WELCOME
…to the 28th edition of House. In the last six months, we counted six new MD hires in Financial Crime Prevention within the investment banks. As this rush for senior hires appears to have ended, we are starting to see an increased appetite for excellent VPs and AVPs, where those with top academic credentials and longevity of service are viewed more favourably.
In the last month, we have also seen a lot of discussion around outsourcing, the move to nearshoring and automation and what’s working.
Finally, we are pleased to announce the launch of ComplianceJobsBoard.com.
Outsourcing - is it working?
The big push to outsource compliance departments to low-cost environments such as India, the Philippines and Malaysia has continued throughout 2017, but is it working? The talent pool has certainly grown in these locations, but so has the cost. India especially has seen a sharp rise in the cost of doing business, with wages increasing on average by over 40% for compliance officers. Security breaches are also common, and with incoming global data protection legislation, can firms continue to outsource their financial crime and compliance functions?
Although we have started to see a slowdown in outsourcing to ultra low-cost locations as firms look to near-shore - HSBC and Deutsche Bank have huge operations in Birmingham (UK), Goldman Sachs in Salt Lake City and Citibank in Belfast - the dominance of the Indian IT outsourcing industry will likely continue. The challenge for these companies will be to cross-train their staff and help develop an element of autonomy in response to requests while maintaining quality rather than the formulaic approach required in the first iteration of the process. As the local talent pool expands and benefits from client-led training programmes, the goal of quality becomes more achievable but inevitably the cost will go up.
Academics and long service are in vogue!
The regulatory population in investment banks globally saw exponential growth following the financial crisis and tens of thousands of positions were created to perform roles that didn’t exist prior to 2007. It could be argued that we have reached the zenith of regulatory hiring and the size of teams will not get bigger within most investment banks.
The paradox we are facing, therefore, is why then are we so busy at Arion House? Especially at the Vice President level? The answer according to our clients is the search for quality. Three years ago, the top tier investment banks were bidding upwards of 50% to acquire talent and we were seeing people move every two years, the focus for the next few years is in finding the highest quality candidates.
There is now a large pool of compliance officers to choose from, and clients are repeatedly saying they want to see the longevity of service; no more than two jobs for a VP or three for a Director. Most interestingly, clients are focusing more heavily on academic background. They want to see that the people they hire went to a top university, have relevant post-graduate education and have shown they are committed and continually looking to improve themselves. Whilst the job hoppers thrived in the early days of compliance, it seems now is the time to cash in if you have been loyal and studied hard. Investment banks are tracking talent and starting to pipeline exceptional compliance officers.
In conclusion, we do think compliance and financial crime departments will get smaller in the next 18 months, some by perhaps by as much as 20% based on feedback from our clients. However, we do anticipate that exceptional talent with clean CVs and excellent academics will still get the top positions.
ComplianceJobsBoard.com
We are pleased to announce the launch of ComplianceJobsBoard.com, our portal. This is a one-stop shop for the informed compliance professional to access the latest moves and promotions, key insights on the latest hiring trends and relevant news from our tailored aggregator. You can also search for, or advertise roles within the compliance market.
For a limited time, we are offering House subscribers the opportunity to sign up or advertise their roles for free. Please reach out to Kassia Mei on kmei@arionhouse.com for more information.