Why you should expect more technology jobs thanks to MiFID II
Technologists working in financial institutions have reasons to thank the regulators for creating mandatory projects that won't be canned in the wake of current market conditions. The second Markets in Financial Instrument Directive (MiFID) is likely to add banks' tech burden, but ultimately create new jobs.
Billed as MiFID II, the new measures unveiled by the European Commission last month aim to extend its regulation of the equity markets outlined in the initial regulation into areas like commodities and off-exchange derivative markets as well as clamping down on high frequency trading.
From a business perspective it's not great news, especially in the current climate. The initial reaction from PwC suggested that investment banks will feel the squeeze even further, particularly in their fixed income business, and that OTC trading could also decline as a result.
Even if financial services firms view the changes as a necessary evil, it's going to be costly, particularly in terms of technology investment. There are stringent new requirements around the publication of transparency data and transaction reporting.
In order to comply with the additional data and reporting requirements alone, companies are going to have to invest heavily, suggests Giles Williams, co-head of KPMG's Regulatory Centre of Excellence in Europe.
"Getting the simple initial reporting data right under MiFID I proved to be time consuming and expensive; MiFID II is even more complex," he says.
So, here's the good news; technology jobs will be created.
There's going to be a need to fundamentally change to the infrastructure of banks' technology systems, including the way they manage both their own and clients' information, suggests Chris Pickles, head of industry initiatives, global banking & financial markets at BT and chair of the MiFID joint working group.
"At the moment, banks' IT teams are generally being shrunk, but MiFID will present a large number of new job opportunities," he says. "People with knowledge of information management, particularly client data management and reference data, and those with business process change experience will find themselves very much in demand."
Moreover, he says, it's also an opportunity for those with expertise in this relatively back office function to market themselves to potential employers.
"There's already evidence that a small number of senior people in this area are being poached from one company to another, and there's scope for more people to develop a name for themselves," he says. "Speaking at industry conferences, commenting in the press on the issue or simply gaining a reputation among your peers can help improve your career prospects."
