Compliance Creates Job Opportunities
Jinfo Blog

By Andrew Lucas

Abstract

Andrew Lucas, the series producer for the FreePint Topic Series: Compliance in Context, looks at the rapid expansion in the compliance function within banks and considers the implications for careers and the importance of keeping up to date with developments in the sector.

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One of the fastest growing areas within financial services is compliance and this is reflected in the burgeoning career opportunities offered by the sector.

Career Opportunities in Compliance

It was reported in The Times on the 25 September 2013 [log in required] that HSBC has announced that it is recruiting 3,000 new compliance staff. This will bring the total number of compliance staff at HSBC to 5,000 or 2% of the total workforce. The move follows fines of $1.9 billion imposed on the bank for failing to prevent involvement by its staff in facilitating money laundering for drug gangs and terrorists.

JP Morgan is also recruiting another 3,000 compliance staff and, according to the Daily Telegraph, it is spending $1 billion a year on compliance. The bank has recently been fined $920 million in the US and the UK over its lack of supervision of the “London Whale” trades which led to losses of $6.2 billion.

Meanwhile Barclays, which was fined $451 million over its involvement in LIBOR manipulation, has increased its compliance staff from 1,700 to 2,000.

Barclays, like many other banks, has also recruited a high level head of compliance. Sir Hector Sants, the former head of the UK Financial Services Authority, joined the bank at the start of the year and has since hired a whole series of other senior compliance managers. Standard Charted, fined $667 million for involvement in sanctions breaking, has just hired a former US Federal prosecutor and a former UK regulator for its compliance team.

Compliance Connects to the CEO

This spotlight on compliance has also been accompanied by changes in the reporting role of the compliance function. Increasingly it is being taken out of legal departments, where it is feared there may be a conflict of interest, and instead given a direct reporting line in to the CEO. JP Morgan has recently split out compliance into a separate group, something that both HSBC and Barclays have done in recent years. Goldman Sachs made the move as long ago as 2004.

What all this means for individual practitioners is that compliance is no longer being seen as a backwater, there are a rapidly growing number of opportunities for career progression and higher salaries.

Andy Haldane, executive director for financial stability at the Bank of England, recently stated that dealing with the new capital regulations alone will generate 70,000 new financial jobs in Europe.

There is a shortage of qualified staff which is pushing up salaries. The 2013 Salary Guide [PDF] from Robert Half, the financial recruitment specialists, found that UK salaries for compliance managers has risen 7.1% this year to an average of £85,000 ($127,500).

FreePint Keeps You Current on Compliance Issues

For information specialists, supporting the compliance function will continue to grow in importance and will be vital to keep up with developments in the sector. The FreePint Topic Series: Compliance in Context provides practical insights into some of the key themes in compliance as well as in depth reviews of industry leading products.

This week Victoria Meyer has looked at how you can support the Anti-Money Laundering compliance screening process. The article identifies the key requirements for an effective screening system: comprehensive intelligence data, appropriate search tools and decision support functionality. Sophie Alexander gave an overview of Bridger Insight™ XG, a risk product from LexisNexis which complements Lexis Diligence and helps companies manage risk around Anti-Money Laundering, Politically Exposed Persons (PEP), watchlist screening and bribery & corruption.

Next week Victoria will be taking a look at some of the issues arising from linguistic identity matching. Coming up there will also be an overview on the regulatory environment in key jurisdictions by Victoria Brocklehurst and Matthew Baker, who are both lawyers in for Berwin Leighton Paisner’s Financial Services team.

Editor's Note: Compliance in Context

This article is part of the FreePint Topic Series: Compliance in Context, which runs from September to October 2013. Register your interest, and you'll get pre-notification of when registration opens for any webinars in this series, as well as a free copy of the FreePint Report: Buyer's Guide on Regulatory Compliance when we publish in October.

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