As junior bankers find themselves at the centre of a love-in on working hours, the established hierarchy of stressful jobs in banking finance is being turned on its head. Working as an analyst or associate in M&A isn’t so bad in the new world of free Saturdays and attenuated pitchbooks. So, which are the most stressful banking jobs of the moment?
1. MiFID Consulting
MiFID consultants are hot. So said Financial News last month. Banks are busy hiring MiFID II “market structure gurus” to prepare for the introduction of the new regulations in January 2018, said Marcus Newman of headhunting firm Sheffield Haworth.
MiFID consultants themselves are feeling the heat. With 15 months until the introduction of the regulations and with most firms saying they were unprepared earlier this year, the pressure is on. Moreover, the pressure is on at a time when banks are under pressure to do more with less. “This is a massive project and there are so many different facets that banks need to make huge investments,” says one MiFID II expert, speaking on condition of anonymity. With costs being cut and headcount constrained, he says MiFID II specialists are under huge pressure and it’s difficult to get things done.
The upside is that as the deadline approaches, banks are starting to panic and to increase pay: “Market rumour says rates will increase from £600 to £1,200 a day.”
2. Anything in sales
Wherever you work in finance now, you probably don’t want to work in sales.
Sales jobs in investment banks have changed. As banks reduce risk and focus resources on a handful of key clients whilst serving the rest electronically, salespeople have less freedom to do what they want. Nowadays, sales jobs are all about customer relationship management systems and calculations of the risk weighted asset (RWA) impact of particular deals. Experienced salespeople are struggling to adjust.
“The client service mantra is kinda gone right now,” says one senior salesperson. “It’s very frustrating.” To make matters worse, he says his team has been rendered subordinate to traders who now think they call the shots. “That’s funny given they can’t take risk like they used to and computers are doing all the risk-taking,” he says.
Basically, salespeople are a bit bitter.
3. Model validation
Model validation is also big business. Everyone who’s anyone is hiring model validators, whether in London or in Poland. And like MiFID consultants, model validators are up against it: the Basel Committee has promised to finalize restrictions on models used to measure credit risk weighted assets by the end of this year. Banks are pushing back on the recommendations whilst trying to put their houses in order.
Model validators need to move fast, and to be accurate. Bank of America was compelled to spend $100m resubmitting its stress test last year after the Federal Reserve raised raised concerns about the level of detail in the risk models the bank was using.
4. Technology contracting
Technology contractors are among banks most unloved and overworked employees. Under Strategy 2020 John Cryan is cutting Deutsche’s spending on technology contractors and converting some to full-time staff. HSBC, Citigroup, Barclays, Credit Suisse, and Morgan Stanley have all cut contractor rates by at least 5% this year, and one contractor at Barclays says he’s had his pay cut eight times. The cuts in contractors’ rates come as most banks seek to update and standardize IT systems. Told to accept reduce rates ans sign contracts only lasting three months (with the threat of further cuts to come), contractors are left feeling over-worked and unloved as a result. Many are said to be leaving the industry.
Lastly, just just because pitchbooks are shorter than they used to be and junior bankers now get Saturdays off, don’t assume that IBD is suddenly a stress-free place to work. Figures from Dealogic reveal that cancelled M&A deals and IPOs are down substantially year-on-year in EMEA in the third quarter. However, there’s still the disruption of a possible Trump election victory to contend with, and banks in Europe are in pressure to compensate for a year-to-date 20% drop in investment banking fees in America.
One associate says buy-side M&A (where you’re on a team representing a buyer) is the most stressful: “You never know if you’re backing the highest bidder, so all your effort could be for nothing.”