Capital Markets

Trends for top talent.

Skills become obsolete just as quickly as new talents are needed; continuously evolving as the world around them change.

The P4Capital team investigates what skills are desperately needed in the capital markets today, and how companies can capture them.

Stay tuned.

Transcript

Amanda: Who are the people your company should be looking for? What skills should you have to make yourself appealing to those employers? In this week’s round table discussion, the P4Capital executive team examines who the top talents are, and what skills they possess.

Stay tuned.

Jim: Today’s topic is about what needs we have seen in the technology/ capital markets area since the beginning of January of 2015.

Archana: For those of you just tuning into our weekly podcasts, a quick round of intros – we are the P4Capital team. A division of the established Planet4IT staffing agency, and we are the people who are close to the market makers – the Capital Markets as well as the wealth management professionals. And yes, we are nearing the end of the of the first quarter, and what we plan on doing, just like Jim said, just discussing in terms of where financial technology stands, and also a quick handbook for job aspirants; what are the skills that would be in demand for the rest of the year.

Shaheerah: I just want to start out with the importance of the capital markets: capital markets are where both Canadian and International companies from all over the world come to raise capital in order to run their businesses and to expand globally. And it’s going to be done both through debt and also through equity. And Capital Markets is also a place where companies can come out and they can seek advice on potential transactions and strategic advice on implementing their business plans. And although this is a male dominated industry, there is now a growing need for women in the field as well. And you will see a lot of companies are launching new programs in order to attract more females into this career.

Jim: The interesting part is in the trading side of the financial institutions business, is we’ve gone through 36 months of high frequency routers, dark pools, low latency – and the rationale behind all that was to get better analytics on the trade, get better understandings of liquidity; obviously there’s been a heavy influx of new regulations and reporting. And that’s kind of affected the old creaky systems that have populated the world. So the talent, not only are we looking for the best and brightest of the female and male side, but we’re also looking for difference makers now too. And we hope to carry on more conversation about that momentarily.

Jeremy: Risk Data Aggregation and Reporting, RDARR* as it’s written sometimes, seems to be a big hot button topic for all of our clients. There’s a Basel 3 deadline with 21 months to go now, December 21 2016 that needs to be met, and all the banks and financial players in town need people who understand risk and are able to put it together into a model that will make sense for decision makers.

Archana: Some of the trends that we’ve witnessed so far, and something that we’re definitely going to see more of, going forward, obviously the falling oil prices that’s been a hot button topic really, and a lot of the banks and financial services companies have been majorly impacted with the falling oil prices. Another thing that’s happening that we’ve witnessed is restructuring: a lot of banks are shutting down and really focusing on their core business and trying to automate a lot of these processes that don’t really have direct customer interaction. Another thing that we’ve witnessed, and this is definitely a growing, trend is I call it the deconstruction of the traditional walls that have surrounded the large investment banks and how they’ve been privy to customer information and access to all this data. So this deconstruction obviously is happening as we speak, because access to data in this changing market is majorly on the rise. And another growing trend where banks are losing out on hiring talent is definitely to the digital guys, so banks are revamping their strategy to attract the brightest minds that are out there.

Jim: The position growth, if you will, I’ve also kind of thought to myself was interesting it’s core programming: Java, C, C#, C++. I haven’t as yet seen the advanced analytics programming needs that the digital world is demanding, the R’s, the Matlabs, s and those types. We’ve also seen a heavy influx of business analysis. So people, as Jeremy alluded to, anything that has a strong element of risk process knowledge is in great demand out there. Traded products, front office products – also in great demand out there. Traditional, other support jobs like software package support or infrastructure support, not as much. But hardcore developers yes, hardcore business analysts with solid process knowledge, yes.

Archana: I agree with Jim that we haven’t seen so much of big data and data analytics on the capital markets, side, but I do think that’s something that’s set to change going forward. A lot of these data scientists have been employed by these capital markets firms. They’ve largely been restricted to governments, risk and compliance areas, but increasingly they are going to be used in the front office, and working hand in hand with the Quant guys.

Jeremy: Especially when we get to the phase where banks are going to be analyzing data in real-time, they’re really going to bring in some new and dynamic solutions. We’re really going to see that in the next year.

Jim: I’m hoping though that those people are still available for them Jeremy. We’ve seen in our Planet4IT part of the business, where people with knowledge of how to program advanced algorithms are being captured by game companies, big market data companies that have a service feel to them. And where do they draw them from? Obviously the traded markets, and the people that learned their skills there and have applied them successfully, and they’re being offered great sums of money to do so. I’m 100% in agreement that the front office people will have to come back onto the market, but I think they’re being overshadowed right now by the need for regulation people.

*RDARR stands for Risk Data Aggregation and Risk Reporting program

That was the P4Capital team discussing the Trends for Top talent, and how to be competitive in the workforce. Want to know more? Check out our website and previous posts at www.planet4it.com or follow us @p4capital. Thanks and see you next time.

Where is the Centre of the Financial Universe?

In June 2012, London was the commerce centre of the world.

It rose to the top of a list of 50 cities created by MasterCard Inc. It beat out New York, Tokyo and Chicago. Banks in cities around the world tried to imitate London’s success, and looked to it for guidance and instruction.

According to a Mastercard report from 2012, London surpassed New York, one of its main competitors, in four of six areas:

economic stability
the ease of doing business
volumes of financial flows
attributes as a business centre.

In 2012 the total amount of money raised in Europe was 78 % greater than the value of US offerings, according to data compiled by Bloomberg.

The Global Financial Centre’s Index gave London a score of 785, with New York trailing behind by 20 points at 765.

Fast forward to 2014, and London has lost its place in the top spot. New York has beat out London by two points with a rating of 786 in the Global Financial Centre’s Index. London follows behind with a rating of 784, and Hong Kong comes in a distant third with 761.

What happened? Is New York really the centre of the financial world? If it is, who is its greatest challenger.

Jeremy: I think London still holds the real power. It was New York for a while, but I think it’s crossed over within the last 10 years back to London. Ask yourself, do the banks in Toronto emulate New York or London? Who do they have stronger ties with? London is historically more significant than the United States, I think they’re in a better Time Zone, and that’s a huge thing. When Toronto is still waking up, London has been working for six hours.

Devon: Do Ontarians put their head traders in London or New York?

The sun never sets on the British Empire or its financial prowess it seems. Like Jeremy said, their time zone is ideal for interacting with major city centres around the world.

But when we speak of how fast other financial sectors of the world are gaining traction, we see things in a different light. Sure, London may be in the forefront – 3000 years of an economic society will tend to have these results-but the speed at which all other countries are gaining traction in the financial world is astonishing.

So when we see a sub-economy of the UK, namely Scotland, looking to separate their currency ties, they had better have their technology in line to keep up countries who are looking to make their currency the basis of trade for commerce. The strength of one’s currency can now be influenced by the technology which serves it; this is the kind of technological age that we are now dealing with, one that is on a more globalized scale than ever before.

Jim: I’d argue that since 1990 the wealth has reached the hands of the multitude in London. Thatcher and Thatcherism is long gone, there is no aristocracy and no unions, so everything had balanced out.

It has reached an equilibrium, and from that point where equilibrium was reached, London has been on fire. Carnary Warf is booming out there right now. With all that, regardless of two points on a scale, London is the centre of commerce.

Think back to the story of Jardines, and you can see the growth of Hong Kong and Shanghai. Their head traders are maybe in New York or London, but they are reporting back to a superintendent of head traders.

The east is just miles ahead.

I think in that the question of New York versus London, technology is lagging in both by a gazillion compared to the east.

We’re entering this world where the commerce centre of the Universe is going to be the east. Compared to that, if you’re technology is laggard, you will never be in the centre of the game. New York needs to up their technology to even enter the B leagues.

Archana: In my opinion, to be reckoned as a financial hub, you have to be first and foremost a successful and an attractive city. London definitely leads the popularity index! Coupled with that fact is what my colleagues alluded to..the time difference is a huge plus when deciding on the competitive advantage that both cities have to offer. Also, being a successful city means that London, is able to attract some of the brightest minds in the business, which becomes hugely relevant considering the amount of money that gets exchanged every single trading day! Having said that, whether London continue to be attractive in the years to come depends heavily on how much they invest in their technology, which is definitely lagging behind. This is especially relevant, in the trading circuit where there is a constant need to shave off valuable milliseconds.

Does world strife equal world recession?

It has been a rough month.

War in the Middle East, tensions in Russia and the Ukraine, riots in Ferguson and sanctions and boycotts flying in every direction.

If you examine and monitor all the different trends happening in these situations, the risk of these markets falling into recession is incredibly high.

Double Dip Recession?

If the worst comes to pass and the world economies stutter again, it likely won’t be for the same reasons we dipped into recession in 2008.

Yes, Italy isrecession but that’s more like a hangover of the 2008 crisis than a result of the political turmoil. The real issue revolves around political upheaval in emerging economies. There are massive economies that weren’t major contenders a few short decades. ago. China and India now have as much power as anyone else, but are less predictable politically than America, Europe and the West. They also have a combined population that makes up 36.4% of the world.

It’s always about the Oil

When you break it down, this is a fight over oil. As oil continues to go for 120 US a barrel, and the oil rich nations are pumping out a billion a day, we’re talking about a great deal of wealth. Essentially it’s the same amount of finite resources, but new players on the field who want access to it.

barrel%20clipart

Now we have these new players on the market who have muscled in and, like everyone else on the planet, they want access to the oil. The Africans are trying to use force to grab it, the Mid East is trying to use Religion, and the US and the West are trying to figure out where they stand and what they should do.

Perhaps most alarming out of all of this is the prediction of the= Reserve bank of India Governor.

This institution is one of the few that predicted the 2008 crisis. He has now said that the asset classes are overvalued at the moment, and the risk of the economy falling into a second recession is very high.

Archana: The political atmosphere based on Iraq, Ukraine and Russia has made the economy incredibly violate right now. The risk of these markets falling into a recession is very high. We continuously monitor all of the different trends here at P4Capital, and the economy isn’t looking very positive.

Jim: Italy is like a hangover of what happened in 2008. What is actually going on right is the political upheaval in emerging economies. So all that stuff that has been going on for 40 years since the oil embargo in the mid 1970s in the Middle East is bascially a fight over who owns the oil. Today that revolves around three main factors: the old world powers, strife and aggression, and the new players trying to find their way in all of this. Of course, there are different segments along the way but this really comes down to emerging economies wanting the oil.

Devon: What many fail to realize is that every day on the other side of the planet there is war whether it’s civil, revolutionary, religious, cyber or insurgency. As we have become and continue to be a more globalized world in commerce and in livelihood, we must look to what impacts these have on our international relations. The last time nations were allowed to fall or be forced into recession, the seeds of war were sewn into the fabric of history-the proof of this was World War 2. It is fundamental to the world we live in that we actively look at what changes we can make and how these changes impact those around us so that we may continue the landscape of global commerce successfully

Jeremy: The world is a complex place, and I think it’s impossible to predict when a recession will occur. That being said, recessions are cyclical in nature- so are we heading for another one- yes. When will that be- I don’t know.Over the past 8 years, I’ve noticed a strong positive co-relation between the price of gas at the pump (which is obviously dependent on the price of oil) and the health of the financial markets as exhibited by how willing our clients are to spend money on hiring new people. Higher Oil prices = A robustly functioning economy which encourages job growth. Declining gas prices seem to indicate the opposite, which could be a leading indicator for a looming recession as average gas prices in Toronto have declined by 9% since June 24th.

What do you think?

Join the conversation! Tweet your responses to @planet4it or comment below in the comment section! The best answers will be featured on our Website!

Are the rules that prevent Insider Trading still relevant?

The world is going through a shift that hasn’t been seen since the days of the printing press. Information is everywhere – in our computers, our tablets; in the very air around us, through wireless networks.

With this onslaught of information coming from all corners, we have to ask ourselves — what constitutes Insider Trading?

Can any information truly be considered inside when an ill timed tweet, post or podcast can leak vital information?

What can be considered private when there is a lamp that can live-tweet conversations in real time?

Convosnitch lamp – check it out at http://www.wired.com/2014/04/coversnitch-eavesdropping-lightbulb/

In the 21st century, in the heart of the digital revolution, we have to ask ourselves are the rules for Insider Trading that were devised nearly a hundred years ago still relevant?

And if they aren’t, what can we do?

As many of you know, legislation in Canada is not really law until it hits the courts. The politicians may decide that something should be law, but until a precedent is set, it is difficult to enforce.

It typically takes three judgements for that precedent to be set. Then future judges who have to deal with the issue have something to look to for guidance when the issue comes up in their courts.

These precedents for insider trading were set in the 1930s. To put that into context, in the 1930s radios were just coming onto the air, there were no televisions and Henry Ford had just released the model T into the masses.

It was into this environment that the precedent for Insider Trading was put into effect.

Fast forward 80 years. Today not only do we have televisions, we have cars that have computers built in. It even passes through and around our bodies on its way to the next wireless network. A millisecond of time can spell the difference between a million dollar paycheck, and bankruptcy. How can rules that were put into place in the 1930s keep up with this exchange? We can barely keep up ourselves!

Let’s look at a theoretical situation:

Two people are exchanging information about their company, information that is not publicly accessible. Now say a hacker comes along and steals that information they are exchanging in confidence.

How he steals it really isn’t the issue, but let’s assume it’s using a technology that wasn’t around in the 1930s when the precedents for Insider Trading were set in Canada.

Then that hacker shares that stolen information with the community at large.

Now, if one of the people in the community sees that information and acts on it, either through buying or selling his own stocks, what happens?

Is he guilty of insider trading?

We asked this question to our community here at P4Capital, who address these concerns everyday, and these were some of the answers we got.

Jeremy Paczuski: I would think that the person is guilty of insider trading if he knew it was stolen information

Devon Alltree: “Is there a technology that is available to find out and explain where people are getting this information from? How could it be proved? On the information release side the rules on what constitutes market information versus insider information is unclear, there will have to be a defined amount of latency built into that process so that it is fair for everyone.”

Jeremy Paczuski: What constitutes insider information? Say someone who runs Hedge Funds flies out to look at something as a third party. He then sees how that thing operates and makes decisions accordingly. Isn’t that essentially Insider Trading? And what if he tweets about what he sees and someone acts on that information? The laws need to be updated to reflect that.

Archana Ravinder: It all comes down to ‘is my tech better than your tech’ right now. The FBI had been wire-tapping companies to find out where all the information and Data is coming from as they try to get a handle on this. You just can’t control where information is coming from or going now-a-days

Jim Carlson: What about Analytics? If your analytics rely on insider trading at all, are you guilty of it? If you ask me, with all this technology every company out there is participating in ‘Insider Trading’ to some extent. It’s only the companies without the advanced technologies that are getting caught.

What do you think?

Join the conversation! Tweet your responses to @planet4it or comment below in the comment section! The best answers will be featured on our Website!

Capital markets riding the cutting edge of the digital revolution

Planet4IT has been a successful IT staffing agency for 15 years. Recently we started to notice that the ever-changing technology landscape has spawned a subset of talented individuals who don’t fit perfectly into the traditional IT world. P4Capital is our response.

It’s a division aimed at people who specialize at the point where capital markets and wealth management intersect with technology.

Data is where all of these specialists interact, create, and work. Think of data as the meeting point of Digital and Capital.

In 1964, Marshall McLuhan coined the term global village.

The new electronic independence re-creates the world in the image of a global village.” — Marshall McLuhan

50 years later we are finally arriving at the point where it’s becoming a reality. It is technology that is enabling this, but if you stop and ask yourself why are we pursuing all these technological advances you will inevitably come to the conclusion that commerce is the driving force behind it.

Commercial society has always been the hallmark of North America, and with the fall of communism and the rise of democracy the rest of the world is pushing commercialism to a whole new level.

There is perhaps no better example of commerce than the traders of Capital around the world.

The major stock exchanges see more volume now than ever before, and those who can find advantages in investment can turn very serious profits.

Big data has provided those who can effectively understand it an advantage that rivals the speculation of films like Limitless.

I see every scenario, I see 50 scenarios, that’s what it does Carl – it puts me 50 moves ahead of you.

With big data and good analytics come many advantages in the capital markets trading game:

The first is speed. Real time databases such as Hadoop allow for information to be processed at a rate unprecedented in human history. We’re talking millions of information indices being turned into relevant and useful information in nanoseconds.
The second is depth. Algorithmic programmers now have access to a huge volume of data they can sift through and collect relevant information from. This has allowed traders to build significantly more accurate predictive models. Now we are living in a world where data processing gives competitive advantage.
Thirdly and lastly for this post, is sales. The world of commerce doesn’t exist without the private funding of people who are willing to put their money in other people’s hands. The ability to maximize the amount entrusted is often an overlooked component of the trading game. Sales teams and traders work side by side in banks around the world. Big data analytics have given those sales teams ammunition to maximize their investment by building out customer profiles that predict who they should be contacting on any given day.

It’s easy to get distracted by the bright lights of the Digital world, but the reality is commerce is one of the biggest reasons these technological advances are useful to society.

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Guest Blogger: Andrew

Andrew is one of the newest members of Planet4IT, so he brings with him a fresh new perspective.

With one eye on the job market and the other on the IT world, he’s the man to go to for information on how the latest advancements in Data, Digital Marketing and Social Media are effecting business.

Andrew encourages you to reach out to him through not only telephone or email, but LinkedIn and Twitter as well