Insights

Compliance

COMPLIANCE MARKET COMMENTARY Q4, 2015

• Article by BRUIN Financial

COMPLIANCE MARKET COMMENTARY Q4, 2015

MARKET OVERVIEW

2015 continued to be an extremely busy year within the Compliance space. As the levels of regulation and enforcement increased, so did the size and scope of Compliance teams in an attempt to satisfy the requirements of the Regulator.

Recruitment picked up significantly in Q4 by contrast to the end to Q3, with many firms working to complete their hiring plans for the year. However activity did reduce in the latter part of Q4, typical for the time of year, with many firms looking to reassess their recruiting requirements early in 2016.

Similarly, there continues to be a shortage of technical specialists looking for new opportunities for two reasons: a) most candidates will have accrued a decent bonus for the year, so will be holding on to receive that in Q1 of 2016; b) certain areas within compliance, such as Monitoring & Testing, have seen high levels of recruitment in 2015, therefore a large proportion of the market have already moved by this point.

The demand for Compliance Candidates outside of London has gathered momentum throughout the year and this trend looks set to continue. More recently the key hubs of recruitment have been Birmingham, Manchester and Bournemouth. Most of the regional hiring is also happening under the Financial Crime umbrella, particularly within operational roles such as KYC or Onboarding.

In terms of salaries, we have seen a consistently steep incline in basic salaries overall. Analysing placements made by BRUIN during Q4 from candidates moving from one permanent role to another, there was a 23.78% increase on average. Interestingly, on the Investment Banking side the increase came in at 25.21%, whereas Asset Management salary rises were slightly lower at 22.35%.

ROLE PROFILES

Whilst there has been steady levels of recruitment across Compliance, there are some areas that have been particularly busy:

Banking
Financial Crime: Following on from Q3, the Financial Crime space has remained buoyant and teams continued to expand. There has been a trend within the Investment Banks to grow the more operational functions of Financial Crime in regional locations, with less focus solely on London. At the other end of the spectrum there appears to be a drive to ‘up-skill’ AML teams within the banks, in particular at Director level. In that sense the appeal to find front-line advisory candidates is stronger than ever.

Product Advisory: The demand is still very strong for front office advisory candidates within Investment Banks, with many firms requiring specific experience as they continue to enhance their advisory teams. The busiest area in Q4 was covering the FX piece, with most hiring taking place at VP level.

Monitoring & Testing: There is a continued demand for experienced desk based monitoring candidates and this has been a trend that has remained a constant throughout the year. Many firms are growing their monitoring teams significantly, and it is evident that firms are less particular about industry background, and more focussed on securing candidates who possess a transferable methodology. As a result, it is becoming increasingly rare to see an individual conduct desk/thematic reviews as part of a wider generalist role. This is definitely the area in which we have seen the most recruitment during 2015 as a whole.

Asset Management
Financial Promotions: With financial services firms becoming increasingly focussed on better outcomes for investors, there has been an increased emphasis on the quality of marketing materials. Most Houses are currently growing their Financial Promotions teams to reflect this. With such a shortage of good candidates in this space, it is becoming an increasingly lucrative and candidate driven market.

Guideline Monitoring: As predicted from Q3 we saw quite a lot of movement in the Guideline Monitoring world. It was largely candidates with between two and three years experience in their current role that were in highest demand. Firms have also increased their expectations, and ideally want candidates with coding experience in addition to covering pre and post trade monitoring. The majority of firms are still flexible around the systems knowledge of candidates, as most systems-skills are perceived to be transferable.

The majority of bonus packages are being paid out towards the end of January and start of February, so we are expecting this to be the catalyst for movement within the market during Q1 of 2016. With the ever increasing demand for candidates we expect that salaries within the industry will continue to increase, particularly in niche areas such as Product Advisory in banks or Guideline Monitoring in Asset Managers. In addition, the market continues to be candidate driven, and those candidates with niche skill-sets can often receive multiple job offers when they do start looking. It is therefore imperative that firms move swiftly, and offer competitive packages to ensure that they secure the right talent.

In addition to the above, we are witnessing an increase in the number of counter-offers received by candidates handing in their notice. It is clear that firms do not want to lose their best talent, even within non-revenue generating areas such as Compliance, and are therefore offering large increases in basic salaries and changes in corporate titles as a retention tool.

 

Contract Market
As we have come to expect towards the end of the year, recruitment did slow down in Q4. Financial Crime remained extremely quiet but with such an abundance of candidates on the market in this space, most vacancies seem to be filled internally or by institutions’ direct recruitment teams. Buy-side Compliance recruitment stayed relatively steady especially in the Financial Promotions area, with this being a very highly sought after skillset.

After the huge increase in contract rates during 2014, rates in 2015 have continued to grow with candidates now having an increasing number of offers on the table at any one time. Regulatory Change roles are now paying in excess of £1000pd and Product Advisory positions continue to attract candidates at higher rates around the £800pd mark.

PREDICTIONS

The majority of bonus packages are being paid out towards the end of January and start of February, so we are expecting this to be the catalyst for movement within the market during Q1 of 2016.

With the ever increasing demand for candidates we expect that salaries within the industry will continue to increase, particularly in niche areas such as Product Advisory in banks or Guideline Monitoring in Asset Managers. In addition, the market continues to be candidate driven, and those candidates with niche skill-sets can often receive multiple job offers when they do start looking. It is therefore imperative that firms move swiftly, and offer competitive packages to ensure that they secure the right talent.

In addition to the above, we are witnessing an increase in the number of counter-offers received by candidates handing in their notice. It is clear that firms do not want to lose their best talent, even within non-revenue generating areas such as Compliance, and are therefore offering large increases in basic salaries and changes in corporate titles as a retention tool.

As previously stated, many of the banks are looking to focus on building their regional hubs across the UK. This trend will be followed by BRUIN as we continue to grow our network outside of London. In 2016 we’re expecting another busy year in Compliance across the United Kingdom.