moment? What roles are in high demand?
A. The key areas of demand include OTC client clearing (for both BAU and project-focused roles at all levels) and for business analysts and project managers within operations and AVP and VP level roles within operational risk and control. Additionally, financial and physical commodities professionals across both middle and back office and individuals working in regulatory reporting positions at all levels are in great demand too from investment banks within London.
Q. What are the drivers behind these new trends and particularly around the increased demand for key areas within OTC derivatives?
A. The three main drivers are regulatory, cost efficiency and risk and control. The shape of operations onshore in London has changed considerably over the past two years because of cost control initiatives, such as offshoring and near shoring, as well as, the increasing regulatory requirements that we are seeing in the market.
Prior to 2009, the main areas of demand were across settlements, documentation and confirmations. Post-2010, this has changed. Aside from most middle office roles now requiring experience with end of day flash P&L, demand has increased significantly for derivative project managers, business analysts, and professionals working in operational risk and control. These trends are all related to OTC derivatives markets, particularly those in structured derivative products.
Q. With regards to OTC clearing roles specifically, how banks managing the recruitment of operational staff for this area?
A. OTC clearing is a growing area within derivatives operations. Due to uncertainty surrounding regulatory requirements, banks are unsure of how or when to source professionals for these new divisions to support wider business activities. For instance, banks have to decide whether to recruit operations professionals for OTC clearing now or wait until the regulation comes into effect.
Despite this, we are definitely seeing strong demand for OTC client clearing candidates because of the importance firms are placing on this new regulation. Because OTC clearing is a fairly new area, the supply of suitably-qualified professionals for these roles is short. Employers therefore have to be very competitive on salary to secure the best talent available.
Q. Are banks changing the way that they hire for these specific roles?
A. Banks are looking to recruit professionals on a ‘like-for–like’ basis but this isn’t always possible. If they’re not able to hire OTC derivatives experts, they are prepared to consider people who have a really strong knowledge in other derivate products. We have definitely seen growth in this space and we’re anticipating that this demand will continue.
Q. How do you foresee the job market for derivatives operational roles evolving in the next six months to a year?
A. The most popular asset classes for recruiting operational professionals currently is fixed income derivatives, commodities and structured FX. We expect these trends to continue throughout the rest of the year. By contrast, demand for equities has really slowed in comparison to previous years.
We are also seeing an increase in the number of middle office trade support roles involving projects and end of day flash P&L. Also, the market is moving on from the vanilla derivative products and we have seen increased demand across structured derivatives, margining, and drafting. In fact, structured derivatives drafting vacancies are on the rise in London despite relatively little demand in this area over the last year.
Most of these middle office roles really require strong derivatives knowledge, particularly the more complex products. And with the regulatory changes, there will be growth in demand going forward.
Among job seekers, there has been a significant increase in the volume of senior level professionals seeking new roles in the market in change management, regulatory reporting and operational risk and control. Those professionals looking for a change are motivated by long-term career ambitions and are typically pursuing new roles to broaden their skill set.
