Are you worried about your job being outsourced?

RIF bubble: Who's firing now?
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Link related: Morning Coffee: Goldman Sachs and Morgan Stanley bankers on H1B visas are being outsourced. European traders beg for bigger bonuses

“Their numbers are likely to grow. JPMorgan, for example, wants to shift half of its junior investment bankers to lower-cost locations like India and Argentina.”

This reminds me of when there was a lot of scaremongering about slashing analyst classes due to AI a few years ago but obviously nothing serious came about because of that and nothing probably will.

This is a more tangible threat, however. It’s a very well-understood and well-done process to offshore labour.

My question is - is it something you’re specifically worried about?

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Real Quant analyst/dev jobs at investment banks (pricing and risk models for derivatives) in Europe have long been outsourced to the new frontier of cheap intellectual labour: the ex Warsaw Pact countries.

Here I am narrowing my focus on the sell-side core of the profession, which requires knowledge of stochastic calculus and probability measure theory, and fluency in concurrent modern C++. Quant jobs with no machine or deep learning involved.

Coming from a STEM academic background and trying to make the move into banking, realistically only positions in Prague, Warsaw or Budapest are available, at least in Europe.
Salaries are literally peanuts by Western standards. You’d make more money working as a lorry driver in Britain (although there too, the job market seems cornered by Poles…)
Maybe if freshly graduated one could try internships in London, but alas that’s not my case.

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Is this true for sales/trading generally, or for quant specifically?

Agreed on the lorry driver thing, though. To be honest, intellectual work is simply not rewarded in the occident anymore, at least not as much as it contributes. Every day I’m more and more tempted to just become a plumber… At least entrepreneurship is a feasible path there.

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Is this true for sales/trading generally, or for quant specifically?

Those roles are client-facing so fluency in English is needed, so I’d say they stay in London. ChatGPT seems to confirm:

Short answer: No — front-office Sales & Trading (S&T) roles in Europe have not been outsourced to Eastern Europe the way some quant, technology, and middle-office functions have been.
And the reason is exactly what you suspect: sales/trading requires real-time client interaction, regulatory proximity, and front-office English-native fluency that cannot be moved.

Below is the detailed explanation.

:white_check_mark: 1. What has been outsourced?

Large investment banks (JPM, GS, MS, Citi, BofA, Barclays, UBS) have indeed moved certain functions to:

  • Warsaw (Goldman Sachs, Citi)

  • Budapest (Morgan Stanley)

  • Kraków (UBS, HSBC)

  • Prague (less common, but some risk/IT functions)

But these roles are overwhelmingly:

Quantitative development (non-front office)

  • Model implementation

  • Risk libraries

  • Python/C++ frameworks

  • Data engineering

  • Pricing infrastructure support

Technology engineering

  • Infra, cloud, tooling

  • Trade processing tech

  • Data pipelines

Risk, reporting, and middle/back office

  • Market risk

  • Credit risk

  • Operations

  • Regulatory reporting

  • Compliance support

  • KYC

  • Finance / controllers

Some junior quant research, but not alpha-generating HFT or derivatives strategy.

These moves are driven by:

  • Lower labor costs

  • Very strong STEM talent in Poland/Czechia/Hungary

  • Time-zone alignment with London

  • EU regulatory compatibility

:cross_mark: 2. What has not been outsourced?

Front-office Sales and Trading for Europe (across FX, rates, credit, equities, derivatives) remains overwhelmingly located in:

  • London

  • Frankfurt

  • Paris

  • Amsterdam (smaller)

  • Milan/Madrid (regional sales)

Why?

A. Real-time client interaction

Banks make most of their S&T revenue from:

  • Market making

  • Flow trading

  • Block execution

  • Relationship-driven sales

  • Corporate & institutional clients

These require:

  • Instant communication with portfolio managers and hedge funds

  • Native-level English for London-based clients

  • Client dinners, conferences, on-site meetings

You cannot outsource that to Warsaw/Budapest because the buy-side is still primarily in London and New York.

B. Regulation requires traders to be on registered desks

Trading desks must be:

  • Registered with UK FCA, or

  • EU-regulated (e.g., BaFin in Frankfurt, AMF in Paris)

Warsaw/Budapest/Kraków offices do not hold trading licenses for most large banks.

Only a small number of EM local desks (e.g., PLN bonds or HUF FX swaps) are located locally, and those are small.

C. Market microstructure requires proximity to other traders

You need:

  • Real-time Bloomberg chat

  • Direct voice lines

  • Instant escalation to market risk

  • Co-location with quants, structurers, risk, legal

  • “On the floor” visibility

This is why most banks consolidated their trading floors in London Canary Wharf (and now partially Paris/Frankfurt after Brexit).

D. Language and cultural proximity

S&T still relies on subtle human communication:

  • Reading tone of voice

  • Negotiating block trades

  • Providing market color

  • Understanding London/NY client culture

  • Rapid decision-making in idiomatic English

Banks have no appetite to create “accent risk” or “communication friction” in a multi-billion-dollar flow business.

:red_exclamation_mark: 3. Exceptions (small but real)

There are very small front-office-adjacent groups in Eastern Europe, but they are not client-facing:

A. Execution support / trading assistants

  • Some banks have “delegated execution teams” for low-touch electronic flows.

  • These teams run pre-trade checks, exception handling, and analytics — not client negotiation.

B. Structured products documentation

  • Term sheets, onboarding, pricing runs

  • Not actual sales or trading

C. XR (execution research) / electronic trading quant support

  • Important but not directly client facing

D. Local EM desks

Small desks for local markets in:

  • PLN (Poland)

  • HUF (Hungary)

  • CZK (Czech Republic)

But these are niche, not the large global S&T business.

:speech_balloon: Conclusion

Sales & Trading is not being outsourced to Eastern Europe.

Because it:

  • requires front-office presence in London/Frankfurt/Paris

  • depends on real-time client relationships

  • is highly regulated

  • requires native-level English & fast communication

  • depends on co-located teams (sales + traders + quants + risk)

What gets moved east is:

  • engineering

  • quant dev

  • infrastructure

  • models

  • reporting

  • operations

But not the actual salespeople or traders.

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As Compliance at a European IB in the EU, I am currently not that worried that they would outsource my role, simply because they already outsourced so many people in the years before, that they are already running on the minimum they have to have locally in compliance so they have enough people to deal in the local language and regulatory knowledge with regulator and auditor.

But yeah occasionally I saw for example that when someone left the company in London and if the tasks were rather global and no need for specific presence in London, they outsourced them to Eastern Europe. But that nearly exclusively happens only on junior levels.

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This seems a lot to read. Have you outsourced your brain?

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why would I have “outsourced” my brain?

If someone were to open my skull and remove my brain, I’d probably die instantly. Any advantage you seem to imply I might get from relocating my brain to Prague or Budapest, is clearly not worth that particular downside.

So no, I did not outsource my brain because I am not insane

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