Finance Industry Review & Update 2013: The Money Makers
At the start of 2013, 46% of MDs working in the finance industry received a salary hike – as opposed to 25% the year before. On Wall Street, 20,000 jobs were posted online and hiring in October 2013 went up by 16% versus the hiring rate in October 2012.
The recession had left this industry bleeding, but today, the signs of recovery – sustainable recovery at that – are all around us. While all sub-sectors in finance have been showing signs of growth, 30% of hiring was in commercial banking, making it the number one sub-sector at present.
Industry trends – Talent Gap
Comprising banking, securities and commodities, and insurance, the finance industry is witnessing massive shifts owing to the rise of mobile banking and social networking, and due to the talent gap plaguing the sector. In fact, almost 50% of CEOs view the limited availability of key skills as a major threat to their company’s growth. This is especially true of the financial services sector, with 25% of CEOs stating that they have had to cancel or delay a key initiative over the past year, solely due to a lack of skilled people to execute it. 40% of CEOs in finance believe it will only get harder over time to find the right people for various jobs.
This, at a time when the market is going global, with new pockets of growth emerging in the South and East. Changes in regulations and technology are creating challenges of their own, and international brands are competing not just with other such behemoths, but also with aggressive local challengers. Increasingly, having the right workforce is emerging the key differentiator in this marketplace.
Roles in demand
CFO Magazine reports that 2013 is the year for finance professionals to change jobs within their current sub-sector or even shift to a different sub-sector of finance. Profiles in demand include those in risk management, compliance, asset management, payment strategies, to name a few
Compliance managers are heavily in demand, because of the industry shift towards a stricter regulatory environment. Officers in government and regulatory affairs, accounting and investment too have seen their stock rise.
Companies are also going after professionals in asset management, specifically in asset allocation and macro strategy. As the industry moves en masse to digital and mobile platforms, and embraces ‘big data’ to help improve business operations, there is a new clamor for emerging roles like ‘payments officer’ and payments executives.
In Q3 of 2012, accounting and finance employees’ confidence levels rose by 5.4 points, marking the first rise in confidence in over six months. In Q4 of the same year, 23% of finance and accounting professionals stated that they believed there were better jobs out there for them.
Today, on Wall Street, the following occupations are most in demand:
- Branch/ Department financial manager
- Sales agent (financial services)
- Financial analyst
- Loan officer
Point your compass toward…
US, UK and Australia have long been favorites with those looking to grow their career overseas, and the finance sector is no exception to this. Other popular destinations include Singapore, Canada, Switzerland, France, Hong Kong, UAE, Germany, China, Brazil, Italy, Spain and New Zealand. In a survey conducted by ESCP Europe business school, 72% of respondents said they earned more because they moved abroad, while 77% confirmed that the international move had enhanced their careers. An overwhelming 98% respondents would recommend this experience to other people!
Working in finance opens up a whole range of possibilities for relocation. Every country, every city, requires skilled finance professionals, many of whom make a beeline for the hubs of global finance, such as:
By 2015, Singapore will take over from Switzerland as the global hub for managing international funds. Tightening of taxation rules and introduction of new regulations in Switzerland will help speed the process along. According to PricewaterhouseCoopers, so far, Switzerland manages $2 trillion in assets, making it the world’s biggest offshore financial centre, followed closely by Singapore, London, Hong Kong and New York. The same survey placed Shanghai, Dubai, Brazil, Miami and Mexico City as upcoming centers.
- USA – Boston, Massachusetts; Chicago, Illinois; New York; San Franciso, California
Despite the slowdown, America remains a favored destination for finance professionals. Four of its cities deserve special mention for turning the wheels of global finance, each in its own way.
Boston houses several large money management companies. Asset management is a stable area to work in, in Boston, followed by investment banking and trading.
A hotspot for futures and derivatives trading, Chicago is home to large banks and brokerage firms.
New York is the home of Wall Street, that most reputed of financial hubs in the world. Right now, the city is home to an estimated 230,000 financial professionals.
Finance capital of the western United States, San Francisco has many brokerage and banking firms. The city has the advantage of being close to Silicon Valley, focusing on the technology sector, along with being the global hub of the venture capital industry.
- Dubai, UAE
Dubai has just won the bid to host World Expo 2020, which should give us some idea of the rise and rise of this star in the Middle East. Dubai is among the fastest-growing cities in the world and is home to the regional offices of several large international banks and financial services firms.
- Frankfurt, Germany
One of the top financial hotspots in Europe, Frankfurt hosts the European headquarters of multinational banks and is a great launch-pad for a career spanning the entire continent.
- Hong Kong, China
Hong Kong is among the most strategic locations to build a career in finance. Brokerage, banking, wealth management, trading…you name it, Hong Kong has it. Though the city is definitely a gateway into China, knowledge of Chinese language is not a must to thrive here.
- London, England
After New York, London is the financial capital of the world. Almost every big international bank or brokerage company maintains an office in London, and the city is a hub for currency trading as well.
- Tokyo, Japan
The world’s second largest economy, Tokyo hosts the regional headquarters of several international companies. The catch being, the language barrier here. If you do wish to explore a career in Tokyo, the best way is to work with an international financial company that has an office in Tokyo, and eventually seek a transfer to this city.
- Zurich, Switzerland
It might soon be displaced by Singapore, but Zurich will still remain one of the top financial power centers on the planet. Wealth management and private banking are the pillars of Zurich’s financial industry. Knowledge of German or French brings a slight advantage, though English works just as well. An added incentive is the amazing quality of life in Switzerland, offering clean air, natural beauty and low crime levels offset by high income and an accepting culture.
- Special mention: Gibraltar
Yes, it’s true. Located off the southern tip of Spain, the 300-year-old UK territory has emerged as a magnet for hedge funds. Thanks to low rates of taxation and policies that allow marketing of investment options across the EU, the number of funds in Gibraltar grew by 400% over the past four years to touch a total of 200 funds in 2012. According to the Financial Services Commission, fund managers moving to Gibraltar have previously worked with banks like BNP Paribas and Goldman Sachs, in cities like London and Zurich. Between 2005 and 2012, there has been a 37% increase in financial industry jobs in Gibraltar. This influx is bringing it up to speed with low-tax locations such as Malta, a group of islands in the Mediterranean. The regulatory regime is slowly making the city even more attractive than Switzerland, Monaco or the Channel Islands.
Show me the money!
In a Michael Page survey, 53% of professionals working in finance saw their salaries rise last year. 7% reported an increase of more than 15%, while 6% saw an increase of 10-15%. A staggering 82% respondents believed that switching jobs or being open to new opportunities was the way to maximize their earnings. These jobseekers are looking for opportunities for career growth and to achieve work/ life balance, apart from a growth in income, of course.
On average, starting salaries in finance and accounting are likely to rise by 3.3% over the next year. Higher packages are reserved for financial and business analysts as well as senior accountants. The improved lending environment is also likely to lead to higher-than-average salary growth for mortgage underwriters and processors.