In my last blog ( I tried to explain the lengthy process that the Investment Banking world goes through to get a new project off the gorund, I covered many of the preliminaries and regulatory issues that become hurdles and obstacles all to be overcome. I got so many positive comments and feedback(and tips). However the big thing to come from the blog feedback was that I had barely scratched the surface in relation to just how much goes on in the banking world. Today I want to expand on the story and process and bring you a look at how the next phase works in some institutions. While I can't say this is true of every Bank its certainly true of the investment banks I have worked at.

And so we return to Raven Bank, they have now finally greenlighted the project to onboard the use of crypto currencies in house and have looked at the market place and settled on the product they WANT to use. Funding is in place(for now - we will return here later) we have senior management buy in and the risk and legal teams have signed off, all thats left to do is implement the software and flip the switch right? WRONG. This is a new project a whole new venture and foray into unchartered territory for this bank, we haven't used crypto before(who has) so we need to get a team together who can make this happen.

Anyone who has worked in an investment bank, and more so done any form of recruiting in same will be able to testify to the following, don't take my word for it.

In theory recruiting a team to a new project should be easy for the banks, they have very deep pockets and can pretty much afford to buy whoever they want from the market place. A prime example of this attitude can be seen in Morgan Stanley a few years back, MS were very unusual or at least were at the time, in that they were as much a software house as they were an investment bank. The Majority of big houses do tend to write the majority of their code, this is particularly true of their trading systems as they all want to have the advantage over the competition. MS were and maybe still are a big player in this space. Anyway, MS were going big on the use of C++ as the priamary language for their trading applications, most banks go with either C++ or Java. Due to the planned expansion in the usage of C++ MS did something a little strange. They recruited the inventor of C++ Bjarne Stroustrup, they simply made him a managing director and gave him all the perks that go with the title. While I can't confirm if he is still there this was certainly true when I worked at MS. I added this story to highlight the very simple fact that

  • BANKS WILL ALWAYS GET WHAT THEY WANT - money is never a consideration*

paying a salary of $200K a year or $400k a year its all the same to them, you see banks generalize their staff and salaries into brackets. As an example my current role is charged back at around $250k a year, I don't earn anywhere near that figure but thats what my role is deemed to cost and everyone who has the same level or role as me, regardless of where they are in the world will be charged back at this rate.

Now I have given a bit of background lets look at what goes on during the process to recruit staff into an investment bank.

First and foremost the project lead is going to have conversations to ascertain the size of the team that will be required to implement and then support the new product. In most circumstances the support roles take a back seat at this stage and won't be recruited till further down the line, for the purposes of this blog I will bundle the hiring process up and we will look at what goes into recruiting a single person to the team. The lead has decided and agreed that he needs 10 Developers for the CTB(Change the bank - Development)team and 6 people for the RTB(Run the bank - Support)team, the RTB team are going to need to be a follow the sun team so we need to recruit into our 3 primary regions(US, APAC, EMEA). There will also be a L1 team who manage the day to day issues leaving the core L2 team to do complex support and handle and manage the release cycles coming down from the L3 team (Developers). As I have always worked on the L2 support side of things I shall speak from that perspective.

Generally speaking the banks don't keep a bunch of spare staff ready and waiting in a stock cupboard, for a new project they are going to have to go to Market. They will in the first instance advertise the role internally(every bank has an internal job board and its always got 100's of open jobs). Now to comply with the law in certain countires they MUST also advertise the role externally to the wider market.
When candidates apply for a role their CV/Resume will go to the central recruiting/HR team who manage the relationship with external recruitment consultants and agencies. This team will often start the process of cherry picking through the CV's and only sending the most relevant ones forward to the hiring manager. I should state that even for relatively low level IT jobs that I have recruited for in the past I have had normally around 30-40 CV's sent to me. The recuritment manager now needs to go through these and figure out who he wants to Interview. I personally would slim the list down to around 10 CV's. Now an important factor to remember at this stage is that before an offer is made and dependant on the role in question the candidate will go through between 5-9 interviews. For this reason I personally always start with a telephone interview. So now we have done our round of telephone interviews and narrowed our list down to 6 people. They will all need to come in for a face to face interview with the hiring manager. Once that stage is complete the hiring manager is going to want to have someone double check him, so he will most likely get the remaining candidates in for another interview with a couple of members of the team. Personally I always got a couple of guys who report to me to manage this interview because I want to see if there is a personality fit. Anyone who makes it beyond this stage is now considered a very real possibility for recruitment, however there needs to be more interviews and these will vary from bank to bank, but would generally include one with the project sponsor, one with a member of the business and most likely one with the development lead for the project.
The final stage interview would be held with a HR representative and this is the first time salary and package would be discussed.

Now a formal offer will be sent out to the successful candidate. Bare in mind that the above interview flow has already taken us around 2-3 months to complete, we have seen hundreds of CV's and held dozens and dozens of interviews across different regions and timezones(thank God for Video Conference facilities). Given the amount of money that has been invested in the process to get to this single candidate stage now is the time for the candidate to either accept the offer or Barter for a better deal. If you are ever in this position, now is the time to push for more money and remember that due to the banding process for roles, there is always scope to squeeze a little more out.

Now I should add at this stage that since 2008 the banks have changed a lot about how they work and how risk averse they have become due to rules and regulations that have been put in place, so there is often a very very real chance that during the interview process the hiring manager will hear these fateful words "A Headcount freeze has been implmented and will be in place for 2 months" This effectively slams the breaks on the whole process. Sure you can continue to interview and make your selection but until the head count freeze is lifted there is not going to be any sort of HR interview or offer made. Its not unusual to have 2-3 of these freezes happen in a given year.
So now lets assume that we have overcome all of the above, we only had a single 1 month headcount freeze, we have the budget and our candidate has agreed to accept the role. Now we can get things moving right? Wrong again.

You see anyone who has been in a banking environment for a time and who has been promoted even to a very low level officer role (AD/VP) will have a 3 month notice period they have to work. Quite often companies when releasing a staff member will allow them to leave before their notice is finished, but will for the most part insist on what is called Garden leave. Effectively they don't want this person to stay in their bank because they might steal ideas or even customers, at the same time they don't want them rushing to a new bank and taking any current knowledge they may have. So what the banks do is basically pay the notice period and have the person go and sit around at home watching Daytime TV for whatever their notice period is. Sometimes thay actually make the candidate work out their notice but that is fairly rare.

So our guy has accepted our offer to join our bank, he has handed in his notice and been placed on Garden Leave which means we cannot have him start for at least the remainder of his notice period. What we can now do is complete another outstanding process, The dreaded Background check. While 90% of these checks are really little more than a formality and most people get clearance back within 2-4 weeks, often and this has happened to me; the checks which are carried out by an external company runs into issues. One of the most common problems is periods of non work on a CV. You guys who take a years sabatical can really slow this process down. The company doing the check want proof of what you have been doing for the last X years, most often and definitely for an officer level hire they are going to be looking at the last 5 -10 years. Simply stating you took a year off work to travel the world isn't going to cut it, as far as these guys are concerned there is a 12 month period which is unaccounted for. What they want to see is a CV that has you working non-stop back to back jobs from the moment you left school. Any divergance from this will delay the check process. I have experienced this delay and the background check took over 2 months to complete, because a previous job I held had made me redundant several years before an put me on 3 months garden leave. I had 3 months on my CV which could not be accounted for, I ended up having almost daily telephone calls with the checking company and the hiring manager until we finally got agreement that short of me sending pictures of myself sitting in the Garden, they would have to accept the missing three months.

I shall recount from personal experience my last job move, where I moved from Morgan Stanley to UBS. I was working within trading support at MS, running a global team supporting the primary FX trading platform called Matrix. I decided I wanted to move on after being there for 8 years and some changes to my personal circumstances. I gave my three months notice, I was made to work out my notice as well, no sitting around at home for me. After 1 month I started to look at the market place and attended lots of interviews without much success. Around 1 month before I was due to leave I was approached by UBS directly to go and work on another FX trading application, this one was called NEO. if you see similarities in the app names its because they exist, both platforms were designed by the same guy, and the same group of people worked on both, so for me it was like being invited to come work on version 2.0. I jumped at the chance as it was a better role for me, and even paid a little more money. Given the similarities in the platforms, and commonality in underlying tech I was also a very good fit. My Name had been given to the hiring manager by one of the Business Analysts working on the project who had also worked with me at MS.
From the sounds of things this should have been the easiset transition in history.

it took a further 6 months before I started in the role, all this time I was stuck at home with no regular wage coming in. I got regular updates from the hiring manager so I knew the job was mine however there were hiring freezes in place. I eventually started the interview process proper and had to have 6 interviews all with people I knew and had worked with before, but the rules in banks apply to everyone so we had to go through the formal process and ensure all the T's were crossed and the i's dotted.

Now take the above and apply this to hiring a large new global team of not just support staff , but developers and business analysts and project managers. In reality putting a team together in a bank for a new cutting edge project is going to take around 12 months possibly longer. Now imagine doing this but having the requirement to get people who have cryptography experience and blockchain knowledge.

I am sure I have missed plenty out of this blog but I hope it helps to build up a picture of why things move so slowly in the world of finance. Of course sometimes things can get turbo charged and thats when first mover advantage becomes important and I will look at that and how banks adapt in those circumstances in a later post.