Here is Why You should Check Your Skill Set and Reinvent Yourself

Investment banks and investment management companies have demanding shopping lists of competencies they seek in employees. By 2025, there will be many disruptions in a financial industry. Keeping clients’ data secure, having mobile apps that are user-friendly, having the analytics to know who your customer is and how to attract them are just some of the concerns these firms have to gain market share.

You’ll need to go beyond ‘teamwork’ and communication’ to stand out from the crowd.

Key banking skill 1: Intellectual becoming an Analytics Wizard

Let’s highlight the importance of intellectual curiosity– particularly asking the right questions and following the right leads during research. It also looks for broad mindedness, specifically not jumping to conclusions or taking anything at face value. The more financial companies are seeking for intellectuals that can be focused more on analytics data than transactions, helping business and enable effective business partnering.

Key banking skill 2: Innovation, Regulatory Compliance and Risk Management

Specifically, citing entrepreneurial skills is essential, meaning the ability to think inventively and spot areas for development and keep in mind the potential risks. The level of risk is rapidly increasing therefore it is essential to identify, monitor and manage risk issues properly and on time. Many companies will be out of business earlier as they were supposed to be decades ago if they do not address risk areas adequately.

The following areas are likely to be in-demand long-term:

  • Regulatory compliance – one hot-button issue is a fiduciary standard in investment management, wealth management and banking;
  •  IT risk management – many of the banks are not performing well on regulatory exams;
  • Business continuity management, disaster recovery and resiliency; and
  • Liquidity and interest-rate risk management, particularly as interest rates begin to rise globally.

It is believed that protecting against money-laundering, complying with international sanctions and tax compliance will be areas of ongoing focus, specifically anti-money laundering (AML), the Office of Foreign Assets Control (OFAC) and know your customers (KYC) initiatives.

Key banking skill 3: Turning into Tech-Savvy

Financial professionals must look into their business models and figure out how it can be constantly adapted. There is no longer a safe haven to rely on old tools, measures and technologies. The millennials are thinking and living differently using technology on-the-go so do you need to do, turning into tech-savvy. In the nearly future, the innovation such as block-chain and internet-of-things will dictate your daily life. There is no more transaction experience when you leave your Uber car nowadays, expect it to be similar in a banking industry – such as positions in the Front Office. The old way of thinking is so 90’s and stifles away the innovations.

If you want to have staying power in the financial services big data / IT space, gain your experience in the following areas:

  • Cyber-security,
  •  Data Analytics (incl. predictive analytics),
  • Mobile Applications,
  • Cloud computing and capabilities as a service (Infrastructure-as-a- service – IaaS, Platform-as-a-service (PaaS),..),
  • Payment Card Industry (PCI) and identity protection,
  • Low-latency trading platforms,
  • Strategic IT outsourcing.

Key banking skill 4: Operations and Change Management

Financial services companies are currently focused on reducing costs, improving productivity and developing new and profitable products and services. People who can assist in implementing regulatory requirements and operational processes into businesses will be in demand.

The operations risk management professionals are greatly positioned as they can identify process improvements and reduce costs. Highly technical professionals typically lack an expertise in implementing the changes and with a block-chain technology, people with operations and change management will be well situated as they understand technology and can engage stakeholders and senior management on adoption.

Highly technical professionals typically lack an expertise in implementing the changes and with a block-chain technology, people with operations and change management will be well situated as they understand technology and can engage stakeholders and senior management on adoption.

Key banking skill 5: Connector between Business and Data Scientists

Big Data and Analytics have already found a way in terms of finding new markets and revenue generation though expect that it can be used in a way to understand and control costs as well. It is not expected that you turn into a data scientist but to become a connector between business and data scientists.

Key banking skill 6: Close Client Relationship

With the frenetic changes to digital technology and platforms, the most successful people across sectors will continue to hone their client-service skills. Those who can stay ahead of the technology curve and provide new types of value-added services for their clients and their employer will be the winners. High-value clients will always want a trusted financial adviser who can help them to leverage new robo-adviser offerings and other digital platforms while still providing a personal touch in managing their investments.

It is recommended to check your skill set and reinvent yourself.

5 things to know about Investment Researches right now

Impact on Research for Investment Firms

The European securities and derivatives market is getting even more complicated as the new regulation MiFID II (Research Payment Account, RPA) goes live in January 2018. It seeks to increase investors protection and transparency. Investment firms will need to have in place systems to manage unbundled payments for execution and advisory services, develop numerous services that are categorized as research and pricing models for these services.

London businessman transparent

5 important things to know about Investment Researches right now as follows:

  1. Sell side firms (such as investment bankers and brokers) will have to disclose the associated costs and charges to buy-side firms in order for them to demonstrate that they are acting in their best interests and and have not been induced to trade. Sell side firms need to provide clients unbundled cost of trading, separately identifying and charging for execution, research and other advisory services.
  2. Sell side firms are required to review and identify services provided that could becategorized as research and therefore for which payment would be required. It no longer just applies to independent investment research but also applies to advisory services provided by Front Office Sales or Trading Personnel. This includes: materials or services that could inform an investment strategy, adding value to an investment decision; covers one or several financial instruments, issuers of financial instruments, assets or related market sectors; or provides a substantiated opinion as to the present or future value of the given asset, instrument or issuer.
  3. Buy side firms have to make explicit payments for research. Additional difficulties include how investment managers buying in this research prove its value to their clients to justify the fees paid.
  4. Early Morning Newsbriefs – that investors are receiving in their inboxes before sipping a cup of coffee and getting a brief overview of economy, previous day’s events, rates, currencies, central banks and economic numbers – are under the scope of research services unless they are only “short market updates” with a limited commentary or opinion.
  5. Quality and scope of research may decline: There is also a concern that the quality of research will decrease as its price becomes more transparent and therefore important. The drive to minimise costs is likely to result in a rationalisation of the research market, with fewer providers and fewer securities being covered. This could result in less efficient allocation of capital and reduced liquidity for securities issued by smaller cap companies.

It no longer just applies to independent investment research but also applies to advisory services provided by Front Office Sales or Trading Personnel.

 

Level playing field

Thinking critically, isn’t it a point of reading research to collect the most diverse range of views on a chosen subject. Furthermore, the morning newsletters were a great source for investors to get a quick glimpse what on the markets are going on.

In my opinion, the regulators forgot the fact the markets are globally interconnected so it will be a burden for European investment firms to compete with e.g. American ones as MiFID is not imposed in the USA.

In particular, EU fund managers that are subject to the AIFMD or the UCITS Directive are outside the scope of these proposals, while US investment managers are free to operate as they always did.

Two-tier pricing model in a shape

There is still an open question on how much banks might charge and the practice taking a shape is a two-tier pricing model. A full research (including meetings with an analyst and conference invitations) will be charged around 10k -20k € per year. Industry-wide, considerable amount of negotiations on the end fees paid are expected.

Barclays is set to charge clients as much as 350k £ for a full access for its analyst research and are the first to set out the packages such as gold, silver and bronze; with a gold deal offering unlimited access to reports and occasional meetings with analyst. The entry deal starts with 30k £.

The proposed costs of fixed income research are equally varied with Nomura and Credit Agricole demanding up to 120k $, Bloomberg reports, while JP Morgan has proposed 50k $ as a base fee.

In the UK, Woodford Investment Management, Jupiter and M&G are among the asset managers that have said they will absorb costs, while Schroders and Man Group plan to pass costs on to clients.

There is still a blurred line between marketing and research. A short market updates with a limited commentary will be free of charge.

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