Autumn Compliance Market Update
Contributed by Jessica Wilson on 24 October 2014
Continued regulatory development and change is fuelling high demand where there remains a shortage of supply. In 2013 the highest area of perceived risk amongst banks was Data privacy. However in 2014 this has changed into Industry Specific Regulation and Bribery/Corruption. With the recent regulatory developments such as EMIR and MiFID 2 firms are now more than ever ensuring departments abide by rules despite the increase in the cost of compliance. Specifically within AML, 84% of senior managers believe the pace of regulatory developments continues to create a significant challenge to operations.
Growth in Other Sectors
As well as Financial Crime, areas expected to grow are Regulatory Change and Monitoring & Testing. Conduct Risk demand continues to grow, both in investment banking and retail banking. With organisations eager to enhance both customer trust and market trust, considering and developing the Conduct Risk framework will be a key objective for firms in the future.
Advisory and Markets compliance has also been growing rapidly. There remains a demand for strong, experienced professionals who can have an impact on the trading floor.
The Rise of Financial Crime Compliance
In 2014, 2,157 AML positions have been created. This is 54% more than in 2013. Furthermore this year has seen rates and salaries within this area increase by 14%. Some large institutions had over 100 AML contractors employed at one time.
With the fines to HSBC in 2012 and more recently the $300 million penalty imposed on Standard Chartered, and the $8.9 billion fine for BNP, these areas are more valued than ever. Barclays have developed a “Compliance Career Academy”. This will help to educate over 2,000 employees, from new hires to senior managers, in all areas of Financial Crime.
What the Future Holds for Compliance
Compliance & Risk Roles now make up 4 in 10 city hires within investment banking. 97% of senior executives now say it is very hard to find skilled employees. Compliance being the area that is most difficult to fill.
When asked which compliance function is likely to be prioritized over the next 12 months, more than 6 in 10 companies replied that overall compliance strategy would be prioritized highly. As well as this, half the companies said that monitoring and reporting, and training and communication based functions would receive priority as companies adapt to industry regulation.