As UK banks and financial services brace themselves for the impact of Brexit, Anne Murphy Head of Odgers Berndtson's UK Financial Services Practice, asks whether the real threat to City jobs might actually be less about politics and more driven by technology.

Banks are being forced to take decisions and make Brexit contingency plans, yet we really haven’t seen any significant impact in hiring at the senior level in banking and financial services. This is other than the need to have both non-executive and executive representation in their chosen post-Brexit hub.

New York, Hong Kong or Singapore?

Whilst we haven’t yet seen any real indications that financial services firms are looking to move parts of their business from London, even if they do, I don’t see many moving to Europe. The more likely choices are New York, Hong Kong or Singapore. All are global financial centers already and cities with well-developed infrastructure and regulatory environments.

In many cases, the roles required in continental Europe post-Brexit are more likely to be additional headcount, as opposed to jobs moving location, influenced by whatever conditions are finally set by central banks and regulators.

Small numbers of trading and risk and control roles may need to move.

The financial services industry is awaiting clarity on a number of issues. These include how current back-to back-trading practices will work, the passporting arrangements across the EEA, home/host regulation, complications around derivatives and insurance contracts, and, of course, the transition stage.

A less specific, but very real issue, is how attractive a Brexited Britain will look to EU talent. Anecdotally, we have heard it has become harder to attract people at more junior levels to London from continental Europe.

Automation’s looming threat

Crash-out or smooth transition, we believe the onward march of digital automation is a bigger threat to the number of jobs in the City than Brexit. Figures from PwC and the Bank of England bear this out. Whilst the Bank has estimated that 75,000 jobs could be lost due to Brexit by 2020, PwC anticipates the sector losing 350,000 from automation and digitization by 2030.

We suspect technology and automation will have a far greater impact on employee numbers across financial services in the UK than Brexit.

This transformation also promises a huge opportunity for London, which is already the European leader in FinTech, and ready to embrace the tide of the tech revolution. We’re currently partnering with City UK on a research project to understand more clearly what the implications could be for roles across financial and related professional services and the impact on current and future leadership talent.

Getting things right in technology could position London to hold onto its crown as Europe’s global financial center.

These insights by Anne Murphy, Head of Odgers Berndtson's UK Financial Services Practice, are part of ‘Brexit, Business Leaders and Investment’, a major report from Odgers Berndtson. As leaders in global executive search, across multiple functions and sectors, we have a unique perspective that comes from being close to top executives in almost 30 countries.

Download the full report

To explore more of our perspectives on Brexit, click below:

Anne Murphy

Anne Murphy is Head of Odgers Berndtson's UK Financial Services practice in which she also leads the risk, regulatory and compliance team. She identifies risk specialists for Boards and executive c...

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