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Financial Services Technology Update

The Chief Change Officer

The Leader of Change, the new Chief Change Officer is responsible for all organisational change

initiatives, tools and methodologies within an organisation. These include Six Sigma, Balanced Scorecard, Lean Enterprise, supply-chain management, benchmarking and business systems process modelling, to name but a few. Throughout last year we have seen businesses continuously seeking talents with track records of implementing and managing change programmes. Today the rate of change has never been more rapid or more constant. Whether the change is a small one, like the implementation of a new system, or a much bigger one such as a company divestment or merger, the way that change is managed makes all the difference to its success or failure.

Users rarely welcome change. Hence together with the hard technical skills mentioned above, the most important skills a Change Professional must possess is the ability to affect positive transformation which does not threaten the status quo. They must ensure that doing things differently also means doing them better in the long run, and that they bring a collaborative and sensitive approach to the project.

“When you are finished changing, you’re finished.” - Benjamin Franklin

Key functions the CCO are looking for:

Build the Target Operating Model – The Strategist and Business Process Solutions Specialist

This high level professional takes on a real challenge to decide and describe the desired state of the operations of a business. Typically a TOM also includes the roadmap over time that specifies what the company needs to do to move from the “as is” to the “to be”. Deep and broad business experience coupled with a structured approach to define work streams is a rare mix, hence 2015 has been a good market for this skillset.

Communicate the Rationale Behind the Need for Change – The Programme Relationship Manager

To introduce any change, large or small, top down or bottom up, employees must know why it is important for the change to occur and the intended benefits. This highly skilled function will handle this carefully and communicate to all affected parties, often in global locations. There should also be adequate opportunities for people to voice their concerns and contribute their thoughts, views and opinions. The Relationship Manager juggles feedback and politics, scopes boundaries, and will eventually convince employees of the need for change.

All Change in Financial Services

If there was one thing we were sure to have happened

this year in Financial Services, it was Change.

Numerous initiatives, both proactive and reactive, new and inflight have gone into

production with varying results and satisfaction.

At this stage, technology can no longer be viewed as something that simply

supports the business. Throughout 2015, senior Technology Executives worked with Business

Leaders to drive the changes required to keep up with

an increasingly competitive landscape. Leading change

involves juggling technology shifts and new business models, framed by cost control – what fits, what doesn’t, what suits the

business best.

A Review of 2015

Jan 2016

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Implement the Change in Phases – The Planner and Deliverer

Change is usually best received when it is implemented in bite sized chunks. Most change can be broken down into phases that can be reviewed along the way.

Collaboration is key, so if circumstances allow, having a pilot group of employees to test the change before it is fully embedded is a good way to ensure that more people ‘buy in’ to what is happening and why. The end result must be delivery, be it a new set of processes or toolsets, or a suite of applications, it must be a product which will satisfy the users’ needs.

Evaluate, Review and Report on Change - The Project Manager

Careful monitoring of the entire change process is essential in order to be able to measure its impact and evaluate its success and if fine-tuning is required. People need to be kept informed about how things are progressing, the results that are occurring and whether the change programme is on track and has met its objectives.

Reactive Proactive Change Drivers – The Regulators

Over the past three years, meeting regulatory deadlines, dealing with compliance pressure, reducing financial penalties and maintaining monetary stability have remained the top priorities for Banking Executives.

As the initiatives enter implementation and maturity, cycles repeat themselves and we are seeing businesses taking a more proactive approach to dealing with these issues. In 2015, they faced looming and then extended deadlines for MiFID2, milking the now talent rich

market. BCBS239 / FDSF / FRTB are being shoehorned into implementation amongst EMIR, Pillar 2 and CCR in reshaped banking groups.

Over the last 12 months Client On-boarding, AML, KYC & CDD, Financial Crime, Advisory, Control Room and Data Protection all affected large scaled reviews and remedial action. This created demand for contractors in lower level support functions, and more project level strategic hires at mid to senior levels.

Rethinking Technology – All New Integrated Experience from the Innovation Director

In 2015, we were pleased to see banks making new investments in advanced digital technologies with the goal to improve their services for customers and remove friction from their journeys. With new challengers in the banking market, established banks are capitalising on their brands and infrastructure to offer a sophisticated experience to their end users. Traditional online services and sales and mobile commerce are integrating with bricks and clicks services.

Innovation is key to the success of digitalisation. The Innovation Director is responsible for strategy, future state architecture and often for investing in small hi-tech sometimes multi-million dollar companies. A lynchpin in this space, the Innovation Director is tasked to work and network with Fintech. Whilst the banks have legacy systems to contend with, the Fintech start-ups have a clean slate and bright blue sky. To marry the best of both worlds is an enviable task for the Director.

Vacancy breakdown by skills

32%BA/PM/Change

39%Application

Development

16%Infrastructureand Support

13%Data BI

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Neutralising Cyber Threats

With recent high profile security breaches seen in the press, security experts in the banks expect cyber attacks to increase in the coming year. We have seen a strong trend for businesses auditing and assessing their technology in order to understand their potential exposure. Cloud computing allows vast amounts of data to be stored without taking up one inch of physical space. Increasingly, businesses rely on it to warehouse their sensitive information. Hackers targeting cloud computing could be a big threat in 2016, in particular when the data is managed on a mobile device. However the biggest threats are not going to be information breaches but the attacks against critical infrastructure, like utilities, telecommunications and logistics.

In response, voice biometrics, fingerprints, iris scans and other authentication options have started to replace passwords as a means to verify a user’s identity and simplify the online and mobile login process. The key is to provide security against hackers whilst improving the overall user experience. The advent of the bank domain may protect against spammers and phishers. New ideas such as replacing credit card magnetic strips and building new CryptoWall will create high demands

across all business sectors, but especially in banking.

All in all, roles for Access Control, Information Security, Encryption and Network Security skills have been increasing throughout the year and we predict that the upward trend will continue in 2016.

A New Take on Data Specialist Talents

With highly defined data strategies companies are now recognising Business Intelligence and as a separate talent market to both Technology and Change.

In 2015, McGregor Boyall’s Data Subject Matter Experts in BI, Datawarehousing and Enterprise Data Management related positions and have never been busier. Banks are in a race to recruit all manner of data specialists including modellers, architects, stewards, governance and scientists, largely focussed in change initiatives. We are also seeing demand for regulatory, risk and compliance, but also advanced data analysts for cross-selling and up-selling of targeted offering, as well as mobile tracking of customers’ tastes across channels and devices. Client segmentation and improved CRM strategy have been key to balance cost

versus service. In particular lack of Big Data skillset means that employers are offering greater flexibility globally and are willing to upskill to the required level. Data Management agendas are long term, so where possible the appetite is for permanent hires.

Payment Technology – The Real Life Application which affects you

Problems with payments have hit headlines once again in 2015, mainly caused by platform inefficiencies after a decade of mergers and acquisition. Banks have battled over Payments Experts with functional, architectural, technical and proven delivery skills.

Whilst dealing with legacy integration, the advancement in digital technology has welcomed many new trends over the last couple of years, and the payment industry is constantly evolving and adapting to keep pace. Consumers have entered this brave new world in one large stride. In 2015, our clients moved further towards a cashless society, and Senior Managers in our clients said that this will continue in 2016, with a further decline in conventional retail banking.

Perm v Contract Vacancies 2015 - 4 week rolling Perm Contract

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Investments have been made in implementing digital services such as e-money accounts with linked debit and prepaid cards. These are quickly emerging as popular alternatives to traditional banking globally. Mobile payments have become extremely competitive and our banking clients, mostly head office banks, have been aggressively reengineering and developing their platforms to expand their services. So far with the increasing flexibility and popularity of smartphones, this method has been very well received by consumers. Watch this space for Biometrics authentication and payments, and the much discussed payments via social media and Bitcoin, whilst banks look to unlock the power behind Blockchain.

Transformation under Cost Control

There were many challenges for the banks in 2015 as they are under more pressure than ever to improve their efficiency. After a decade of mergers and acquisitions, the largest banks have not become systematically more

efficient. In the past two years, however, it has been evident that the banks’ that focused on controlling cost have clearly outperformed their less savvy competitors. In 2015, cost control implementation came into fruition as part of the power shift in banking organisations.

In 2015, to control costs and improve profits, CXOs exited and their replacements entered, under pressure from the shareholders and penalties from regulators. Additionally, the change of economical appetite in China and the Far East along with the fall in oil prices had a knock on affect for the banks. Organisational terraforming, which effects the future of global banking, moved bravely on with its costly implementation partner Technology, cautiously supporting data as it gets bigger.

As a result, we have seen many openings for talents, often Consultants, taking new positions as Business Managers / COOs / PMOs, to redesign organisations top down. They are tasked with optimising IT operations, mostly in the form of sharing services, group functionalisation and

applying stricter spending frameworks with more efficient procurement and sourcing processes. Throughout 2015 nearshoring continued to be favourable, for geographical proximity, speed to market, lower costs (including travel costs), fewer language barriers and cultural learning curves. To implement this, geographical talent mining is becoming a new focus for Human Resources.

Other Technology Hotspots in 2015

Across Asset Classes

2015 saw a rise in hiring in the Equities space, especially for the US investment banks, and in particular for low latency and eTrading. Rarer and emerging technologies such as Scala and HTML5 became increasingly popular. Otherwise headcount growth in FX remained strong. Across Risk and Regulatory related projects Java Developers have been in demand – with just a slight edge over C#.

The growth of Digitalisation this year has made the banks’ core business innovative. A new breed of Programmer, the Full Stack Developer with Mobile Development, Web, Database and SEO skills are really Integrators. The expansion created roles for technical UX Analysts and Designers, who are creative and technical, tasked with delivering a seamless customer journey.

As mentioned above, Data has now become highly specialised, and we hear about new technologies weekly. Examples include Hadoop, Cassandra, Spotfire, MongoDB, Tableau, Alteryx, Self Service BI, Mobile BI, Data Lakes.

30%

20%

10%

0

Candidate Source

McGregor BoyallDatabase

Passive, Professional &

Social networks

Advertising & using CV Boards

Recommendation

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Applications Support and Testing

Applications Support has remained a focussed and essential vertical hire, especially within the 3rd party for FX, eTrading and Front Office. There has been good demand for FIX, Murex – both implementation and migration, and Marketview. Users increasingly expect more visible results and more reliable technology, and putting in place more structured support is a step in the right direction. ServiceNow has been offered as a solution which works well with Cloud, improves application deployment, increases workflow efficiency and the Demand of this skillset spiked mid-2015. Other products also implemented include HP Service Desk and BMC Remedy.

It has also been a good year for Testers as the entire DevOps and Developers in Test models grew and evolved. Quality Assurance and Testing are often skills required together. We have seen movements in Testers for Regulatory related projects, Credit Risk, SAS, VAR, CVA and Digital with buzzwords such as Quality Centre, Loadrunner and JMeter.

Agile and DevOps Come of Age

Agile evangelists believe that Agile and DevOps Practices control costs as well as delivery time. This is exactly what both technologists and business want. Throughout 2015, top down initiatives to affect Scrum, Kanban and Lean process improvements were implemented as change programmes, altering location strategy, technology and operational roadmaps across banking groups.

For this, clients have needed a new generation of Business Analysts who would leave the requirements in the stakeholders’ hands, see how they test, and if they accept whilst owning the product. Also the project teams now require DevOps professionals for integration, release and engineering

continuous deployment across business, applications and infrastructure.

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” - Socrates

A Preview of 2016

As regulatory and compliance requirements march on into the fourth year, early indicators are that there will be continued demand for PRA / BOE knowledge as Basel 4 Regulations loom. Policy Teams for both business and technology are set to become larger as the banks’ internal models become less of an advantage. We expect salaries and rates to increase many folds, responding to the demand in both permanent and contract hires. It is too early to see the impact of the recent announcement from the FCA to drop its plan to investigate the banking culture. Perhaps banking executives will see signs of the pressure easing, or at the very least another priority shift.

Big Data is the core of many key programmes, now sitting in the newly established Chief Data Office. It will remain the hot topics in the coming year. Whilst recruiting many faceted skills, there will also be a need to integrate Client and Product Data into broader agendas. Hiring in Data will be ring-fenced, and continue in spite of seasonal slowdown and freezes. New location strategy and nearshoring will keep the cost reasonable, at least in theory.

Banks will continue to near-shore their technical and operational headcounts and will expand in Glasgow, Edinburgh, Birmingham, Eastern Europe and the Northern Powerhouse. The target candidate pool will extend to retail, Fintech and hi-tech. On the topic of talents, gender diversity is now common currency. Next year increasing male-female ratio in big banks will get even more serious as a formal target of 33% of females in boardrooms by 2020 has recently been set for FTSE100 firms. No doubt we all need to be more creative in recruiting, retaining, developing and promoting diverse talent.

An Innovation Architect provides a peep into the future:

Messaging Apps - The new Social

Media

The Internet of things, or everything?

Blockchain Power

CyberSecurity

Big Data and The Beacon

Crowd Funding for everything

Mobile Payments Loyalty Points

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