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Strategic workforce planning in Investment Banks: what employers need to know

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Nicola Hancock, Client Services Director of Investment Banking, Alexander Mann Solutions

by Nicola Hancock, Client Services Director of Investment Banking, Alexander Mann Solutions

We’ve all heard of the so-called ‘war-for-talent’ within the US Investment Banking and Financial services field. In fact, it’s no secret that there’s an ever-increasing demand for specific and niche skills, but short supply of the requisite talent. In particular, the ability to attract technology[i] experts into investment banking is arguably presenting the greatest challenge for many employers.

Nicola Hancock, Client Services Director of Investment Banking, Alexander Mann Solutions

Nicola Hancock, Client Services Director of Investment Banking, Alexander Mann Solutions

Whilst Deutsche Bank chief executive John Cryan’s famous idea[ii] of replacing as many as half of his 98,000 staff with robots has not yet come into fruition, the proliferation of Artificial Intelligence (AI) on trading floors is impacting the skills that firms need to stay competitive. And with technology acting as the enabler behind almost everything an investment bank does, having the right Tech talent on board to support the management of existing systems and integration of new ones is now more crucial than it has ever been.

The challenge for employers, however, lies in competing for these professionals with Tech giants such as Google and Facebook – which, on the surface, may seem to have more appealing employer value propositions for this talent pool.

On top of this, hirers in the investment banking arena are facing a further battle that can often go undiscussed: the sheer extent of irrelevant CVs that need to be sifted through in order to seek out the perfect candidate. In general, many banks are likely to hire between 1% to 5% of the applications that they receive – that’s a vast number of individuals that need to be deselected. With so many organizations preferring the human approach and relying on people to complete this time-consuming task, the impact on resources and costs can be significant. This, of course, can also present a significant challenge in terms of providing a positive candidate experience to all involved in the hiring process, even those unsuccessful applicants.

In this volatile and ambiguous landscape, implementing the right strategy to secure and retain the talent they need to thrive is crucial for investment banks. But how?

Make the most of Tech

Technological evolution is increasingly becoming a crucial component in every role, across all sectors and geographies, and talent sourcing in Investment Banking is no different. With resourcing teams facing a barrage of applications, the integration of AI and robotics to manage much of the administrative process can streamline hiring for the benefit of the candidate and hirer alike. Crucially, this can free up time for better interaction between the employer and the selected applicants, enabling hiring teams to build a greater rapport with potential talent. The ability to speed up the entire process will also be hugely valuable to improving the candidate experience, allowing feedback to be shared with unsuccessful applicants in a timely manner.

Of course, in many cases it’s not easy to get this technology through the information security processes at banks, so whilst there is certainly an appetite for this, it will be those who can navigate it best that will reap the greatest rewards.

Strategic talent pools

Critically, firms need to be tapping into data and market insights to identify where the talent they need both now – and in the near future – can be found. Time spent on developing a strong, targeted proposition, which is proactively focused on where talent is and has a clear ongoing engagement strategy, will help organizations get ahead, rather than relying on responses to live roles. This will also impact how banks look at their location strategy, especially in a context of reducing operating costs and increasing efficiency. In the US specifically, New York still remains the largest hub of financial services talent, but it has begun to stagnate, with Dallas, Houston, Phoenix, Jacksonville and Denver some of the fastest growing hubs of today.

Really analyse your employer brand

When it comes to attracting Tech talent into the industry, too few firms are integrating their digital credentials into the wider employer value proposition in order to really compete with the major Tech giants. Too often organizations assume Tech talent will come to them because of their brand as a big global bank.Tier 1 investment banks can perhaps be forgiven for believing that their well-known brand will resonate with Tech talent – but the simple fact is, it won’t.

That’s not to say that these firms should seek to directly compete with the likes of Google – what we need to see across investment banking is a greater emphasis on the opportunities for Tech talent. There’s more room for digital innovation than many potential employees are perhaps aware. Communicating this is the first step in generating a strong employer brand that appeals to this talent pool.

Utilise training and development

It’s vital that all of the above effort doesn’t end once a candidate is hired. Given the scarcity of Tech talent available to Investment Banks, competition will be rife and there’s the risk of potentially losing high performing professionals quickly.  It’s here that training and development plays a pivotal role, with the likes of Toronto-Dominion Bank leading the way in innovative thinking in this field.

The leading North American bank has introduced [iii] a process to facilitate quick promotions of junior employees in order to beat the competition for top emerging talent. According to the firm’s Vice Chair and Head of Corporate and Investment Banking, Robbie Pryde, “to continue to attract and retain exceptional new colleagues, we need to demonstrate leadership among our peers and commitment to the development of our people. We must also ensure that talent development D is top of mind as an employer of choice among graduates.”

There’s no doubt that strategic workforce planning is becoming increasingly complex in the US Investment Banking arena. Employers are now facing a battlefield that has moved markedly from the landscape of ten years ago – and this will only continue to evolve. The need to adapt talent attraction and engagement strategies quickly is now more important than it has ever been, and it will be those organizations able to swiftly innovate that will get ahead in the war for talent. Are you prepared?

[i]Quora. “Which Areas In Investment Banking Are Experiencing Talent Gaps?” Forbes, Forbes Magazine, 20 Dec. 2017, www.forbes.com/sites/quora/2017/12/20/which-areas-in-investment-banking-are-experiencing-talent-gaps/#352bbde55450.

[ii]Hess, Abigail. “Deutsche Bank CEO Suggests Robots Could Replace Half the Company’s 97,000 Employees.” CNBC, CNBC, 8 Nov. 2017, www.cnbc.com/2017/11/08/deutsche-bank-ceo-suggests-robots-could-replace-half-its-employees.html.

[iii]Rastello, Sandrine, and Bloomberg News. “TD Bank Speeds up Junior Bankers’ Promotions to Attract and Keep Young Talent.” Financial Post, 9 July 2018, business.financialpost.com/news/fp-street/td-bank-speeds-up-junior-bankers-promotions-to-attract-and-keep-young-talent.

Banking

Bank of Ireland limits 2020 loss with strong second half, shares rise

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Bank of Ireland limits 2020 loss with strong second half, shares rise 1

By Padraic Halpin

DUBLIN (Reuters) – Bank of Ireland limited its underlying 2020 loss to 374 million euros ($452 million) after a return to profitability in the second half, the bank said on Monday, sending its shares more than 5% higher.

Ireland’s largest bank by assets also announced the closure of one-third of its branches in Ireland, 10 days after NatWest said it would wind down its Irish arm Ulster Bank.

The bank set aside 1.1 billion euros to cover possible loan defaults due to COVID-19 disruption, the bottom of its forecast range and which it expects to capture the majority of credit impairment risk associated with the pandemic.

An underlying 295 million euros second half profit limited the damage as lending and business income improved, trends Chief Financial Officer Myles O’Grady said continued into 2021, even though Ireland was in a long lockdown again.

“It’s clear that there is some impact from this lockdown but the signals overall are encouraging. We do think (the second half) will be a return to a more normalised level of activity,” O’Grady told Reuters.

Shares in the bank were 5.1% higher at 3.6 euros by 0910 GMT.

The bank cut it costs by 4% year on year in 2020, meaning it achieved its 1.7 billion euro annual cost target one year early. It set a new goal of cutting costs further to 1.5 billion euros by 2023.

That will partly be achieved by branch closures, with its Irish network cut to 169 from 257 from September and Northern Irish presence more than halved to 13. It struck a deal with the Irish post office to offer customers access to banking services at An Post locations.

The head of Ireland’s Finance Services Union described the announcement of closures in the middle of a pandemic as a “shameful act” that needed to be reversed.

Bank of Ireland’s core Tier 1 capital ratio, a key measure of financial strength, stood at 13.4% versus 13.5% at the end of September. The bank said it expected capital to remain broadly in line with those levels in 2021.

The bank’s guidance for this year should support the restart of distributions to shareholders in relation to full-year 2021 results, Chief Executive Francesca McDonagh said, adding that future distributions will likely include share buybacks.

($1 = 0.8272 euros)

(Reporting by Padraic Halpin; Editing by Edmund Blair)

 

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Banking

Functions and Features of Offshore Banks to Know About

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Functions and Features of Offshore Banks to Know About 2

By Luigi Wewege, Senior Vice President, and Head of Private Banking of Belize based Caye International Bank

 

Have you been mulling over the idea of establishing an offshore checking or savings account? Maybe the idea of having an investment account with an offshore bank has been on your mind. If so, now is the time to explore these options more fully.

You’ll find that the features and functions of offshore banks have quite a bit to offer. Here are just a few examples to keep in mind.

Account Types That Are Familiar Plus More

One of the first things you’ll notice is that all of the domestic account types you’re familiar with are also available internationally. Along with those, you’ll find accounts that have some features that aren’t found at home. Some of them will help you grow your accounts or save money faster.

From time deposit accounts to special retirement funds, there’s something for just about everyone. Bank officials are happy to explain how each account type works and what it can do for you.

Competitive Interest Rates

Depending on how much you can deposit into an account, the interest rate that applies can be higher than what you receive at home. This is especially true if you opt for accounts that come with tiered interest rates. As you exceed and maintain certain balance levels, it’s possible to lock in higher interest rates.

Think of what this could mean if the plan is to save money for your retirement years. As you add to the balances and let them remain in the account, more interest is earned. Start that when you still have at least a couple of decades left to work full time, and the result could be a significant nest egg to use during those retirement years.

Easy Online Management

The days when managing offshore accounts required the post or some other slower method are gone. The best offshore banks provide online management to their clients. That means you can transfer funds between accounts with ease.

Think of how nice it would be to initiate a funds transfer that moves money from a domestic account to an international one. This can be done any time of the day or night. You will know when it posts to the account, often on the next business day. How much simpler could it be to get money in those accounts?

With the Best in Security Measures
Security is a priority with offshore banks. Data is encrypted correctly, account access is monitored, and there are plenty of safeguards in place. Other than authorized bank personnel and yourself, no one is getting into your accounts.

Top offshore banks evaluate and update security measures regularly. This makes it possible to remain ahead of the most recently launched threats and prevent hackers from accessing your funds.

Protection From Political and Market Upheavals

It’s no secret that political shifts and marketing changes impact the financial world. One way you can minimize the effect on your wealth is to house part of it in offshore accounts. Whatever is happening at home will not impact the funds you have placed in offshore accounts.

No matter what happens to your domestic assets, your offshore funds and holdings remain intact. Regardless of the losses you might incur at home, you’ll still have your offshore balances to help you get back on your feet.

Safeguard Against Legal Troubles at Home

No one is immune from being the defendant in a lawsuit. It could be a personal injury suit or a civil action against you. It could even be problems with a tax agency that leads to seizing your bank accounts or garnishing your wages. While it would be impossible to protect your domestic assets from these types of issues, your offshore assets are different.

In most instances, a judgment in a civil suit or a tax garnishment will not result in the seizure of any of your offshore accounts. They remain outside the jurisdiction of a domestic court.

A Wider Range of Investment Opportunities

Setting up accounts in the right offshore location allows you to take advantage of many investment opportunities that aren’t available at home. It’s not just the possibility of greater returns that captures your interest. The options themselves are broader than what you can access using any domestic banking or investment firm.

From real estate to currency trading, some options are likely to be of interest. Many of them can be managed through one or more arms of your international bank. Since many offshore banks have personnel who can provide information about investment opportunities, it’s easy to access factual data to help you decide if a particular investment fits in with your overall financial goals.

Possibly Superior Rates of Exchange When You Travel

Here’s something to consider if you tend to travel abroad regularly. When it comes to the exchange rate between different currencies, using your offshore checking account balance rather than a domestic one may be a better choice. That’s because there may be a more favorable exchange rate between your offshore account and the nation where you’re visiting.

A better exchange rate increases your buying power and lessens the overall cost of your trip. You’ll spend less on big-ticket items like hotels, air or rail travel, and meals.

Benefit from Opening an Offshore Bank Account

You don’t have to be rich to establish and grow offshore bank accounts. You’ll find banks that allow you to open an account with relatively modest balances and add to them with ease.

Over time, these balances help you achieve greater financial stability and ensure a more secure future.

 

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Banking

Banks in EU to publish world’s first ‘green’ yardstick from next year

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Banks in EU to publish world's first 'green' yardstick from next year 3

By Huw Jones

LONDON (Reuters) – Banks in the European Union would have to publish a groundbreaking “green asset ratio” (GAR) as a core measure of their climate-friendly business activities from next year, the EU’s banking watchdog proposed on Monday.

As the trend in sustainable investing gathers pace, regulators want investors to get more reliable information on a bank’s exposures to climate change as storms and other weather events affect the value of their assets and liabilities.

The European Banking Authority (EBA) said the ratio, put out to formal public consultation on Monday, will measure the amount of climate-friendly loans, advances and debt securities compared to total assets on a lender’s balance sheet to reach a percent figure.

“I believe it’s the first time regulators are asking for a green asset ratio,” said Piers Haben, EBA’s director of banking, markets, innovation and consumers.

“The numbers may well be single digit for banks at first and that’s why context will be important. When a bank talks about where it wants to be in 2030, that is going to be really interesting on the green asset ratio.”

The new EU “taxonomy” would be used to define which assetsare environmentally sustainable.

EBA said that many stakeholders have a legitimate interest in the physical and transition risks that banks are exposed to from climate change.

Banks are likely to face pressure from investors to show what steps they are taking to increase their GAR over time, though few lenders are expected to reach 100%.

The watchdog was responding to a request from the EU’sexecutive European Commission on how to implement upcomingrequirements on climate-related disclosures by banks.

The GAR would published in a bank’s annual report, starting from 2022 based on data up to Dec. 31, 2021.

Banks will also have to publish three other indicators showing the extent to which fees from advisory services, major trading operations and off-balance sheet exposures are derived from climate-friendly activities.

(Reporting by Huw Jones; Editing by Ana Nicolaci da Costa)

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