Insights

Compliance

COMPLIANCE MARKET COMMENTARY, Q2 2017

• Article by BRUIN Financial

COMPLIANCE MARKET COMMENTARY, Q2 2017

MARKET OVERVIEW

High volumes of recruitment within compliance have continued from Q1 and throughout Q2 particularly within asset management. Despite hiring being a key focus in Q1 for many of our buy-side clients the levels have remained fairly consistent throughout the quarter. On the whole bonuses were received well and the need to retain strong compliance staff seems to have been acknowledged.

BRUIN continues to host topical breakfast seminars and at the beginning of Q2 held a breakfast forum to explore and discuss the impact of MAR on buy-side firms. The event was attended by senior compliance professionals from some of the largest asset management houses in the UK, and was chaired by our speaker David Berman from Quinn Emmanuel.

Such regulatory specialists remain in high demand, and the market remains candidate driven. Hot topics such as market abuse and MIFID II remain high on company agendas, resulting in increased demand for candidates with these skill-sets. However, some firms with a more conservative view of market volatility, have shifted towards hiring candidates on fixed term contracts.

Outside of London the compliance market has picked up significantly over the last quarter. HSBC UK ramped up recruitment to continue growing their head quarters in Birmingham, as well as maintaining steady growth  in their Edinburgh offices. Overall the positions that have come out to the regional market have been more complex year on year and we have noted that demand has increased for more exotic roles which up until a few years would only have been located in London.

Regionally, the market is far more role driven which is having a knock on effect of drawing candidates out from London, whether to make a move back home or for better work life balance.

Role profiles

Asset Management – With increasing pressure from the FCA, buy-side firms are looking to bolster their compliance function as upcoming regulations start to take effect. Firms are looking to hire individuals with more specific compliance experience as the buy-side transition from more general compliance teams to ones that have SME (Subject Matter Expert) knowledge across different areas of compliance is becoming more apparent.

Compliance Advisory – An essential part of any compliance team, the compliance advisory space has become the most in demand area, not just for clients, but also for candidates looking for front office exposure. With this in mind, firms have started to move away from like for like experience and started to be more flexible on the candidates background as the pool of candidates is quite niche. A slight increase in front office or product advisory roles has been noticed as individuals with SME product knowledge are in high demand. Due to this, candidates from a sell-side background with the necessary product knowledge are being invited to interview.

Guideline Monitoring – Similar to the compliance advisory market the guideline monitoring space has continued to be buoyant. With firms looking to implement more robust systems, candidates who cover guideline monitoring and coding have become essential to buy-side firms.

Compliance Monitoring – Compliance monitoring has become a core feature of our clients’  hiring requirements. Candidates with experience conducting the full end to end processes of reviews are becoming an essential skill set to buy side and sell side firms alike. With compliance monitoring candidates aware that they are in demand, they have been able to secure above market rate increases. But it is the clients who have been more flexible in terms of a candidate’s experience conducting a review, rather than their background, that have been the most successful in filling positions.

Investment Banking

With the majority of teams at full capacity and the FCA turning their focus to the buy side, banks have been prioritising niche and more complex roles to complement their teams, having already built up the skill sets for core function.

Advisory – Within sell side advisory teams, candidates with niche product knowledge across derivatives, e-trading and US securities have seen a larger volume of roles as clients look for more intricate market knowledge to enhance their teams. With the specialties needed these roles have inclined to be Senior VP and Director level individuals rather than junior candidates.

Monitoring – Although the sell-side clients have not seen an escalation in requirements what has been in demand is the need for compliance monitoring candidates. As candidates have been able to make the cross over from sell-side to buy-side, banks have started to follow the market trend and look to the fundamental  skill set of conducting full lifecycle reviews as the predominant need rather than line of business exposure.

Regional Recruitment

Within the Midlands market HSBC continue to grow their financial crime teams across audit, GRA, policy and monitoring and testing mainly in Birmingham and Edinburgh. We have also seen a small number of regulatory compliance roles based out of Birmingham; however the majority of these roles were filled with internal moves.

Deutsche Bank has shown considerable growth in their compliance area with no signs of slowing down, making them one of the most competitive and sought-after organisations to work for in Birmingham. They have built out their financial crime department significantly as well as their surveillance space, with a number of other positions coming through within technology and change management within the wider compliance team.

Across the North West there are of course firms who have opted to maintain their compliance teams  in London due to the demand on regulations. Having said this, the Co-operative Bank and RBS continue to develop their compliance space at all levels. Furthermore, current employees at these banks are trying to move internally into the compliance space, as there is uncertainty for some of the more vanilla functions, with the potential for these to be offshored.

Over the last few years, we have noted that as the banks offshore back office roles to locations such as India, it has effectively created space for more complex roles in cities such as Birmingham, Manchester and Edinburgh. This competitiveness has definitely challenged the Financial Services market in London.

PREDICTIONS

Hiring managers continue to speak about the upcoming MIFID 2 regulations and the need for additional contractor resources in this space. We also predict further competition for compliance CASS candidates who are sought out in both temp and perm markets.

Looking forward, candidates with asset management regulatory compliance experience will continue to be in high demand leading into Q3. We also envisage that for the remainder of the year, job volume will remain consistently high.

Volumes for Q1 and Q2 have predominantly been on the buy-side and we expect hiring volumes to increase for the sell-side.  As we approach the summer months, it’s important to maintain recruitment momentum to secure the strongest most sought after candidates.