Is your banking job dying or thriving? In 2025 will you be sitting in an ‘outplacement’ office trying to work out your transferable skills or aspiring to a corner office (presuming that they haven’t been replaced by hot desks)?
This depends which product area you work in. Today’s report from banking intelligence firm Coalition suggests there are things you might want to avoid at all costs, and other business areas which are steady enough to see you through.
Beware flow voice trading, particularly in cash equities or flow credit
Don’t go here. As the charts below show, voice trading revenues and therefore jobs are shriveling fast. In the past three years alone, voice trading revenues have fallen by nearly a quarter. Nor is redemption around the corner: as JPMorgan’s investor day made very clear yesterday, electronic trading is only expected to grow. The decline in flow voice trading has been accompanied by big declines in credit trading revenues (down 16% between 2015 and 2018) and cash equities trading revenues (down 19%). You almost certainly do not want to be a voice trader in either of these product areas now. Avoid.
Choose financing or futures and options
By comparison, there have been two consistent growth areas in the markets divisions of investment banks since 2015: financing and futures and options.
Financing as defined by Coalition is broad-based and includes a wide array of tailored solutions used to help clients raise money without resorting to a standard loan or the issuance of debt and equity. It includes securitization, collateralized loan obligations, single stock financing, strategic equity transactions, financing based on fund derivatives, and G10 and emerging markets structured credit financing. The breadth of the financing bucket is one reason for its growth (and not all areas have grow – securization declined last year). So too is rising demand for complex and non-linear solutions from clients seeking to raise money. Financing revenues are up 18% in three years.
If you’re not going to work in financing, you might want to work in futures and options trading. Coalition says F&O revenues rose 17% last year and that they’re up 13% since 2015. Growth here was particularly strong in the Americas last year, and long-term growth is being driven by volatility and increased demand for hedging against market fluctuations.
There’s always the investment banking division (IBD)
Finally, as the charts below reflect – you might want to give up working in the securities business altogether and aim for an investment banking division (IBD) job instead. Not only are revenues far more stable here, but headcount reductions have been far more modest and margins have held up. Why work in equity flow sales (where margins are down 30% since 2018) when you could have a cushy M&A job instead?
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