Global Banking & Markets and Asset Management

While there have been a range of factors which have impacted performance within the Financial Services (FS) sector, the rules contained in the CRD IV (Capital Requirement Directive) which became applicable in January 2014 have put restraints on a number of things including remuneration and hiring.

Bonus caps have been limited to a 1:1 ratio, only increasing to 2:1 with a shareholder vote. Under CRD4 the number of directorships individuals can hold has been reduced and this has led to candidates considering the scope of their undertakings. “As a result they are thinking more strategically about what they can and cannot do and what they want to do. This does mean some candidates are having to say no to opportunities, or step-off Boards, because they can no longer hold six or seven positions,” says Giles Allen, Partner at JCA Group.

Regulation has also had a knock-on effect upon the infrastructure of FS firms. It has created much larger workloads and a need for individuals within the control functions to possess a number of different skills. Interestingly this has also altered the balance between front office and back office remuneration – as the former falls, the latter is rising.

In the primary and secondary markets it is not just remuneration that has fallen, headcount is also remaining low in the big Tier One banks. These banks are even reducing the areas in which they operate – refining their offering as opposed to doing everything. Meanwhile the asset management space is starting to grow.

Another area that is rapidly taking the spotlight within the FS sector is Financial Technology (FinTech). Firms are using technology to completely re-shape their products, services and structures, especially within Retail FS. A consumer-focus is now a common strategy adopted by all banks, with challenger banks having the advantage of a ‘clean’ brand.

However, hiring is becoming increasingly difficult in the Retail space as organisations look for skills that don’t exist within the FS sector and are limited by regulation when bringing talent in from outside of the sector.

But is the FS sector still able to attract the best talent with so many fundamental changes occurring? According to Allen, “some people are being more selective, particularly with regards to the ever increasing risk, scrutiny and time commitments versus reward.

Allen says: “As a result of the increased demand for FS Board members, it could be said that the pool of available talent is narrowing, but we still find a good range of individuals who have the expertise. Search firms just need to work harder to find them and they need to keep abreast of candidates and all of the changes within the sector on a very regular basis.”

“But on the other hand, for a number of people whose careers have spanned solely the fs sector, they do find it harder to join other Boards. They have a lot of relevant experience coupled with great credentials and are interested in joining FS Boards.”

Global Banking & Markets Board-level industry consultant listings

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JD Haspel

James Haspel

Korn Ferry

Jonathan Baines

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MWM Consulting

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Mark Woodhouse

Odgers Berndtson

Simon Hayes

Anne Murphy

Russell Reynolds Associates

Dee Symons

Sheffield Haworth

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Stonehave Associates

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