As we approach Christmas, this is a good time of year to catch our breath, reflect on the past 12 months and to think about the year ahead.
In this blog we take a look at some of the key financial services themes that we can look forward to in 2019 and their consequent impact on the commodities and wider financial services jobs markets.
US global financial services firm, UBS, has recently highlighted that 2019 will see a maturing global economic cycle with a number of important political factors to bear in mind for the year ahead. 2019 will feature key nationwide votes in influential countries like India and Greece and also serious campaigning for the next US presidential election. And of course, we can’t ignore Brexit – which we talk about in the next section.
The spectre of Brexit
Regardless of their individual views on leaving or remaining in the EU, many people in the UK are thoroughly sick of the whole Brexit process. Like it or loathe it, the reality is that it continues to cast a shadow over the financial services market in the UK, Europe and indeed worldwide. When we wrote our blog about Brexit in September, little did we think that a clear strategy for the next steps would be no less apparent in the run up to Christmas than it was in the Autumn!
As is the case for many businesses, not knowing what will happen next means that financial services firms which operate in the UK/EU market have to do their best to prepare for all eventualities meaning additional expenditure and diverted resources. Most major firms have already put these contingencies in place and are hoping for a clear plan to emerge in early January.
Despite the growing worldwide dependence on technology in all areas of business – the financial services industry has sometimes been slow to adapt. This is probably not that surprising considering the global nature of some organisations, the sensitivity of their operations and the regulatory environments in which they operate. Technological development has often been implemented piecemeal, without joining-up systems or locations. As we progress into 2019, the most forward thinking financial services players are devising plans which are more strategic and geared towards ensuring that technology improves operations, rather than just manages to keep up with other developments.
Cyber threats are an ongoing challenge
The downside to technological development is the growth of ever more ingenious methods of cyber attack from those who are intent on criminality.
There are few days that go past without the media highlighting the latest incidence of high street bank customers being defrauded in some way. This is all the more relevant for banks with commercial customers where there are many millions of pounds or dollars involved in transactions. Banks need to be proactive when it comes to cyber threats rather than reactionary, as this is a risk that continues to evolve. Risk management should be a key part of ongoing technical development and a focus for financial institutions and regulators in 2019.
What about employment and careers?
Technological development also has a direct impact on work roles in the financial services world. With the increasing automation of some processes – does this leave some people (literally) redundant? In our experience the answer to this is that careers evolve alongside technology, so the best candidates are always those who expand their horizons and keep apace of technological developments in the sectors in which they work. There will always be opportunities for professionals who take this approach.
Another positive development is that we continue to see a growingly diverse workforce in the sector along with a more inclusive and supportive environment fostered by many employers. The financial services industry has been slow to adapt to this, but is gradually coming to understand that more flexibility, mobile working and employee friendly strategies actually lead to greater productivity and not less.
What is the outlook for the commodities sector?
A recent article in financialpost.com has quoted Goldman Sachs Group as saying that they are expecting high returns of 17% in the commodities sector at the beginning of the year but that this is likely to be unsustainable. A number of commentators have also cited the ongoing trade stand-off between China and the US as having the potential to have a negative effect as this situation develops. That said, there should be a positive start to the year and we still see a healthy demand for professionals in this sector.
Could there be another financial crisis?
Economists anticipate financial upheavals or downturns to happen every decade or so. Does this mean that 2019 might be the year where we experience the next financial crisis?
Formal Federal Reserve Chair, Janet Yellen recently spoke of her fears that there are remaining issues in the system (notably a regulatory tide which is turning towards deregulation) which could lead to a crisis, despite having previously said this was unlikely to happen. JP Morgan has also recently put the chances of a US recession at 60% over the next two years (80% over three).
Where the US goes, the world follows – so we can be sure that key stakeholders will continue to carefully monitor developments in the sector in order to mitigate against a major crash.
Happy New Year
Meanwhile at Matchpoint we have had a really enjoyable and successful 2018 and continue to see a high demand for the right candidates for jobs in the City of London and Europe. Please do send us your CV, or browse our jobs online and we will be delighted to match you with the right career opportunity in 2019.
We would like to wish you all a very Happy Christmas and a Prosperous New Year.