House Issue 15, June 2016

WELCOME

....to the 15th edition of House where the summer slowdown doesn’t appear to be affecting the growth in the regulatory sector. We are seeing several European Investment Banks increasing their AML functions, large corporates hiring dedicated compliance officers both globally and regionally and the growth in the fin-tech sector has created new opportunities…

Is Asia a desirable location anymore??

...After a recent Arion House trip to the UK, numerous European clients in financial services are reporting similar issues that our clients in Asia are facing with regards to a lack of talent in the AML and KYC space. As our Asian clients look to hire from overseas,

many of the candidate base that we met seemed less inclined when asked if they would move to Asia, compared to previous years. The main reasons cited was the worry of volatility in China, pollution, the perceived cost of living and schooling in the region, it seems Asia is no longer a goal for many...we disagree, it’s great here!

The Fin-tech Dilemma?

Would you move to a Fin-tech firm now? Less regulation, more entrepreneurial atmosphere, in growth phase and more fun! ..however we have started to see some warning signs and some high profile failures such as POWA Technologies mean that although on the face of things Fintech’s are the way forward, there are some major considerations that need to be taken. Either way, the growth in regulation in this sector means more hiring is on the horizon.

What is Cyber?

‘Cyber’ is a common theme we have discussed over the last month and it seems that cyber threat is at the top of any board’s agenda. However what hiring is actually needed? Feedback we have received is that combatting the cyber threat is a step into the unknown for many firms. Who do you hire? How many people do you hire and where do they sit in the business? We anticipate some interesting moves and plenty of mistakes over the next 18 months, but one thing is certain, there will be more hiring... 

House Issue 14, May 2016

WELCOME

...to the 14th edition of house and, after a brief hiatus, hiring seems to be back to levels seen pre-Q1. We are seeing headcount budget approvals in banks, a surge in asset managers hiring compliance officers and a focus on ‘cyber’ across all sectors. The latter perhaps best highlighted in the US by the SEC moving cyber expert, Christopher Hetner, internally to report directly to the CEO, Mary Jo White...

Time to leave banks alone in Asia? Maybe not...

The new head of the UK’s Financial Conduct Authority, Andrew Bailey, has said its time to end banker bashing... Could this mean a reduction in compliance hiring in financial services? It seems that the Singaporean regulator, MAS, have a different idea as they revoke the banking license of BSI for gross misconduct. It will be interesting to see the approach that Asia regulators take in the months to come.

Panama Papers pushing Cybersecurity to the forefront...HK Cybersecurity

To date, industry specific regulatory activity in relation to cybersecurity in Hong Kong has been limited. However, due to the increased frequency and sophistication of cyber attacks and high profile data breaches, many regulators, including the SFC and HKMA, see cybersecurity as a major priority and are starting to take action.

The HKMA recently released the Cybersecurity Fortification Initiative, which aims to raise the level of cybersecurity of the banks in Hong Kong. This initiative is the most comprehensive statement on cybersecurity by a Hong Kong regulator and we anticipate hiring across industries in this rapidly growing sector.

Offshoring...

Various compliance departments have begun to move their KYC and AML functions back offshore. Whereas previously institutions looked to build larger teams in these areas and centralise these functions in Hong Kong or Singapore, it seems that now the opposite is occurring.

A number of investment banks, having built large teams quickly, are now trying to cut costs by relocating employees to centres such as Kuala Lumpur, Mumbai or Manila. Will we see a flood of KYC candidates on to the market? or will they be quickly snapped up by asset managers, insurers, smaller banks or even corporates?

House Issue 13, April 2016

WELCOME

…to the 13th edition of House, and its been a really interesting couple of months that have seen some notable regional as well as global moves across the regulatory spectrum. The scandals in the motor industry continue as Mitsubishi announced they are dealing with similar problems to Volkswagen, who are currently facing a lawsuit of $48 Billion USD from the US government. Multi-nationals globally are examining their compliance functions and hiring ethics and compliance professionals as a result.

Globalisation of regulatory talent

With regulatory pressures coming from different angles and multiple jurisdictions, a number of recent moves have reflected the importance of a diverse and global team. Deutsche Bank has completed an overhaul of its global compliance and AML department, hiring Pamela Root from Citigroup in New York and Peter Hazlewood from HSBC in London, to be based in London and Frankfurt respectively. Hazlewood also spent time in Asia with HSBC and DBS and New York with JP Morgan.

Private equity is on the regulator’s radar…

In just a few years, private equity funds have transformed from a business model driven solely by performance considerations into organisations dealing with regulatory, investor and management reporting requirements.

Have they delivered? On the whole yes, however there are still challenges to be met. As institutional investors and the SEC make a stronger push for increased transparency on fee structures, as well as the launch of the Common Reporting Standard by the Organisation of Economic Co-Operation and Development, a greater strain will be placed on PE firms and their compliance functions.

Panama Papers!

We couldn't finish this month’s House without a mention of the Panama Papers, perhaps the most significant leak of information this century. Law firms and investigation specialists have been contacting us recently reporting an upsurge in business and a desire for more investigations staff.

House Issue 12, March 2016

WELCOME

...to the 12th edition of House and for the first time since this the launch of this publication, nearly 2 years ago, we are feeling a little cautious about hiring in certain sectors.There are still great opportunities for regulatory professionals but they are less visible and the need for a headhunter becomes greater...

Cuts in compliance...

A phrase we thought we would never hear is becoming a common whisper amongst the investment banking fraternity. Whilst it was important over the last 3 years to ensure the business was properly supervised, banks are now reassessing the size of their teams, especially as the front office at many banks has reduced significantly. Technology is also taking on a lot more of the burden, so we anticipate some ‘right-sizing’ of the larger compliance teams in the next few months.

Consulting. Not so fun after all?

We reported this time last year on the proliferation of moves from in-house to consulting firms and predicted that it might be a difficult move for some to adapt to a target driven environment, and it seems that may have been the case as several senior AML and Compliance professionals return to in-house positions. On the flip side, we have heard of some great success stories where AML and Compliance professionals have proven excellent business developers, offering a refreshing alternative to the traditional ‘sales’ approach.

Conduct and Ethics

Regional Heads of Conduct and teams below them have become commonplace at most large corporates and financial services firms across APAC. Recent high profile scandals at FIFA, Volkswagen and at many Investment Banks have put Conduct and Ethics to the top of most board agendas. They are also taking on more and more responsibility for setting the tone of an organisation and performing a key role in any culture change.. Reputational risk and ethics are key to this. The scrutiny of the financial services industry continues unabated, and through advances in technology and social media platforms, there is no sweeping bad behaviour or conduct under the carpet. Conduct and Ethics is a key deliverable for boards now. Resistance is futile.