House Issue 46 - March 2019

Welcome issue 46 of House! and the hiring continues across Asia Pacific. We are seeing a particular warming of activity at the mid management/VP level as bonuses are paid at several European Houses last week. Big global moves this month include current global CCO Lara Warner becoming the Chief Risk Officer for Credit Suisse globally and she is replaced by Lydie Hudson, who interestingly moves internally from the business where she was COO for Global Markets. Alain Bruneau has been announced as Natixis’s Head of Compliance in Paris, he too is moving from a senior business role.

Nick Kee is relocating to New York as the Global Head of ISG Compliance with Morgan Stanley, his successor in APAC hasn’t been announced yet. Aveline San has been confirmed as the new APAC Head of Compliance for Citibank, continuing the trend of external MD hiring seeing a revival in Banking.

In the Corporate Sector ZTE’s Deputy Chief Compliance Officer and Chief Export Compliance Officer, Matt Bell has joined FTI Consulting who continue their rapid expansion across the globe into financial crime prevention consulting. Jay Jorgensen meanwhile, formerly global Chief Compliance Officer at Walmart has joined Coupang in Korea as their General Counsel and Chief Compliance Officer. A fascinating move and one suggesting Asian Corporates are boosting their control functions so as not to be the next Huawei or ZTE!

Merging Compliance and AML Advisory Functions?

We have spoken with two major banking groups this month who have suggested major changes coming to compliance and financial crime departments. One way of cutting costs has been the suggestion that some advisory functions merge. Do you need to separate people to advise on AML and compliance for wealth management? When undertaking testing, do you need separate teams for compliance and AML?

There is some logic in this approach and it seems that the compliance officer 2.0 will need to wear many hats as department silos will be broken down. It does seem strange though, as having spent the last two years regularly commenting on how compliance and financial crime have gradually separated and become stand alone, they are now considering merging again. I’m assuming the same strategy consulting firm that convinced several banking groups to merge legal and compliance departments 6 years ago (with disastrous consequences) have rolled their best salesperson out again?

Whatever happens, we will see lots of change, promotions, dissatisfaction, projects and consequently hiring in the sector.

Virtual Banks and Peer to Peer Lenders, will we see a hiring boom?

Hong Kong finally announced the granting of 3 licenses to Virtual Banks this week, in order to increase competition and stimulate a digital revolution in Hong Kong. I am normally a positive person, but the fact that two of these licenses were given to offshoots of Standard Chartered and Bank of China, already top 5 retail banks in Hong Kong doesn't fill me with great enthusiasm that the existing hegemony will see their feathers ruffled to any great extent! The opening up of the virtual banking market in London some 4 years ago gave rise to now household names such as Revolut, Monzo, Starling and Tandem. Peer to Peer lending firms also emerged, such as Funding Circle, who provided some much needed liquidity to SMEs.

The disruption of the banking sector also gave rise to a new sector for regulatory professionals to explore and gave some much needed boost to both the banking sector and to the job options for regulatory professionals!

I can’t see this happening in Hong Kong, most of the regulatory positions at these so called ‘challenger’ banks are going to existing employees of Standard Chartered and Bank of China which is a real shame, and a missed opportunity by the HKMA to show that Hong Kong is ready to push the monopolies to up their game!

Equity Compliance Officers are in demand in Hong Kong!!

It seems like they are always in demand, however with the opening up of the equity markets in China we are seeing a real demand for traditional trading floor compliance officers. With the news that 11 of the Hong Kong Citigroup Equity Trading team either fired or suspended this week for compliance violations (a nice one for Aveline to deal with on day 1...), we only anticipate that equity trading teams will look to hire more people!

In Hong Kong alone, Deutsche Bank, Citibank, UBS, JP Morgan, Goldman Sachs all hired new Heads of Equity Compliance last year and most of the larger players made significant additions at a more junior level. Added to this pressure is the growth of macro hedge funds and high frequency trading firms and we are seeing a real war for talent amongst equity compliance officers.