Leaner and meaner
Year of upheaval ends with tentative signs of recovery for the banking industry, with strong demand for risk and compliance experts
Affected by uncertainty in the global economy – amid a widening regulatory environment coupled with rising operational costs – it has been a mixed year for Hong Kong’s banking and finance sector.
While the city’s new anti-money laundering (AML) ordinance, which came into effect last April, has heightened the need for more risk and compliance talent, in other areas – as banks continue to offshore operations to more cost-effective locations – demand for talent such as those for administrative roles is in decline.
As the Year of the Snake makes way for the Year of the Horse, Mark Enticott, managing director with Ambition Hong Kong, says positive data signs in the mainland economy, the Hang Seng Index topping the 23,000 mark and signs of a pick-up in US corporate earnings contribute to job stability.
“Except for risk and compliance roles, where demand is ‘hot’, we are not seeing huge hiring action, but we are seeing signs of stability,” he says, adding that the AML field is a big recruitment area.
On the flip side, as banks move certain jobs offshore due to cost-saving measures, Enticott says recruitment volumes are notably lower in areas such as product control, settlements and administrative functions. Another trend he notes is a rise in contract roles, allowing banks to fulfil short-term workloads without needing to commit to full-time hiring.
In contrast, Enticott says mainland banks expanding their operations in Hong Kong are in active hiring mode, albeit mainly focusing on experienced Chinese-speaking candidates with comprehensive knowledge of the mainland and regional markets.
Looking to next year, Enticott believes job stability will continue, especially at senior level. “In the lead-up to Lunar New Year, we expect senior candidates to be less open to considering new opportunities,” he says.
Meanwhile, employees involved in tax, marketing and finance roles – especially those not offered career progression or pay increments – may be tempted to seek new opportunities. “Hedge funds, private equity firms and the wider financial services sector are always seeking talented people,” Enticott says.
As ratings agencies expand corporate ratings teams due to the higher number of originated debt capital markets transactions and bond issuances in Asia-Pacific, Chris Aukland, Michael Page Hong Kong and Southern China regional director, expects healthy hiring demand to continue.
“We envisage a continuous demand for ratings analyst candidates in 2014 and a shift of mindset of investment banking candidates to move to fixed income and credit analyst roles,” he says, stressing candidates should have credit research and ratings advisory backgrounds, with fluent-to-native-level Putonghua.
Aukland says private banking, insurance companies and mainland banks were the “winners” in 2013. “With Asia-Pacific positioned as the world’s fastest-growing wealth management market, we can expect robust growth and hiring to continue.”
As the banking and finance sector continue to focus on cost controls and strategic hiring, Aukland says depending on company performance and the particular skill set of the individual, for an external move the average percentage salary rise for most financial services professionals will range from 12 to 20 per cent. “While bonuses are likely to be offered to top performers over the next 12 months, bonus levels will vary and depend on the job type, the performance of the individual and organisational performance,” says Aukland.
Kay Giesecke, associate professor of management science and engineering at Stanford University, who teaches the Stanford quantitative finance programme in Hong Kong, says dependence on big data and use of technology create demand for quantitative analysts, or quants. “From banking, insurance and asset management to financial business consultants and portfolio managers, quantitative analysts provide a solid foundation to expand financial knowledge.”
Looking at future trends, Marc Burrage, regional director of Hays in Hong Kong, says global banking is picking up momentum as the environment moves into a better shape, suggesting that international corporate banks will step up hiring, predominantly at senior level. He adds that a number of new mainland bank entrants starting up in Hong Kong will also continue to actively hire.
Additionally, Burrage believes that with the continuing growth of Southeast Asian economies, both commercial and investment banking will keep expanding across the region, particularly as investment flows inwards.
He notes that with many of the major commercial and investment banking organisations under-represented in the region, they are likely to focus on hiring efforts to gain market share. “As trade increases, global transaction services (GTS) will become another major growth area with commensurate hiring,” Burrage adds.
TIME TO SADDLE UP
Anti-money laundering professionals, China and Asia experts, contract roles, global transactions, insurance, private banking, quantitative, ratings and credit analysts, risk and compliance
Admin, product control, settlements and other roles that can be outsourced