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FINANCIAL CRIME  MARKET COMMENTARY, Q1 2016

• Article by BRUIN Financial

FINANCIAL CRIME MARKET COMMENTARY, Q1 2016

Market Overview

In line with the trends of previous years, recruitment across the Financial Crime market had a slow start to Q1 before having a stronger finish to the quarter – although it could be said that recruitment levels are yet to hit those seen in previous years. As expected, not just within Financial Crime but covering the entire Regulatory Compliance umbrella, BRUIN saw a number of vacancies placed on hold, or cancelled altogether, as Banks and Asset Managers across the city reassessed their headcount at the beginning of the year. Alongside this, bonus period hit the market which unsurprisingly resulted in many candidates holding off on their job search until this had been paid. With factors affecting the market on both the candidate’s and client’s side, recruitment activity across the market was quieter for the first part of the quarter. However towards the end Q1, we started to see more vacancies being released to the market as decisions around headcount were made and approvals finalised.

2015 saw the leading Banks and Asset Managers continue to invest into their Financial Crime Compliance teams at all levels in order to meet increasing regulatory demands. Whilst demand for critical hires remained constant in London in comparison to previous years, 2015 (and Q1 2016 following that) has seen a dramatic shift in regards to the more operational roles as the leading banks outsource to regional locations. Reflecting on activity we have seen over Q1, it seems this strategy will continue to be employed by the larger organisations as they look to the regions due to cost-cutting reasons or ring-fencing/regulatory reasons. The likes of Chester, Bournemouth, Sheffield, Birmingham, and Belfast continue to have investment placed into the low-cost centres in these locations. Whilst business facing, advisory positions (deemed critical hires) continued to be recruited in London; KYC, Sanctions Screening and FC Surveillance amongst other operational type roles are those which are appearing to be relocated.

Regarding the contract market, Financial Crime has followed trends from Q4 of 2015 and remains extremely quiet. 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.

It is worth noting that whilst firms continue to develop their direct recruitment model, the fact that BRUIN have continued to see an increase in the volume of permanent Financial Crime Compliance roles is testament to the fact that specialist agencies will be increasingly required.

Role Profiles

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

Head of Financial Crime / MLRO – H2 2015 saw a lot of movement, particular within the upper echelons of the industry at MD/Director level and those holding the CF11 title and this has continued into Q1 of 2016. The likes of Deutsche, Credit Suisse and BNP Paribas have each recruited new holders of the CF11 title.

Sanctions – With the likes of Credit Agricole and BNP Paribas being hit with fines totalling in excess of $9bn by the US regulator for sanctions breaches last year, it comes as no surprise that there is a continued increase in demand for candidates within the Sanctions Advisory space across the industry. An ever changing regulatory and complex cross-jurisdictional landscape including the likes of Iran, Russia and Ukraine means good candidates in this area are highly sought after and salary increases of up to 30% have be seen because of this. Due to there being a small pool of pure sanctions advisory candidates, we are starting to see a higher number of moves from the Public sector (i.e. HM Treasury) into industry as candidates from this area tend to possess strong Sanctions policy knowledge, whilst the banks recognise a need to be more flexible.

FIU / Investigations – An area which is showing signs of a particular increase in investment across the larger banks is in the Investigations / Financial Intelligence space with a number of the “bulge bracket” looking to upskill this area. It has also became apparent that, unlike years previous when this was an are less known within the banks, organisations are no longer ideally looking to the Police Force to source candidates in this space; instead preferring source a like-for-like candidate at another leading bank who has direct relevant experience. Whilst we saw a continued demand for investigation and report writing skills for those roles at Analyst/Associate level, we saw a number of roles at VP and Director Level where there is a more strategic focus to the role in order to implement a strong FIU framework / culture within the bank.

Predictions

With the majority of bonus packages within industry now finalised, we are expecting this to be the catalyst for movement within the market during Q2 as candidates now look to re-enter the market.

With the ever increasing demand for candidates we expect that salaries within the industry will continue to increase, particularly with those roles which have an advisory / business facing focus. In addition, the market continues to be candidate driven, and those candidates with strong skill-sets will often be involved in multiple processes resulting in the possibility of more than one job offer at a time. 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 continuing to witness 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 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 and regional recruitment becomes a larger focus. In Q2, and 2016 moving forwards, we’re expecting another busy year in Financial Crime Compliance across the United Kingdom.

BRUIN News

We recently held another successful breakfast seminar on Sectoral Sanctions, with a particular focus around Russian Sanctions within the Investment Banking space.

Chaired by Martin Johnson, Director General of The British-Iranian Chamber of Commerce, the breakfast provided an opportunity for bank representatives to gain clarity over any grey sanction matters in what proved to be an extremely productive and engaging debate.

On the back of feedback gained from this, our next event is currently in the works and is looking to be focussed around the ABC piece. Whilst in early stages of planning, if you wish to be present, or have any specific areas that you wish to hear about, please do get in touch.

For more information about our compliance breakfast seminars please contact one of our consultants.