Morning Coffee: The front-office banking jobs that will and won't see you through to 2028. The lucky gamblin’ Goldmanite

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banking jobs, jobs, hiring, careers, recruitment, recruiting, front office, back office, middle office, Wall Street, technologists, engineers, AI, machine learning, automation, Oliver Wyman, Morgan Stanley, Goldman Sachs, David Solomon, DJ D-Sol

Do you want a finance job that will be good until 2022, or are you looking for something a little more durable?

If you want to do any old job in finance and make a long career out of it, then you should work in technology in the back office, where jobs are already plentiful and will become more so. On the other hand, some front-office jobs at wholesale banks and asset managers are predicted to shrink and are therefore a risky bet, despite considerable upside, and other front-office jobs are going to expand, although there’s downside.

In addition, the lines between front-, middle- and back-office will become increasingly blurred as technology evolves and becomes omnipresent.

The recent Morgan Stanley and Oliver Wyman compensation spending study found that technologists are going to be in demand, with engineering, tech, quant and analytics staff making up a bigger chunk of bank front-office operations, and IT making up a huge portion of the back office.

The report estimates that up to 40% of the asset management workforce “will require fundamental re-training,” intensifying cost pressures on asset managers, which will in turn translate into added cost pressures for the wholesale banks that serve them – with significant repercussions for those employed in the finance industry, according to Business Insider.

The MS/OW report found: “As banks adopt new technologies and build new businesses, the talent model will need to shift profoundly. In the front office, demand for quants will increase significantly, while technology experts such as user experience (UX) specialists will need to be aligned with business teams to enable agile proposition development. We estimate these two roles will grow to represent 25% of compensation from <5% today.

Charts

“In the back office, IT will make up ~60% of future compensation, driven by higher salaries for more specialized, in-demand technology skill-sets such as user interface (UI) developers.”

The report suggests asset managers could cut costs by 30% thanks to automation and outsourcing, according to BI. It said:

“We expect headcount to reduce due to automation and externalization of the skill-set…. compensation structures will shift. Investment management will continue to demand the lion's share of compensation spend. Technology and Data Management’s share of compensation will grow fourfold whereas relative spend on automated back-office functions will decrease. The share of Distribution will remain largely flat but we expect this role to shift most fundamentally as data and technology will be increasingly important at the interface to customers.”

One of the biggest challenges is attracting skilled technologists to finance, with the report saying “wholesale banks will need to evolve their talent models to compete.”

Separately, Goldman Sachs President David Solomon – a.k.a. DJ D-Sol – has a talent for spinning electronic dance music, and he also has had luck as a gamblin’ man. Just like Kenny Rogers at the card table, he knows when to hold ’em and knows when to fold ’em.

Las Vegas tycoon Sheldon Adelson made an offer to Solomon in the spring of 2014 to run his casino empire, according to the Wall Street Journal.

Solomon had been Adelson’s banker since the 1990s. He had honed his craps game and poker skills on weekend getaways to Atlantic City, N.J. He was 52 years old and seen as a long shot to become the chief executive of Goldman.

However, Solomon turned down the casino job, and that patience paid off this week when current CEO Lloyd Blankfein picked him over Harry Schwartz to become the heir apparent to Goldman’s throne.

Solomon is all in. He either bluffs well or was holding a straight flush all along. He’ll lay his cards on the table whenever Blankfein steps down, possibly as soon as the end of this year.

Meanwhile:

How does a large bank like Goldman hold on to its people who want to swap their suit jacket for a Silicon Valley hoodie? It launches an incubator. (Business Insider)

Goldman sees a reshaping of industries, which it believes will drive M&A deal activity. (Reuters)

House Financial Services Chairman Jeb Hensarling says the House won’t rubber-stamp the Senate bill that would roll back banking rules. (Bloomberg)

Equity research revenues are down almost across the board – and some firms are facing declines of as much as -60%. (Business Insider)

At the three-century-old private bank Coutts & Co., where Queen Elizabeth II keeps money, female colleagues accused star banker Harry Keogh of physical and verbal harassment. (WSJ)

HSBC has a 59% gender pay gap, the biggest among British banks. (Reuters)

Women are less likely than men to have careers aligned to their field of study and are more likely to believe that their work makes the world a better place. (Bloomberg)

From hedge funds to venture capital, these are the rising stars of marijuana’s investment scene that everyone from Wall Street to Silicon Valley should know. (Business Insider)

Singapore is the world’s most expensive city for the fifth straight year, with Paris and Zurich tied for second place. (Bloomberg)

Connecticut is the new center for America’s power couples, followed by New York, New Jersey and California. (Bloomberg)

Have a confidential story, tip or comment you’d like to share? Contact: dbutcher@efinancialcareers.com

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Photo credit: PongsakornJun/GettyImages

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