12 January 2018

Morning Coffee: The best finance jobs of the last decade will soon become the worst. The weirdest boss in banking

Not long after President Obama signed the Dodd-Frank Act into law in 2010, banks have been doing a lot of regulatory compliance hiring and it hasn’t really let up much. However, a lot of these jobs now look to be at risk.

For example, Credit Suisse wants to use automation and blockchain to cut a lot of its compliance and control staff, and this kind of technology could spell the end of regulatory reporting roles.

Machine-executable regulation is coming, according to the Wall Street Journal. A world where algorithms automatically incorporate regulations into companies’ policies is coming soon, allowing banks to more quickly and more accurately conform to regulatory changes, better deploy their human compliance personnel and give regulators immediate visibility into companies’ compliance efforts.

The breakthrough in creating algorithms embedded with regulations provides momentum to reducing the amount of human oversight needed to interpret and implement rules. The days of regulators issuing rules, companies taking months to figure out what they mean and then reconfiguring their systems to conform to the new rules are numbered.

“What we are trying to address…is a way of expressing the requirements in a form that could be interpreted by machine without human or expert interpretation,” said Nick Cook, head of regulatory technology and advanced analytics at the U.K. Financial Conduct Authority.

The goal is to develop scalable software that can ask, “On this type of regulation, we have these attributes, what actions do we need to undertake?” he said. “Then it gets an answer: ‘If you have these attributes, these are the actions that are required.’ All of that is machine-executable.”

While machine-executable regulation is still a couple of years away from mass adoption, the bottom line is that the salad days for banking compliance professionals are likely coming to an end sooner rather than later.

Separately, a trader argued with her boss when he used her online chat account to do deals while she was at lunch and was promptly fired. Now she is suing her former employer.

Ekaterina Korshunova says she was unfairly dismissed by Eiger Securities after she criticized her boss, managing director Richard Ashton, for using her computer to make trades in her name when she was out, according to Bloomberg.

Korshunova repeatedly found Ashton at her computer messaging traders in chat rooms and pretending to be her. Even after she told him traders were complaining about his actions and she changed her password, Ashton persisted. He even asked Eiger’s computer-support workers to unblock Korshunova’s screen when she changed her details.

Eiger Securities claimed that it fired Korshunova for “gross misconduct,” saying she shouldn’t have changed her password to her Bloomberg terminal or switched off her computer screen after learning she was suspended. They also complained of her “failure to follow instructions and poor performance” after the disagreement.

Korshunova alleges that Ashton punished her for complaining and changing her password by giving away her clients to other brokers in the company.

Whether he’s a creep or not, it’s always risky to butt heads with your boss, and now Kirshunova’s fate is in the court’s hands.

Meanwhile:

Bankers fear that they will get “Amazon-ed” as new technologies disrupt the traditional financial services industry. (FT)

Morgan Stanley announced a new class of 153 new managing directors. (Business Insider)

Private equity giant Carlyle Group, which manages $174bn in assets, announced its 2018 crop of new partners, managing directors and principals. (Business Insider)

Jeff Miller, the co-head of U.S. trading at Point72 Asset Management, has left the firm after more than a decade working for Steve Cohen just as the latter’s new hedge fund is expected to start next month with about $3bn in outside money. (Bloomberg)

Edward Chandler, who up until recently was the chairman of the corporate finance division at Deutsche Bank, has launched boutique advisory firm Namier Capital Partners with two other veteran bankers. (Financial News)

$10bn unicorn Dropbox hired Goldman Sachs and J.P. Morgan to underwrite its initial public offering. (New York Times)

Poaching the former head of European M&A at Barclays is a statement that BNP Paribas has serious aspirations for its U.K. business. (Global Capital)

At first glance, last month’s 52% decline in the number of job openings in London’s financial industry looks dramatic, and Brexit’s an easy bogeyman to blame, but the root cause isn’t so clear. (Bloomberg)

However, leaving the European Union without a deal in 2019 could cost Britain almost half a million jobs. (Bloomberg)

PwC got a loud slap on the wrist. (WSJ)

UBS is attempting to find a way to profit from promoting LGBT rights. (Bloomberg)

Women in finance have been grabbed, humiliated, and propositioned but have kept quiet because of the industry’s culture. (Bloomberg)

U.S. executives don’t have to work on Wall Street or in Silicon Valley to get rich. In fact, among bosses at public companies, those in consumer-staples businesses are the wealthiest. (Bloomberg)