Banks are reaching the realisation that they really need business analysts for all the OTC derivatives projects
Regulatory pressure to create more transparency around the OTC derivatives processing is forcing investment banks to divert IT resources towards this area. So far, a lot of the hiring is at a strategic level, but there are reasons to believe this will filter down to the lower ranks.
There are some positive signs that technologists focusing on OTC derivatives will soon find their services in demand. Credit Suisse, for instance, has been completely reengineering its OTC derivatives processing infrastructure, while the likes of UBS and Morgan Stanley are currently hiring for business analysts to lead change in this area.
Broadly speaking, the move toward central counterparty clearing (CCP) for OTC derivatives and systems that provide more transparency in the market is likely to be a key trend in the European securities market this year, suggests research from IT consultancy Celent.
"Sell side firms will be spending on automation of post-trade, and the regulatory shift to CCPs will result in continued spending on derivatives technology," it said in its recent report into IT spending in financial services. "Regulatory glare will drive financial firms to roll out projects that capture derivatives trade data."
There's already some evidence of this affecting recruitment, with the latest financial services hiring index from recruiters McGregor Boyall suggesting that derivatives currently make up the largest proportion of vacancies at 12%.
But banks are yet to take a hammer and fist approach to hiring in the OTC derivatives sector, suggests Andrew Keene, director at financial markets technology recruiter Thomson Keene.
"There's definite momentum building up around business analysis roles to oversee OTC derivatives projects, with a few investment banks now looking to recruit," he says. "Generally, product knowledge is favoured above technical skills."
Because a lot of the OTC derivatives projects currently underway are all about overhauling the processing infrastructure and looking at concerns like scalability, risk management and (of course) cost effectiveness, there's also a growing requirement for change management professionals.
"These projects are often more complex in nature than developing new front office systems," says Paul Elworthy, managing director at Hudson IT. "Most of the recruitment is therefore focusing on bringing in experienced change managers to look strategically at the issue."
