December 3, 2023

Investment Banking

Let Your Investment Banking Do The Walking

these banking jobs are safest now

Banks are cutting jobs. But cuts aren’t being distributed equally – and those that are safest might surprise you.

Nick Reed, the man formerly tasked with the transformation of HSBC’s global banking and markets business, and the current COO of corporate training provider Attain, says contemporary bank cuts are merely a “short-term market reaction,” as opposed to a trend. “You can’t afford to have these expensive investment bankers on your roster when there’s nothing for them to do,” he says.

The most expendable bankers are seniors and, paradoxically, juniors. “If you’ve loaded up on expensive heavy hitters, then they’re the first to go,” Reed explains. As for juniors, it’s a simple case of “first in, first out,” he says.

VPs and directors might just be the safest roles in the industry right now. Although “you’ve got some sunk costs because you’ve invested quite a lot of time and effort in them,” Reed says, “they’re not super expensive yet. There’s an incentive to hang on to them.”

But bankers are rarely the first on the list to go, regardless of seniority. “Banks are hiring more and more tech people into the bank, which is all about automating out the manual processes,” he says. Automation has two purposes: reducing staff (and therefore fixed costs), and reducing the risk of error.

Front office banking jobs are therefore comparatively safe. It’s operations roles that are particularly precarious. Risk and compliance roles should also be ok, for the moment. “It isn’t political at the moment for banks to be reducing the number of risk and compliance people, because that makes them look like they don’t care about it,” says Reed.

If you do lose a client-facing banking job now, Reed suggests it’s simply a waiting game. “When the market comes back, if the market comes back, and suddenly activity starts to pick up again, you just hire them back,” he says.

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