If you have been around the investment banking industry for as long as I have (I started in the back office of a small IB in 1993), you will have undoubtedly witnessed an amazing transformation (and reduction) of functions within the back office.
Over the years technology has eliminated quite a few roles – while creating others – and we can expect this trend to continue. Most production-based back-office positions have already been replaced by technology or are being moved offshore to low-cost locations. Additional factors that are shaping banking jobs in the back office include the dramatic increase of more stringent risk and compliance regulations, and the strong focus on improved productivity and cost-reduction initiatives due to challenging operating conditions for investment banks.
All of these factors are combining to transform traditional, large back-office teams into smaller, more highly skilled trade-support groups in major banking centres like Singapore (where I’m based). This means that in 10 years time, there will essentially be fewer generalist back-office support positions and more dedicated trade-support jobs.
One big question looms: how do you remain employable as a trade-support professional over the next 10 years? Here is a list of the banking skills for trade support professionals that I think will be must-haves by 2024, if not before:
The days of the product specialist will be long gone by 2024; it will be no longer feasible to have duplicated trade-support functions for several separate products. Trade-support professionals will cover a range of traded products (debt, equity and derivatives) and will be expected to understand the end-to-end trade lifecycle of every single one of them.
As risk and compliance functions continue to evolve at a rapid rate, it’s reasonable to expect that some of the current responsibilities of dedicated compliance teams may in fact become part of the trade-support remit by 2024. For example, the new-product-approval function is continuing to gain traction and become separated from the group compliance function – it could well end up as part of trade support. The same could be said of know-your-customer (KYC) work, which was once part of the data-management group and is now a dedicated compliance function of the back and middle office. This kind of evolution will continue as banks struggle to keep up with the demands of regulators, while at the same time look at ways of ensuring their compliance and trade-support teams are becoming more efficient and productive.
From the late 1990s to mid 2000s many global banks experimented with back-office shift work in Singapore due to the cost-saving opportunity of basing back-office staff in Singapore instead of the UK or US. This shift-work model met with limited success and most banks gave up, relocating roles back home. By 2024, however, the case to reintroduce the model will again be strong – at least in the core function of trade support. From a productivity perspective, it makes sense to run smaller, more specialised teams working in shifts in three of four key banking centres rather than in a dozen cities all over the world.
Technology upgrades are only going to increase as banks focus on productivity and risk management. Experience of performing user acceptance testing (UAT) will stand you in very good stead with your employer by 2024 and will give you the opportunity to have a say in the functionality of the system that you and your team will be using.
Banks will continue to look for locations that offer advantages over the major banking centres due to costs and productivity. From 2005 to 2014, location strategies have included creating back-office and trade-support hubs in locations including Singapore, the Philippines, Poland, India, China and Malaysia. As roles have moved on, only a limited number of candidates have been prepared to move with them. In the future, you can expect opportunities for trade-support professionals to be limited to the hot locations. To stay employed long term, you will need to be willing to relocate to a country that may not be at the top of your list of preferred locations. While expat packages will not be on offer, you will have the opportunity to prove your value to your employer and gain valuable exposure to new markets.
By 2024, you will need to be able to communicate in a number of languages fluently as you can expect to be covering multiple time zones. Moreover, you’ll need to liaise and build relationships with high-value clients. After the global financial crisis we effectively saw the elimination of the back-office client-service function, with these responsibilities in many cases falling back into the hands of the front-office relationship managers. This is again changing as the trade-support team is expected to not only solve complex client issues but also build strong working relationships with clients and interact with them at a very high level.
Possessing a CPA or CA qualification will work in your favour as a trade-support professional in 2024. The skills of a qualified accountant (e.g. risk, compliance, audit, project-management and, of course, accounting skills) are becoming more and more relevant for trade-support teams as they seek people who can speak the same language as the risk, compliance, audit and finance teams.
Craig Brewer is a director at recruitment firm FiveTen Group in Singapore.