House Issue 40, August 2018

Welcome…

…to the 40th edition of House! and some fascinating moves have happened recently across the globe, with senior hires in the pharmaceutical sector, crypto and consulting. The big news is that investment banks are starting to hire compliance officers again! We have seen an uptick in demand from banks in both Asia and Europe to hire experienced compliance officers again. We have also seen a real push for near shoring in the UK and some interesting data on the hub of choice for compliance departments in the UK. Technology is also discussed in this month’s issue with Data still driving to be the word of 2018.

Too much technology is never a good thing
RegTech seems to have taken over the compliance airwaves in recent years, to the point where we are now learning that it can be difficult to separate the wood from the trees. If you ask most CCO’s or MLRO’s, one of the most frustrating parts of their day is the shear volume of calls they field from software vendors. A simple google search of the term, ‘compliance software’ throws up almost a full page of articles claiming to have the “top ten vendors of 2018”. The due diligence process involved in multi-million pound deals like the selection of GRC (Governance Risk and Compliance) software is basically a job in itself so it is not surprising that we are seeing more and more clients use senior contractors to come and run the rule over any proposed systems changes. While this does raise the risk of the working knowledge leaving the building, a project format guarantees a clear and concise report on the current state of play and unbiased evaluation of the best solution which can help guide the vendor when trying to adapt an off-the-shelf solution to the individualities of each institution.

Data Data Data (but not GDPR)
We have spoken at length about regulation in this area so we won’t beat that particular path again here. What we have seen recently however, is a sharp rise in the numbers of our clients looking to add data specialists to their ranks and not surprisingly Financial Crime has been high on the list of departments hiring. With a proliferation of technologies in the space all purporting to do a better job of the same task, the job of the MLRO has, in some senses, become much like a traditional mathematician - one of “proving the question”. By bringing in analytics experts to their Financial Crime business units, businesses can better capture, sort and disseminate findings from the data they are collecting, allowing for more accurate monitoring functions and provide a clearer picture of how effective initiatives have been towards their intended goal and the ability to visualise these metrics into digestible insight can be invaluable in driving cultural change.

Near Shoring Still Ongoing in UK
For almost a decade we have seen financial institutions search for savings by moving non-core business units away from major financial centres. Property costs are much higher in London than Birmingham or Manchester for instance, and the cost of living for employees is also more arduous. While the short-term pain of relocating management or rehiring in a new location can be high, in the long term the ‘indigenous’ professional population will grow and the cost of employment will fall. Historically it was support, operational and some finance functions moving but due to technological advance and ongoing cost pressures, we are seeing an increase in financial crime departments moving headcount to regional locations around the UK. We looked at approximately 20 retail banking institutions for this piece and only 8 count London as their primary UK location for compliance and financial crime headcount. Edinburgh is the second largest compliance and F/C community in the UK with Bristol, Belfast, Milton Keynes and Coventry all housing relevant functions. Arion House is currently work with one retail institution looking to create a regional team of 15 financial crime professionals; please do get in touch if you would be interested in discussing the insights gained.

House Issue 39, July 2018

Welcome

….to the 39th edition of House as we continue to see less hiring at an MD level in financial services, while middle management (AVP/VP) recruitment remains very buoyant.  The big move in financial services was the resignation of Philipe Vollot from Deutsche Bank to join Danske Bank in Copenhagen as their new Head of Compliance. At Wells Fargo in Hong Kong, Leeann Morentz takes on James Sayko’s financial crime risk management leadership role as James moves back to the states with the bank.

The corporate sector has continued to hire more people globally, most notably Scott Schools ending up at Uber! The extent to which compliance and regulation has permeated the corporate sector has really ramped up. It is one of our themes this month as we examine what the corporate compliance officer does, how it differs to their banking peers and if there is any movement between the sectors. We also look at Reg-tech this month, are financial services firms investing in it yet? And, are we seeing the rise of the technology compliance officer?

Corporate Compliance - What do they do? and where do we find them?

We completed three searches in the corporate compliance space last year and many of our financial services compliance contacts have asked us, “what do they do? Where is the market abuse? Insider trading? Conflicts?”

They are asking us not because they doubt the end for compliance in this sector, but rather because they’re interested if the move across can be made. From Goldman to Walmart? from Prudential to Uber? Can the move be made? The short answer: not yet…

The majority of the moves we are seeing into corporates are coming from the legal sector. Often a corporate hires their first compliance officer in a time of distress and it’s often someone with a litigation or dispute resolution background. A prime example is Scott Schools, an experienced litigator moving from the Department of Justice in the US. Jay Jorgensen, the Global Chief Compliance Officer for Walmart, was previously a partner in the litigation team at Sidley Austin LLP. 

The key skills clients looked for in the searches we conducted were:

• Compliance Framework - the ability to map rules to business units
• Ethics, the ability to create an ethics programme, implement it and gain buy in from the business
• Excellent knowledge of FCPA, UK Anti Bribery Act, GDPR and relevant global regulation.

The initial outlook appears bleak for those trying to transfer from the financial services sector, but many parallels can be made with the advent of compliance departments at financial services firms c2001. Then too, the first compliance officers came from a regulatory and legal background, often to deal with litigation. However, as compliance departments evolved and rapidly grew we saw a real rise in compliance officers coming from a variety of backgrounds.

As a result, while we don’t anticipate global compliance teams numbering in the thousands, we will see a more diverse work force and the growth of Fortune 500 and FTSE 100 firms compliance functions into the hundreds.

RegTech, RegTech, RegTech - The rise of the Chief Compliance Technology Officer…

The hedge funds Point 72 and Bridgewater have been quite vocal in their intentions to automate compliance and introduce AI. The large investment banks have all been talking about making big changes in their compliance departments, but have we actually seen them make this change yet? Citigroup have invested heavily in outsourcing compliance, it is known they have the goal of  offshoring all non-revenue producing personnel.

As costs are cut to compliance departments and we enter the era of BAU, what changes can be made by technology and who are making them? A simple google search of RegTech and Goldman Sachs, JP Morgan, UBS and Credit Suisse produced few results. What is the technology that compliance and financial crime compliance departments are investing in?

It is a difficult task to single out any specific solution, instead we should consider key processes that RegTech can address. Data aggregation, record keeping, analytics, document management and reporting are a few key areas in which RegTech could reap significant savings.

From a hiring standpoint, what we have seen are banks beginning to directly address the potential benefits of RegTech through the hiring of  ‘Compliance Technology Officers’… One APAC Chief Compliance Officer we spoke to recently described an internal move from technology as the ‘best hire they ever made’. There is still a lot of movement in this space, but we predict the role of the Compliance Technology Officer to take on more and more importance in the years to come and it’s imperative that Chief Compliance Officers upgrade.

House Issue 38, June 2018

Welcome

…to the latest edition of House and whilst the banks have started to slow down somewhat, we have seen pockets of recruitment across Asia Pacific, most notably in China and Australia where the regulatory rhetoric is at an all time high.  We have also seen a real rise in US and now UK law firms look to build their regulatory litigation teams in Hong Kong. Finally, as mentioned last month, the crypto community are all looking at their regulatory controls; unlike the US, no big moves yet that we are aware of, but we are expecting one soon!

China’s evolving regulatory environment and the resulting demand for professionals

China entered a “new era” following it’s 19th National Congress which has marked 2018 to be a year of change and reform. China’s highly fragmented regulatory framework has failed to keep up with the explosive economic growth and rapidly expanding and increasingly complicated financial markets. As a result, financial institutions such as Anbang can and are exploiting cracks in the fragmented regulatory environment which is posing mounting risks to China’s overall financial system. 

China has made further efforts to address this issue with a major reorganisation of it’s regulatory bodies. China’s banking and insurance regulators have been merged, and the head of this body, along with the head of the China Securities Regulatory Commission (CSRC) and the People’s Bank of China, will be governed by the special cabinet level Financial Stability & Development Committee (FSDC), dubbed the “super financial regulator”, which was set up last year.

Industries and companies have already begun to feel the effects of this tightening regulatory environment, with major change and new regulation coming to insurance, money market funds, financial holdings companies, shadow banking, asset management, data privacy and Pharma, just to name a few. Coupled on top of this is China’s willingness to open itself to the rest of the world, with caps on foreign ownership to be relaxed and eventually completely removed.

The resulting increase of investment in China and the enhanced regulation will only further the hiring need for regulatory professionals, which begs the question, does China have the candidate pool and calibre to match this demand?

Australia’s calling..

The recent Royal Commission findings on the conduct of the Australian retail and investment banking sector highlight a number of operational and ethical breaches who have resulted in huge fines and a drop in consumer confidence across the entire financial services industry. More damaging than the fiscal penalties is the loss of consumer confidence. 

In an effort to mitigate the bad blood the sector has initiated a large-scale hiring drive to enhance their assurance functions. At the forefront of this have been the Commonwealth bank of Australia who have announced they are increasing their compliance function by up to 100 heads this year alone, with the vast majority of these hires being in the AML and KYC functions. 

With the expectation of stricter regulation combined with a restricted local talent pool the focus is on bringing back Australian talent that moved overseas during the last two decades. Financial hubs with more robust regulatory frameworks and higher transaction volumes are the ideal target with Australian nationals working in London, New York and Hong Kong high on the wish-list. Arion House is currently engaged in a number of processes centred around identifying talent willing to moving ‘home’ and would welcome the chance to discuss potential opportunities with anyone open to the move.

CONTRACTORS!

Finally, if you are still not sure about your resource for the rest of the year or are losing permanent headcount, Arion House has access to multiple compliance officers and financial crime prevention officers at different levels and cross sector, including banking, asset management and consulting.

House Issue 37, May 2018

Welcome

…to the 37th edition of House, and the first edition since GDPR has come into effect. You are receiving this update because you have indicated you want to, should that change at any time there is a link to unsubscribe at the bottom of the email. We have adjusted our privacy policy accordingly and you can find it here. Should you have any questions please feel free to contact us at privacy@arionhouse.com.

In this month’s issue we have seen some fascinating moves within the crypto currency world and an increase in demand for compliance officers in EU hubs post Brexit.

Cryptocurrency

Bitcoin captured global curiosity following its monumental rise in 2017. To name a few, banks such as Goldman Sachs and JP Morgan are hiring their first cryptocurrency traders and Heads of Crypto-Assets Strategy to lead their efforts within this newly founded industry. Likewise, government authorities and regulators from around the world have vowed to make concerted efforts to address the industry and develop regulations as the market evolves.

Ripple made headlines in November 2017 when it announced Benjamin Lawsky was joining its Board. Lawsky was perviously the Superintendent of Financial Services for the State of New York and best known for his pursuit of Standard Chartered over sanctions violations. Crypto brokerage Omega followed suit in January by enlisting Bart Chilton, formerly of the CFTC to its Board.  

In Asia, Hong Kong based Genesis Mining, recently named Shah Hafizi as Chief Compliance Officer and Americas General Counsel. Haifzi was previously the Chief Compliance Officer at BlackRock. In similar fashion Monaco, a pioneering payments and cryptocurrency platform have been making additional compliance and cybersecurity hires in their Hong Kong office. Finally, Ellis Gyngos, formerly a consultant with Kroll in Hong Kong has launched a Crypto due-diligence and rating agency called Know Your Token.

With the inevitable development of the crypto regulatory structure there will be an increasing need for professional advice to interpret those rules.  As such the “Cryptocurrency Compliance Officer” is born.

New EU Hubs?

EU passport holding compliance officers are in demand! The Brexit process has helped some cities above others, with the three main beneficiaries emerging as Dublin, Luxembourg and Frankfurt. This has led to an increase in compliance officers being based in EU locations, at a cost to the UK.

The main hiring is in advisory compliance and positions managing regulatory relationships at Director and Senior Director level. This is to be expected where the most senior regulatory and compliance positions within Continental European operations were generally at the Head of Country level. Bank of America have just moved senior MD Oliver Geffroy to Dublin to perform such a role.

Since the UK’s decision to leave the EU, Morgan Stanley, Citigroup, Standard Chartered and Nomura have all picked Frankfurt for their EU headquarters. Goldman Sachs is also looking to double its 400 staff in the city with the acquisition of space in a new tower, with an option to take more. JP Morgan is ramping up a number of EU sites, with plans to move up to 1,000 London roles. A raft of Asian banks including Nomura, Daiwa, Sumitomo Mitsui Financial Group (SMFG) and Mizuho Securities are also on track to expand their operations in the German financial hub. 

Arion House has been involved in a number of EU-based processes during 2018 and would be happy to share any specifics insights should you require them.

House Issue 36, April 2018

Welcome

…to the 36th edition of House! Despite a recent slowdown in hiring in some quarters, there have been two huge global moves this month. Former Goldman Partner, Una Neary, was hired by BlackRock to be their new Global Head of Compliance based in New York, replacing Georgina Fogo who has joined Janus Henderson as their new Chief Risk Officer in London. Barclays, meanwhile, have promoted Laura Padovani to be their new Global Head of Compliance following the departure of Mike Roemer late last year to Wells Fargo. Padovani will be based in London.

Areas of continued hiring activity include the establishment of several new hedge funds in Hong Kong, with others growing as they look to take advantage of the opening up of the Chinese equities market; naturally a compliance officer is top of their agenda!

We have also seen a real growth in the interim management market for compliance officers within banking and asset management. Finally, we have noticed a number of people returning to Goldman Sachs after leaving in the last year.

Interim cover - there’s some amazing talent available!

Asia has not traditionally been a hotbed for flexible or interim workers. Permanent positions have been the norm, contractors were often looked down upon and seen as a second class option. Perceived high accommodation and other fixed costs often put off top interim talent. However, we are genuinely seeing a change in attitude, especially around measuring regulatory risk. 

Compliance and financial crime prevention teams are in a state of flux; costs are being examined and headcount assessed, and with the volume of regulation coming out of European and Asian regulators it means there is still a lot to be done! Many firms are looking to interim cover to fill immediate gaps; for project work , maternity cover and reviews, whilst a search is conducted for a permanent solution.

The work force in Hong Kong is evolving. Traditionally, the Big 4 firms dominated the interim management market, but firms are realising that there is experienced talent available in Asia now, driven by the desire of individuals to follow a non-linear career.

Hedge funds are hiring compliance officers in Hong Kong

The hedge fund industry has taken a hammering globally over the last couple of years. But with the opening up of China and the surge in Asian equity markets, hedge funds are seeing plenty of opportunity to grow here. The regulatory environment, however, is also evolving and the SFC have released several new papers pertaining to asset management, in which hedge funds come under greater scrutiny and accountability.

We have seen an increase in demand from hedge funds in Hong Kong to hire either their second or third compliance officers or a first dedicated compliance officer to support a legal head. The hiring is happening largely at the 2-5 years experience level, suggesting an uptick in workload for existing compliance officers. It is also a great opportunity for associates and AVPs at global investment banks who have suffered from recent pay freezes to take on a new challenge with strong rewards.

Goldman targeting former employees in compliance

Goldman appear to have spent the last 6 months making a concerted attempt to lure back leavers to their compliance function. Paul Burgess has returned to Asia Pacific to be the new APAC Head of Securities Compliance and in Europe Nicola Salter and Jo Redgrave have returned as Managing Directors in Securities Compliance. 

Why are Goldman targeting former employees in compliance? It seems it works two ways; firstly, it shows the existing talent base that they have largely grown themselves that the grass is not always greener and secondly, they get back people who grew up as Goldman people, understand the culture and can bring ideas from their ‘secondment’ to enhance the team.

Need an Interim Manager in London or Hong Kong? - email wrowland@arionhouse.com or imorrison@arionhouse.com to discuss available talent!

House Issue 35, March 2018

Welcome

…to the latest edition of House. Key themes this month include the rapid surge in data privacy hiring (even before the Facebook story broke!), the increase in AML hiring amongst Australian banks globally and, finally, the increased profile of whistleblowing departments across the globe. 

This month’s most notable senior move was at Standard Chartered Bank, where it was announced that Neil Barrie will be leaving as their Global Head of Compliance, with no replacement announced.

Data Privacy Hiring!

With approximately two months left until GDPR comes into effect it’s unsurprising that we have seen a swathe of hiring over the last two quarters. There has been a rush to appoint registered Data Protection Officers with the recurring recruitment theme appearing to be that there is no recurring theme. We have seen compliance officers side stepping into these positions, consultant experts moving in-house, risk and assurance professionals following their own academic interests (or market direction) and technologists leveraging their technical expertise.  The disparity in approach to hiring has been mirrored  by the variety in where these roles sits within the business. Again, this seems to be dictated by the perceived capacity (for this you could also read level of interest) of Compliance, Risk and Operational departments as seen by their respective heads.

The DPO is now a registered position which suggests there could be an associated level of influence on strategic conversations. It will be interesting to see how much influence this position holds once the  infrastructures, policies and required culture shift around data management have been implemented. As we have seen previously, no matter what regulation states, culture is set at board level and filters down from there and like any new division only time will tell.

Whistleblowing - How Far Have We Really Come?

The FCA has made significant steps in recent times to update it’s regulation in order to encourage would-be whistleblowers to step forward. The total number of whistleblowing cases has increased across all industries and the current climate means whistleblowers are more likely to be believed. In addition, the European Parliament have recently delivered a number of recommendations to the European Commission aimed at further protecting whistleblowers. But despite all this the number of overall whistleblowing cases raised by the FCA has fallen from just over 1,300 in 2014, to just under nine hundred by the end of Q3 2017.

A recent Freshfields Bruckhaus Deringer survey suggests that corporate culture is affecting engagement with internal whistleblowing facilities; in fact 55% of managers stated that they or their colleagues would be reluctant to step forward due to concerns over their future career prospects. In fact, in the UK the perceived level of support from seniors managers towards whistleblowers is perceived  to have dropped dramatically from 51 to 38% since 2014. 

Perhaps as a reflection of these concerns we are seeing an increase in requests for candidates with experience in creating training regimes aimed at regulatory and ethical awareness of the business and whistleblowing ‘champions’ to safeguard the process. The main take-home from this is that increased regulation alone will not ensure a morally proper financial services industry. For Heads of Compliance, now more than ever, it is vital to develop, market and continually reinforce an internal culture of ethical operation and reprisal-free process for genuine whistleblowers.

House Issue 34, February 2018

Welcome

…to the latest edition of House and Gong Hey Fat Choy! It is the Year of the Dog and we have definitely seen Asia Pacific take the lead in a hiring resurgence amongst regulatory professionals. It seems we were barking up the wrong tree with a perceived slow down, as investment banks, asset managers, law firms, corporates and the consulting sector all continue to hire regulatory experts. 

This month we have seen a real push by investment banks to focus on their VP and Director level recruitment; and identifying talent externally. 

We have also seen hiring within asset managers really take off globally, but how far will it go? 

Finally, we continue to see the top jobs in compliance going  to internal candidates, as Goldman appoints from within in Europe, replacing the long standing Charles Eve with joint heads.

Juniorisation

Juniorisation: ‘The process of older and more experienced staff being pushed out of a workforce in favour of younger and less expensive people’ (Collins Dictionary definition). 

“Juniorisation” has been a common theme in the front office of investment banks over the last two years, as a combination of technology and cost cutting has forced firms to become more lean. However, has this process started to permeate into regulatory functions.

We have not seen wide-scale evidence of this process yet, however, as compliance and financial crime prevention teams do get smaller we anticipate  “juniorsation” will be a factor in shaping the compliance functions of the future. As global and regional heads of compliance are increasingly looking to cut costs, the easiest way to make them is to replace expensive MDs. 

Arion House has seen a definitive move by top tier investment banks to reduce the amount of MDs on their compliance roster, and hiring an MD externally is becoming increasingly rare. Citibank made several cuts at the Director and Managing Director level early last year within compliance and financial crime and this was followed by JP Morgan in the final two quarters.

Asset Management

We have discussed the asset management industry in several editions of House, and it appears that the anticipated hiring war for talent within compliance and financial crime has started. Aviva Investors made two signature hires in Europe; hiring Peter Hazlewood, formerly Global Head of AML at Deutsche and HSBC, as their new Head of Financial Crime Transformation and Lionel Smith as their Head of Compliance, formerly the Global Head of Compliance at RBS and EMEA Head of Compliance at Credit Suisse. We also saw Matthew Pescoe join M&G from Standard Chartered and Andrew Bradley join Fidelity from Unicredit in London.

The move from the sell-side to the buy-side has become an established path and it seems a successful one for regulatory professionals. In conversations with regulators in both Europe and Asia Pacific over the last 6 months, the common theme emerging is that the asset management sector is going to be the number one focus for their supervision. 

It seems firms are reacting to this heightened scrutiny and preparing accordingly. We anticipate this focus will continue in 2018 as recent senior hires look to build out teams in both Europe and Asia and the smaller or less proactive asset managers make initial hires in both compliance and AML.

Big 4 Hiring

We have seen a lot of interest from the Big 4 to hire candidates from Associate to Director level in Asia Pacific. It seems they are anticipating a lot of project work in the coming year. Lateral candidates from other Big 4 or niche consulting firms with forensics skills, subject matter expertise in AML, sanctions and anti-bribery and corruption are in hot demand, ideally combined with technology and data analytic skills.

The really ‘hot’ candidates though, are those which can bring industry experience, especially from firms who have been under investigation, a monitorship or consent order and are looking to move into a consulting firm. As regulatory pressures ease off in some of the larger financial institutions, we predict a move from the banking sector to the Big 4 for many AML professionals.

We also anticipate the Big 4 looking at some of the technology firms and vendors for senior hires and even acquisitions to diversify their offering, especially in data analytics and cyber crime prevention and remediation.

House Issue 28, July 2017

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.

House Issue 27, June 2017

WELCOME

…to the 27th edition of House. Notable hiring activity over the last month has been seen:

• at Deutsche Bank, where more senior hires have been made in Anti-Financial Crime, globally
• within the payments industry, notably at Ant Financial; the payments arm of Alibaba who recently acquired Moneygram
• at asset managers looking to hire their first dedicated Anti-Money Laundering officers, especially in London
• the continuation of outsourcing of compliance and financial crime departments within capital markets.

Electronic Payments Systems

In recent years, Hong Kong’s rapidly expanding e-payment market has seen the entry of a whole host of new e-payment tools that are challenging the market dominance of conventional non-cash payment service providers. 

Due to these rapid developments, the HKMA implemented a licensing and regulatory regime for multipurpose stored value facilities (SVF), under the Payment Systems and Stored Value Facilities Ordinance in 2015, to provide a robust legal and regulatory framework to manage the risks that may arise from SVF. There are currently 13 SVF licensees and 3 licensed banks operating in the HK SVF market. 

Arion House has seen a marked increase in e-payment compliance hiring across the globe. Ant Financial has been particularly prolific, having recently made a series of hires, including Seng Hong Wee in Singapore as the Head of Compliance for International Business, James Wang as the China Head of Compliance and Victoria Edison as the Americas Chief Compliance Officer. Similarly, Tencent internally appointed Timothy Ma as the Hong Kong Head of Compliance for Wechat Pay.

The increasing array of payment options being made available, combined with the regulatory developments, will only sustain compliance hiring in the e-payments market. However, compliance officers and regulators alike will look to leverage the experiences gained from the SVF regime towards the more technologically-advanced financial services environment of the future.

Asset Management

2017 has really seen the regulatory attention swing towards the buy-side community. As a result, asset management firms across Europe and Asia have been looking to boost their compliance functions and put in place structures resembling those of investment banks. In a very tight candidate pool, firms are having to look outside the existing asset management population and hire from the sell-side.

Financial crime has seen the most activity, with Andrew Bradley, a fin-crime banking veteran, joining Fidelity, Amy Pile joining Man Investments in London and Matthew Pascoe joining M&G Investments in London. 

Whilst asset managers view their business as low risk in Asia, it is unclear if regulators and enforcement agencies agree. Many of the larger funds have one or maybe two senior staff covering this area and must now consider if this is enough?

Are banking AML professionals the right people to move to asset managers? Time will tell as the moves are still in their infancy, the buy-side likes to stay lean though and many MDs in banks are used to managing very large teams.

House Issue 26, May 2017

WELCOME

…to the 26th edition of House. We are starting to see some real movement in Asia Pacific across all sectors and we anticipate a busy summer ahead. In Europe, the banking market seems quieter but with the election over with this week, we expect more firms to start hiring. Sectors of notable activity this month include asset management, consulting and data protection, with one of our client’s describing data privacy and protection as the ‘new compliance’...  

Regulatory teams are shrinking but hiring is up? 

US banks have dramatically reduced the size of their compliance teams, especially in high-cost locations. Citibank has moved a large proportion of their core compliance and AML functions to offshore locations in Kuala Lumpur, India and Belfast in Northern Ireland. This is a trend we have seen for some time now. As compliance becomes more business as usual than fire fighting or remediation.

Why then, does it appear that the regulatory sector is continuing to grow? We think this is two-fold; 

Whilst the hiring curve for banks may be heading down, other sectors are only just coming to the party. Corporates, asset managers, fintech, wealth managers, law firms and even not-for-profit organisations are increasingly being scrutinised by a new regime of accountability and conduct.

In addition, many banks and asset managers are looking to improve the quality, if not quantity, of their teams. Sometimes described as ‘top-grading’, new talent is introduced at the expense of an incumbent to improve the standards within a department. This is understandable where regulatory teams have increased dramatically in size, and the type of leaders or managers that started out in smaller teams do not always fit now.

Data Protection

China has just released an aggressive and far-reaching cybersecurity law aimed at protecting the world’s most valuable commodity; data. The EU General Data Protection Regulation (GDPR) becomes law in May 2018. Hong Kong and Singapore’s governments both have consultations out to specifically look at enhancing existing legislation. The advent of ‘big data’  has really thrust the regulation of information into the limelight. However, what makes a data protection officer? And when does data protection become information/cyber security and intersect with the law?

We have taken a look at the backgrounds of some ‘data protection officers’ at the largest banks and corporates and discovered that their backgrounds were really varied. Lawyers, regulators, technologists and auditors were the most common amongst the array and it's safe to say, there is no obvious source for data protection officers. A lot more work is to be done on how to successfully staff up these functions so they can provide the right sort of security. Cases such as the 'wanna cry' virus and data leakages at Octopus in Hong Kong and Yahoo in the US mean that these are going to be real risk management issues that boards will be looking at very closely.

It may well be, and it will be fascinating to see how firms staff up in this new and growing area.

House Issue 25, April 2017

WELCOME

...to Issue 25 of House. Three key trends have dominated this month; a continuation of change at the upper echelons of the compliance population in Asia Pacific, another key change in the global leadership of a Wall Street giant and multiple moves within consulting and law firms as they anticipate a growth in regulatory enforcement and an increase in work.

MIFID II

MiFID II is creeping ever closer and it will be the largest overhaul of regulatory legislation in the European financial sector for more than a decade.

Many institutions are still working on understanding exactly what data needs to be reported and in what format. For many compliance functions, the issue is in understanding where the overlap in regulation occurs and how to then apply common standards in order to automate the process.

Due to the wide-ranging nature of MIFID II’s impact and the sheer volume of enquiries, regulators are struggling to provide clarity over the minutia of the regulation. In response, we have seen an increase in demand for regulatory compliance experts with experience dealing with the regulator. An ability to interpret the root nature of the legislation will be increasingly important to providing both market and operational efficiencies.

HK insurance regulator

The 26th June will signify the commencement date of the second phase of changes to Hong Kong’s insurance regulatory framework. This will bring into effect over 100 amendments to the Insurance Companies Ordinance, renamed Insurance Ordinance (IO), and the establishment of the Independent Insurance Authority (IIA) which will replace the Office of the Commissioner of Insurance (OCI) and take on its regulatory functions.

The IO will significantly widen and enhance the scope of the IIA’s regulatory, investigatory and enforcement powers and enhance corporate governance requirements within the insurance industry. As a result, the hiring implications for both brokers and carriers has been a hot topic of conversation for Arion House, with compliance professionals showing an increasing interest in the insurance industry and the potential career opportunities it presents.

Since the announcement of the Amendment Ordinance in 2015, we have seen a steady stream of hiring rather than an immediate surge and we expect this trend to continue. However, given the uncertain nature of how some of these amendments will be implemented in practice, we expect insurance industry stakeholders to remain mindful of future changes and the potential need for larger regulatory functions.

Business managers replacing heads of compliance?

Roger Barbour has been announced as the new APAC Head of Compliance at JP Morgan. This is a very interesting appointment because whilst he has a very impressive CV, he has never run a compliance department and JP Morgan has one of the largest in the region. This is representative of a wider market trend; Deutsche Bank, Bank of America Merrill Lynch and BNP Paribas have all recently filled senior positions within compliance and financial crime prevention from business management or first line of defence roles. The focus appears to be on people with significant business experience and longevity within the firm.

An ability to navigate complex organisations, manage upwards, downwards and, most importantly, externally, are now key attributes required of Managing Directors within compliance and financial crime departments,.These talents are often found from within.

House Issue 24, March 2017

WELCOME

…to the 24th edition of House. Now that most bonuses across the industry have been paid, we are anticipating more resignations in the weeks to come. 

Arguably the biggest move within the sector this month was an internal move at Goldman Sachs, with Court Golumbic being made Partner; a real sign of the growing importance of Financial Crime Compliance. Court becomes one of the chosen 1% of employees to be elevated to Partner status.

Key hiring trends this month include: opportunities from an opening China, the possible emergence of a compliance officer surplus and the question of what background and experience to look for in a good compliance officer in the corporate sector.

Litigator or practitioner?

The corporate sector is still very much in its infancy when it comes to global compliance functions, so questions around what makes a good compliance officer are still being asked. Traditionally, large corporates have hired litigators as their senior compliance officers, a sensible move given the firms in question are often creating such a position to negotiate with a hostile regulator or government enforcement agency.

Arion House has met several Heads of Compliance from the corporate sector this month and the large majority still have a legal background. However, the people they are looking to hire, or the people we are looking to replace them with, are often not clones. Conduct, ethics, training and framework are the key pillars that compliance departments need to implement now, and this is not necessarily the key skill of former litigators. Fortune 500 and FTSE 100 are looking to implement or bolster long-term compliance programmes that change the culture of a global company to ensure that the conduct of staff is in line with the programme. Key to this is a compliance officer who can win over hearts and minds and get others from all parts of the organisation to embrace change. 

Where to find these people? Financial Services compliance functions, management consulting firms or the Big 4 regulatory consulting teams? We don’t think there is a one size fits all answer but there are some very interesting positions appearing across the globe for people who have the personality to change the culture.

China

Whilst this is a common theme in House, we are genuinely seeing a lot of evidence that China is on the agenda for banks, asset managers, corporates, law firms and consulting firms as it is the most common focus of questions asked.

According to Chinese news sources, over the weekend The China (Shanghai) Pilot Free Trade Zone (FTZ) has had its new reform plan approved by the central government. This suggests a set of new rules will be unveiled that aims to lower the barrier for foreign investors on company listings and bond financing and liberalise regulations governing finance, foreign investment and trade in the area. The reform plan will also likely include the establishment of a free trade port inside the FTZ.

As a direct result, we have seen buy side firms looking to hire compliance officers and further establish their presence in the region. We foresee this trend growing, as foreign firms look to capitalise on China opening up. 

“A surplus of compliance candidates….or are there still needs?“

Reactionary hiring across investment banks in KYC and AML has now reached a point where technology has caught up with regulation forcing firms to contemplate downsizing. During several meetings across Europe and Asia the automation of the more process driven, data-heavy compliance functions have never been far from the conversation. The wider ‘assurance’ functions have been left largely intact through cost-driven headcount cuts but as regulatory fines tail off it is estimated that lenders have paid over £250 billion globally in regulatory fines since 2008 - these have become areas of potential saving.

Markets have become fragmented and margins squeezed so the ability to respond to trading floor queries in as close to real-time as possible is now increasingly important. On the buy-side, we are seeing robust compliance infrastructure used as a marketing tool.

So whilst efficiency and automation are creating a surplus in some areas, a need to be compliant and set parameters for automated processes necessitates an increase in decision makers and subject matter experts. The trick now will be for compliance units to ride out increased automation whilst retaining an understanding of the operational implications of decisions at the top.

House Issue 23, February 2017

WELCOME

…to the 23rd edition of House, where we highlight tentative steps amongst the global investment banks to start hiring at MD level again; all change at JP Morgan; a surge in hiring within corporate investigations firms, private wealth management and law firm hires as a result of the Panama Papers and the possible emergence of corporate compliance teams within MNCs across Asia Pacific.

Corporate Compliance, when will it happen?

New regulation and international scandals, such as the Rolls Royce case, have heralded an increase in interest from the corporate sector to hire compliance officers. We have already seen tangible evidence of this with senior hires at Hilti and Takeda Pharmaceuticals in Hong Kong last year and we anticipate more hiring as the teams are built out.

Arion House has been working on two searches for Heads of Compliance for large MNCs this year and it has been interesting to see how the compliance structures of firms in Asia Pacific differ and the skill-set needed compares to those at banks. The key requisites we are being asked to deliver are candidates with the ability to design a compliance framework, implement training in ethics and conduct and, most importantly, experience in anti-bribery and corruption.

Panama Papers fall out

Rattled by last year’s Panama Papers scandal, Hong Kong’s Financial Services & Treasury Bureau (FSTB) has brought in heightened regulatory requirements to non-financial businesses and private companies who have largely been operating under self-regulatory regimes. The new rules would introduce a direct licensing regime for agents who set up such companies, as well as a statutory obligation to hold up-to-date information on the true owners and controlling parties, and to provide this information to the authorities upon request.

As a result, private companies will need to develop their regulatory functions. Firms most likely to increase their compliance spend include law firms and private wealth managers.

Corporate Investigators

Arion House has identified an increase in demand for experienced investigators and a fragmentation of the associated consultancy market. In the past, this space has been dominated by the Big 4 and a few well-known providers of specialist investigative services, but last year saw multi-disciplinary consultancies look to challenge existing players. RSM brought in 2 new MDs from KPMG and PwC to beef up their Forensic Investigation capabilities in the UK and Alix Partners brought in a former KPMG partner as an MD into their FAS practice, more recently Neil Fletcher has taken over as Director of the new Forensic and Investigation Services team at Mazars. In Asia, we have seen the emergence of firms such as Blackpeak and Berkley Research Group since 2010.

With the investment banking world having embraced the benefits of FIU teams within their wider compliance framework, the focus for these new consultancies appears to be the corporate sector. It certainly seems as though the stories of Daimler and VW have created a shift in attitude toward pro-active reputational risk management which consultancies have reacted to accordingly. It would also be fair to say that technological advancements, especially in relation to large data sets, are allowing this work to be carried out with minimal impact on day-to-day business.

House Issue 22, January 2017

KUNG HEI FAT CHOY!

It has been a very busy start to 2017 and we think this activity will accelerate following Chinese new year. Hiring has been broad based, across banking, asset management and the corporate sector.

But the ‘biggest’ news so far this year, is the launch of Arion House UK! William Rowland is leading the business, offering executive search and market intelligence services to our global client base from London. Please reach out to him (E: wrowland@arionhouse.com, D:+44(0)20 7096 0811, M: +44(0)78348 58002) or visit him at 32 Threadneedle Street if you are in London. 

Asset management needs structure

The most common feedback we have received this month concerns the asset management industry. In conversations with regulators, partners of law firms and heads of compliance, it seems the regulatory pendulum is swinging from banks to asset managers. Asset managers are likely to be closely scrutinised and the structures of their compliance functions questioned. 

Traditionally, compliance teams have formed a sub-set of legal departments within asset managers, will this change? Will compliance be elevated to stand on a par with legal functions; with their own, separate reporting lines, or structured more like the banks; with product aligned compliance officers, separate surveillance teams and even control rooms? 

Reverse globalisation

Whilst European and American banking institutions are rationalising their exposure to ‘non-core’ businesses and geographic regions, like Barclays and RBS across Asia Pacific, our Chinese clients are increasing their exposure to western markets. Saturation of the internal consumer market in China has led Chinese businesses to expand their global footprints in a bid to maintain growth.

This push into western markets has been accompanied by a growth in Chinese banking representation. This makes sense, as Chinese corporates continue to use their own relationship bankers who they trust and understand their business. As such, we have seen a growth in demand for western regulatory experts to support this growth and ensure they remain on the right side of the regulator. The recent fine by the DFS of  the Agricultural Bank of China late last year has certainly focused minds.

Front office is taking over compliance

For the majority of our global clients it’s clear that scrutiny from the regulators continues a-pace with many project teams still focussed on the implications of MIFID II and business leaders in the UK still working to understand the true ramifications of the Senior Managers Regime (SMR).

However, there are signs that some see the possibility of a sea-change and are reacting accordingly. Do recent hires  from ‘the business’ to senior compliance positions, such as Francois Regnier replacing Anthony Whitehouse at BNP Paribas, signal a shift across the Atlantic to lighter regulation of investment banks? Trump’s initial economic appointments appear to suggest otherwise, but some appear to be hedging their bets. Only time will tell.

Anti-bribery & corruption

A recent report from Transparency International, which looked at trends in perceptions of global corruption, concluded that two-thirds of the 168 countries included scored below 50 on a scale from 0 (considered highly corrupt) to 100 (considered very clean). In addition the IMF recently stated that 5% of Global GDP ($1.5 trillion) is directly linked to bribery while US enforcement agencies saw another record year of fines, with $2.4 billion collected in 2016.

In recent months we have seen separate statements from the SEC, FCA and AMF all promoting the benefits of early disclosure in relation to breaches of anti-bribery and corruption laws. The AMF have even gone so far as to completely overhaul their ABC regulation with the inception of Sapin II.

We have seen Rolls Royce hit with heavy fines for historical misdemeanours and now reports suggest that former Och-Ziff partners may also have a case to answer. These incidents mean that many businesses are evaluating their ABC provisions and while the larger institutions have work to do, it should also be noted that SMEs are not exempt and may well have more ground to make up. It’s clear that this sector will see increased activity during 2017.
 

House Issue 21, December 2016

WELCOME

….to the final edition of House in 2016 and in what has consistently been described as a challenging year, we highlight some positive developments and our predictions for the year ahead.

2016 HIGHLIGHTS

Fragmentation creates opportunities. Front office investment bankers and traders left the bulge bracket institutions in droves, whether voluntarily or not. Many have joined smaller corporate finance boutiques, payments firms, private equity funds, hedge funds, HFTs and FinTech start-ups. This will surely lead to some really interesting opportunities for compliance officers to develop their careers at smaller, more entrepreneurial firms with a less silo-ed environment

Consulting. The wave of regulatory and technological change, the digital revolution and the rise of ‘regtech' has seen great opportunities in consulting. We have seen a wave of regulatory consulting firms start across Asia and achieve critical mass quickly. Many regulatory professionals performing in-house roles have seen their skills required in these firms, where they are often seen as front office, revenue producers.

Flexible working came to Asia. With the rise of the ‘millennial workforce’, working mothers, technology enablement and flexible working arrangements, 2016 really heralded the end of the 9-5 or, in some cases, the 9-9 culture in Asia. Several banks in Asia have looked to retain staff by becoming the employer of choice for women.

Technology. Whether it be Cyber, Artificial Intelligence or FinTech, the digitalisation of the regulatory industry has created a new wave of interesting and diverse opportunities for technology firms both large and small. Interestingly, we have been asked by two technology firms to help build their offerings in Asia Pacific this year and both were specifically looking for candidates from in-house compliance or financial crime prevention teams; “individuals who had been there and experienced the issues our products are designed to solve…”

PREDICTIONS FOR 2017

Relaxing of Regulations?

Trump’s election campaign suggested there will be a relaxation of regulation but so far he has asked New York District Attorney, Preet Bharara, to stay, whilst Debra Wong Yang is being touted as favourite to chair the the SEC; a hardliner with a reputation of going after large corporates. This suggests more continuity, after all, being tough on corporate America remains popular…

Quality. Volume hiring of regulatory professionals has come to an end. The profession has become established in the same way as finance, legal, technology and accountancy functions. There is now a very large community from Manhattan to Manila that didn't exist 5 years ago. The focus going forward will be on real quality over quantity. 

How do firms identify talent? Managers and headhunters who have a deep understanding of their candidate pool, can touch talent not actively looking and gain informal references and insight on candidates will be crucial in building out and sustaining high quality teams.

Cross fertilisation of talent. Arion House estimate some 80% of global regulatory talent currently sits in the banking sector. The US regulators appear to be looking to take a more ‘lenient’ line towards the sector and initial feedback suggests that many banks will be reducing the size of their compliance functions. This is likely to create a surplus of compliance professionals, but where will they go? Asset Management, High Frequency, Hedge Funds and Private Equity. The indigenous population exists and there will be some highly qualified and more importantly experienced compliance officers with some crucial ‘war experience’ who should make up the bulk of compliance staff in these growing sectors from 2017 and beyond.

Artificial intelligence. The role of the compliance officer will become more automated and many of the compliance officers of the future will be robots. A compliance officer who knows the rules, can learn new rules and work with a business and remain devolved of conflict and emotion could be the answer that regulators are looking for?  We don’t really think this will happen immediately but it will be interesting to see which firms embrace this technology first and how much they use it to counteract regulatory risk…

House Issue 20, November 2016

WELCOME

….to the 20th edition of House! In the run-up to the Christmas period, traditionally a quiet time for hiring, we are seeing unseasonably high levels of activity. We are still being asked to help with searches as firm’s within the banking sector target quality over quantity and asset managers build larger and more effective compliance teams. The corporate sector continues to react to the changing regulatory landscape and professional service and law firms increase their benches in reaction to client demands, regulatory and political uncertainty. We anticipate some big moves in the new year.

Corporate compliance joins the party…

Multi-national firms across the world have finally started to add to their global compliance teams. High profile bribery and corruption cases have highlighted the need for increased internal functions in higher risk sectors. Patrick Tong joining the Japanese pharmaceutical giant Takeda from Johnson and Johnson and Stanley Chung joining global construction firm Hilti in Hong Kong suggesting that the corporate sector is reacting to the need for compliance professionals.

Asset management

Recent guidelines issued by both the SFC in Hong Kong and the MAS in Singapore have suggested that regulators will be shifting their attention from the sell-side to the buy-side imminently. Compliance teams are significantly smaller on the buy-side, compared to their sell-side counterparts, and so we have seen an increase in demand from our buy-side clients hiring. Reporting lines for these compliance officers are also changing. Where it was once traditional for asset management compliance teams to report to the APAC General Counsel, there is now often a direct line to the Global Head who reports straight into the Board. Both trends signify the growing autonomy and importance of compliance departments within asset management.

Monitoring and testing

Monitoring and testing has been a consistent theme throughout 2016 with investment banks, brokers and asset managers really starting to develop teams that can increase the level of risk identification and assessment that global regulators are demanding. But where are firms finding the appropriate individuals to staff these teams? Opinion is polarised; the large US retail banks, who were pioneers in setting up these functions, traditionally looked at audit departments. There was then a trend to look at ex-business managers or even front office salespeople and traders. Now the thinking is lawyers, with a litigation background, are the answer. People who can ask direct and very pertinent questions and get the answers needed.

Trump?

Finally, we had to mention Trump, we thought it easier to remind you of his quotes towards the sector and regulation:

“Dodd-Frank has made it impossible for bankers to function.” When pressed on the extent of the changes he wanted to make, Trump said: “it will be close to dismantling Dodd-Frank.”

He describes the FCPA as “a horrible law and it should be changed.”

On Cyber he said “I have a son. He’s 10 years old. He has computers. He is so good with these computers, it’s unbelievable.”

Trump will undoubtedly make changes, how much he can actually do to change the regulatory environment remains to be seen, either way, we think we will be looking at an interesting time for hiring in the sector….

House Issue 19, October 2016

WELCOME

…to the 19th edition of House and we are into quarter 4. Hiring is still happening but the majority of it is outside of the banking sector which seems to be shutting down early for the year…the key sectors we are seeing is in corporate compliance and ethics within MNCs and hedge funds and functionally we are seeing hiring within cyber security..

Hedge Funds

The press in recent months has not been good for the hedge fund industry, the high profile Och-Ziff case and the continuing focus on the industry from regulators and governments across the world has seen an increase in hiring within both the large established funds, as well as the smaller, growing funds.  Where to hire from? It is a difficult balance to strike and many hedge funds look at compliance in differing ways. The most common question is- do you hire from a long only fund or from an investment bank. In our experience the most successful hedge fund compliance officers come from the securities businesses of investment bank, largely due to the majority of hedge fund managers coming from this background..

Corporate Compliance and Ethics

We have mentioned in previous editions of House how the corporate sector is looking to hire more compliance officers and we have seen recently how large multi-nationals are starting to resource in this area. The dilemma we have is where to find compliance and ethics professionals for the corporate sector? Other than FCPA and Anti-Bribery legislation, there is no regulator per-se, so it is a different beast to supervise than with an investment bank. The key risks are where it gets interesting. Reputational, and Conduct Risk, ensuring that the training and culture are in place to prevent misconduct and damage to the reputation of the corporate. Data privacy and safety are also a key part of the compliance officers role in a growing sector for regulatory experts.

Cyber Security

Cyber has been in the press a lot this month, so we thought it worth another mention! The internet attack that brought down Twitter, Spotify and other social media outlets last week has provoked a lot of debate, but has there actually been any hiring? 

Yes… We have started to see some movement in Asia, and it’s more at the junior end. More specifically we’ve noticed that Professional Services firms are hiring security architects from banks and corporates alike to try and bolster out their cyber capabilities. Perhaps this is because institutions are willing to pay a premium for consultants at this point while they work out if an internal option is viable or necessary? Maybe we will see institutions trying out Cyber professionals on a contract basis to begin with?

Is it all it’s cracked up to be for the Consultants in Professional Services? We have found that there is pressure on Cyber experts to sell their own services and often for programmers, pen testers and architects it can be a skill-set that they are not used to. We’ll be keeping a close eye on this area and in November Arion House will be hosting a Round Table event: Asia Security Breaches and subsequent Hiring in Cyber Security. Get in touch if you are interested in joining, spots are limited.

House Issue 18, September 2016

WELCOME

….to the 18th edition of House and, as we enter Q4, we are still seeing significant pockets of hiring. Although activity in the investment banks has been largely quiet, cybersecurity continues to be on everyone’s lips; notably in the US where Gregory Touhill has been named the U.S. Government’s first Cyber Security Chief. Private equity firms continue to hire in response to new global regulation of the industry and the trend for lawyers to move from in-house positions to law firms also continues.

Cybersecurity

Hiring in this area has definitely increased in the last 6 months globally, with big hires in Government and at MNCs in the US. In the UK, the Government has announced a “ground-breaking” partnership with tech startups to develop cutting-edge, world-leading cybersecurity technology as part of its National Cyber Security Programme. However, this is not just a trend confined to the Western world. The HKMA has unveiled two initiatives; the FinTech Innovation Hub and a FinTech Supervisory Sandbox, which are aimed at spurring banks to embrace technology. Significant moves in Asia include the hiring by AIA of Steven Myers as the Chief Information Security Officer for Asia Pacific. PwC have also hired Marin Ivezic from IBM, indicating that professional services firms are seeing an increase in their cyber pipelines. These significant developments will only add fuel to the fire in a rapidly expanding industry that will receive increasing attention from both the public and private sectors.

Private Equity

Four private equity funds affiliated with Apollo Global Management, the $186 billion PE manager,, settled charges with the SEC last month agreeing to pay $52.7 million to settle charges they misled fund investors about fees and a loan agreement. The SEC said Apollo, which settled without admitting or denying the government’s allegations, was also charged with failing to supervise a senior partner who charged personal expenses to the funds. The SEC has since set out a series of distinct instructions on how Private Equity funds need to enhance their compliance structure and staffing. On the back of this we anticipate a lot more hiring in this sector.

Interim Consultants

‘New’ law firms such as Axiom and the recently launched Korum, a Hong Kong based firm, have really revolutionised the legal labour market in the past 6 months. Traditionally, the idea of flexible labour, short term contracts or interim managers were viewed as a lesser option to permanent employment. Uncertainty, especially amongst Western firms, has led to many of them looking at alternative resourcing options, such as interim managers. Another source of growth has come from Chinese Banks looking to hire interim managers to help with their growth, providing much needed IP and know-how on how to grow a department. We anticipate a growth in interim managers in compliance and financial crime to fill much needed gaps in times of headcount reduction and, indeed, increase.

House Issue 17, August 2016

WELCOME

…to the 17th edition of House and, with the summer coming to an end, attention towards hiring regulatory professionals has reignited across Asia. Areas of notable activity include hiring within law firms, anti-bribery and corruption functions and the buy-side looking at sell-side compliance officers. Whilst we have seen some right sizing in the investment banking sector, we don't anticipate a slowdown across the industry.

Fintech, Blockchain and data, is there really any compliance hiring yet?

We’ve been keeping our ear to the ground about potential advancements in FinTech and especially how this will affect hiring within compliance, either for vendors or users of the technology. Until recently, we’ve been hearing mixed things about whether or not investments into the sector will continue, especially as some FinTech companies have come to the end of their cycle and are even liquidating. What we have heard from clients and from our contacts at FinTech start-ups is that there is a growing confidence that Blockchain can be utilised by larger financial institutions on a permanent basis. What does this mean for compliance? At this point, hiring initial compliance officers or expanding existing teams focussing exclusively on Fintech still seems to be a while off.

Sell-side compliance officers moving to the Buy-side?

Asset managers have been coming under increasing regulatory scrutiny this year, as regional regulators have started to look closely at their compliance controls. However, the benchmark for compliance officers is not as abundant as their investment banking counterparts. The example of Terence Lim moving from Macquarie to Aberdeen highlights the willingness of the buy-side to look at compliance officers working within investment banks. Arion House recently had two clients ask to see a broader spectrum of candidates than the existing asset management compliance population.

ABC

Head of Anti-Bribery and Corruption was a job title that was extremely sparse globally only 5 years ago and even sparser across Asia. We have now seen several firms appoint a regional head of Anti-Bribery and Corruption over the last few years and start to hire teams to support them. We have also seen a notable increase in hiring in corporates recently. Where do we find experts in ABC? The majority of banks and corporates have looked to law firms. However many are also developing such professionals in-house.

Law Firms?

Law firms have started to really boost their regulatory, investigations and disputeresolution teams. Why is this happening? We guess they are conscious of the increase in investigations happening across the region and are anticipating many more. The ability to win the mandates for such investigations is lucrative and often guarantees income for a long time as these investigations typically run for several years. 

House Issue 16, July 2016

WELCOME

...to the 16th edition of House, where the traditional summer lull has been replaced by a resurgence in hiring for regulatory professionals, particularly in roles related to wealth management and fixed income. In the wake of Brexit, this resurgence has not been universal and, in stark contrast to feedback received during last month’s visit to London, UK based candidates are now more interested than ever in moving to Asia Pacific to avoid the prolonged uncertainty in the UK.

Targeting UK professionals

In the weeks following Brexit, we have been asked by banking clients in Sydney, Singapore and Hong Kong to explore the UK market for high calibre individuals who would be looking for a move to the region. This strategy is very opportunistic and largely driven by the reluctance of such talent to move in the last year or so. It seems concerns over Brexit outweigh concerns over schooling, pollution and ‘China’! There are some shrewd hires available if firms are willing to move fast and take advantage of this unique opportunity.

Fixed Income compliance is busy!

With all the uncertainty surrounding Brexit and how it will affect the Financial Services industry, one thing is for sure, fixed Income is busy. The volatility of Sterling has led to a surge of activity and, judging from recent results at global investment banks, in a lot of cases profitability. As a result, the fixed income compliance departments have got a lot on their hands.

Private Wealth

The IMDB scandal has sent shockwaves through the private wealth management sector. Initially, it seemed that a lot of the scandal was contained within the Swiss Bank BSI. However, now that several global banks have been implicated in the scandal and the level of corruption has spread beyond Asia, the need for wealth management compliance officers has grown. Several global firms have already announced they are looking to focus a lot of their growth in Asia and, as such, we anticipate a real war for talent amongst compliance officers with private wealth management and AML experience.

Chinese Banks continue to ramp up...

‘Western banks’ have been relatively quiet for the last quarter or so in Hong Kong and we have seen a real effort by the international arms of Chinese Banks to hire talent, with a lot of success. Job seekers need to put aside the stereotypes of Chinese banks, there are a lot of positives; they are growing, they are generally well capitalised and they pay good bonuses (in cash)...