Basel III is just around the corner, with most Australian financial services firms currently assessing its impact on their business. Now is a great time to consider the career opportunities this may offer, not just for risk professionals, but within the broader financial community.

What can we expect?

Basel III is an extension of existing regulations laid out by the Basel Committee on Bank Supervision which seek to control capital adequacy and quality. The primary aim of the committee’s three sets of recommendations is to maintain liquidity in global institutions, using a range of metrics and other measurements. Basel III represents a further tightening of earlier committee recommendations, and is at least partly influenced by the recent global liquidity crisis.

Learning from the past

The general consensus from people I speak to is that Australian financial institutions are already well positioned to incorporate the Basel III changes into their existing risk management frameworks. All lenders in Australia already have functioning and robust stress-testing and provisioning teams, along with sophisticated liquidity and capital reporting teams.

Our regulators have gone to great lengths to ensure that domestic institutions can remain liquid under the most severe conditions. The proof that existing regulations are working was the performance of Australian banks during the recent GFC, and the speed with which they returned to lending as the market recovered. In the future, we can expect more tinkering around the edges of existing liquidity measures and more scrutiny over exactly what constitutes a liquid asset.

What does this mean for recruitment and careers?

Despite the natural assumption that Basel III will create more work for policy nerds and head-office boffins, the truth may actually be wider reaching. I see genuine career opportunities falling into several main categories:

· Technology project managers, business analyst and testers

· Business-side project managers

· Pricing and product managers

· Reporting and analysis teams

One Australian bank is already commencing a replacement of its existing liquidity reporting system in anticipation of the Basel III changes, leading to opportunities for credit-savvy technology professionals to implement the latest IT. The flow on from this, just within this bank, is also likely to lead to a beefed-up reporting requirement and a host of opportunities within the business for people who can break down complex ideas into meaningful English.

Meanwhile, Australian regulators will continue to scrutinise the new regimes at the banks, now that they are finally satisfied with existing Basel II models. This will lead to increased reporting requirements and an increased capital adequacy focus, creating positions for people who are familiar with working with the regulators.

Another set of opportunities, in my opinion, is also being created for those who can outsmart the regulators. A lot of money is at stake, with idle capital being tied up in genuinely liquid assets, so it’s almost a given that as soon as the regulators are satisfied with how capital is being attributed, they will commence the process of working out ways to free up that capital, according to the new rules. If you have that level of insight, your career could really take off in the next 12 to 24 months!

The future

Overall, Basel III is likely to be a speed bump, rather than an ongoing imposition for our banks. It does, however, raise bigger questions about how much regulation is necessary in this country, given that Australian banks fared better than those in almost every other country.

If your skills lie in any of the areas mentioned above, you may already understand the implications for your business, but if not, now is a great time to speak to your manager or to position yourself to prove your capability during this exciting time.

Toby Aikins, client advisor, Marshall McAdam, is a career recruiter, with an extensive background in risk within the financial services and sectors. He specialises in operational risk, compliance, credit risk strategy and analytics, market risk, security, assurance, project-based risk (including Basel III, AML / CTF), and portfolio and capital risk.