Q3 2019 Review on recruitment Market of foreign banks in China

While the entire market was shocked by the huge number of layoffs, the profitability of the Chinese banking industry remained stable and sound in the first half of the year, and employee compensation is steadily rising. Compared with the “sharp turn” of Chinese banks in the face of the cold winter of the market, the transformation of foreign banks is relatively cautious. Morgan McKinley has gained an insight into the current recruitment situation of foreign banks in China.

Recruitment trends of functions:
Stable front office, popular middle office, and tightened back office
 

• Recruitment of front office positions in banks:
   

From a regional perspective, compared with Eastern China and Southern China, talent recruitment in the Northern part of China, especially in Beijing, was more active in the first half of 2019. Most foreign banks are keen to expand their front-office teams covering Chinese corporate customers to increase the income of large SOEs in overseas development, which is mainly related to local enterprises affiliated to SASAC and the “One Belt One Road” initiative. Compared with 2018, the Shanghai market is slightly silent in many different functions of recruiting. Foreign banks in the Southern China market have a small market share, but it is worth mentioning that, as a strategic focus, HSBC’s Pearl River Delta region and Standard Chartered Bank's Greater Bay Area have been expanding and recruiting talents in recent years.

Some popular functions include: account executives for large SOEs, account executives for multinational companies, sales for global markets and credit analysts for large local companies. Main contributors of such demands are Bank of America, JPMorgan Chase, Citibank, Deutsche Bank, ING Bank, Rabobank, Commerzbank, Société Générale, Natixis, BNP Paribas, DBS Bank, Hang Seng Bank and UOB. Most of mandates are for replacements, and new positions have shown signs of waning.
 

• Recruitment of middle office positions in banks:
   

Due to the rotation of compliance personnel between banks, relevant positions have been maintaining a stable demand, and in addition to the fact that more foreign banks have set up branches in China, important compliance positions are also attracting active responses from branches and corporative banks. In addition to regulation and compliance positions, anti-money laundering is also the highlight of recruitment of banks of all sizes in the first half of the year. In contrast, business compliance advisory has remained relatively stable.

In risk-related positions, due to the more stringent requirements made by regulators, positions related to operational risk are in larger demand, especially in smaller banks, where most of such positions are newly increased. With the musical chair between banks or the flow of personnel from larger corporative banks to smaller banks, the overall positions related to operational risk are active in the market; secondly, the demand for positions related to credit risks will be increased accordingly, especially when branches of smaller foreign banks have become more stringent and standardized in the control of credit risks. Positions related to market risk have remained stable as usual.

Due to the instability of the banking platform itself and positions increased with the business needs of some banks, positions related to credit analysis have maintained a certain degree of mobility every year. These positions range from basic analyst to team leader. Some even require a certain amount of experience in credit approval.

With the opening of the secondary market of China’s overseas asset management companies, we have seen some banking professionals trying to join investment-related institutions: for example, the compliance advisory talents of the global market business of banks joining asset management companies for compliance positions; credit analysts from banks join asset management companies or credit rating agencies, which is also a successful and common case.
 

• Recruitment of back office positions in banks:
   

Regionally, the talent demand in Eastern China has remained stable, but as more large banks have set up operation or technology centers in Tianjin, Dalian, Chengdu, Zhuhai and Guangzhou, the demand for operational and technical positions have shifted towards the Northern or Southern of China.

Functionally, after the continuous surge of KYC positions in 2017-2018, the entire market is gradually calming down. Taking the Shanghai market as an example, large foreign banks have begun to streamline personnel and even dissolve or relocate some teams in addition to the vacancies caused by certain turnover. Some branches of smaller foreign banks have gradually begun to establish independent KYC positions in China, but with small demand, higher requirement on comprehensive capacity and higher uncertainty. The demand for operational positions is mostly concentrated in personnel with 3-5 years of work experience, and the demand for senior positions or executive positions is small. The same is true for finance-related positions except for certain demand for regulatory reporting positions, there are not many changes in other financial positions.

With regards to technical positions, corporative banks with a shared service center generally has a higher demand for recruitment; many banks are moving toward a more agile, safe and digital approach in response to the changing market, therefore the demand for some newer job functions is growing (such as digitalization, cyber/information security, data analysis & management and etc.). In addition, many technological talents in the banking industry are moving to the hi-tech, Internet and other more dynamic industries.

Heading for the future cautiously

The sluggish banking market continues to maintain stable and cautious. More mandates are for positions with rigid demand including business positions in the front office, compliance, AML and risk management positions in the middle office, and KYC positions in the back office. Banks are also restructuring their teams with the staff turnover. Whether to maintain the original positions is yet to be arranged by the banks on the market. We will take a wait-and-see attitude and keep up with market changes to understand the recruitment needs.