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Compliance

FINANCIAL CRIME  MARKET COMMENTARY, Q2 2016

• Article by BRUIN Financial

FINANCIAL CRIME MARKET COMMENTARY, Q2 2016

MARKET OVERVIEW

Permanent
Q2 tends to be one of the busiest quarters in the recruitment year as bonuses are paid and roles approved. This year a number of external factors have seemed to affect the market; most notably the uncertainty surrounding the EU referendum. However now that the decision has been made, the general consensus is that hiring can become a greater focus, with many clients advising that the second half of this year should be significantly busier from a recruitment perspective.

As predicted in our Q1 Market Commentary, we saw an increase in hiring in the Asset Management industry, and firms such as Northern Trust, JP Morgan, Blackrock, M&G and Wellington Management released requirements for Financial Crime candidates. Whilst a majority of these roles were due to attrition, a number were growth hires and it is becoming increasingly evident that strong Financial Crime candidates within this sector are highly desirable and in relatively short supply by comparison to their banking counterparts.

Whilst several organisations on both the buy and sell-side have begun to invest more heavily in a direct recruitment model, it is evident that the need for specialist agencies remains. In Q2, 71% of the Financial Crime compliance (FCC) roles released to BRUIN were at VP or higher, indicating that niche agencies with strong networks at that level are heavily relied upon to fill senior roles. Having a desk dedicated to Financial Crime has ensured BRUIN is able create, build and develop these networks and remain a leader in Financial Crime recruitment.

Contract
In sharp contrast to the end of 2015 and Q1 of 2016, the contract market within Financial Crime has seen a significant increase in activity – particularly within the KYC space as banks and asset managers continue to invest to ensure client files are meeting regulatory standards. We anticipate this to be an area of growth over the next 2 years, particularly following the result of the referendum as clients respond to the demands of regulatory reform. Contract roles that offer longevity / an option to be extended are particularly attractive and we are seeing an increasing number of candidates open to contracting.

ROLE PROFILES

Sanctions
The busiest area within Financial Crime has once again been within the Sanctions space. Whilst operational roles with a focus on sanction screening seem to be the greatest victims of near-shoring within the bigger banks, business facing advisory candidates continue to be in large demand for roles based in London. HSBC, Macquarie, Commerzbank, Barclays, Credit Suisse and Bank of America are just some of the banks which have recruited into this space. With banks now looking for Sanctions experts to provide strategic direction, a number of Director level roles with regional oversight have been released. It is also worth noting that not it is not just the banks that have upskilled their Sanctions teams; Asset Managers and Insurance firms have also been active in the market this quarter. With the ever changing global environment, Russian Sectoral Sanctions and the Iranian Sanctions being lifted at the beginning of the year, the demand for VP and above candidates has never been higher.

Anti-Bribery and Corruption
The ABC space has seen plenty of movement in the last few months as regulations in this space become a hotter topic for organisations and the FCA alike. Interestingly, ABC falls within different areas of compliance as some banks structure themselves differently from their competitors. Whilst ABC, in the main, is considered a part of Financial Crime; in some organisations it can fall outside that remit and be more aligned to employee/central compliance. Whilst it’s expected that further down the line ABC will be considered a discipline of financial crime, and compliance structures will be reflective of that, it seems uncertainty remains in what is still a relatively new area. Candidates in this space are in relatively short supply and high demand.

KYC
Whilst being the area of Financial Crime susceptible to being near/off-shored, we have continued to see volume of KYC roles in the market. Roles in this space which go to agencies tend to be for good candidates coming from a leading bank with high-risk client/entity exposure as organisations look to ensure they are meeting regulatory requirements on their higher risk customers. We’ve seen a significant increase in demand for those candidates with KYC Review/Refresh/Quality Control experience as firms ensure existing clientele are compliant. Whilst we have seen some movement in the permanent market in this space, most roles seen this quarter have been on a temporary basis paying a daily rate.

PREDICTIONS

Whilst the fallout from the referendum will undoubtedly cause uncertainty in the market, we fully expect compliance to continue to be a priority area of investment. From a regulatory point of view this will involve an assessment of which regulations are likely to be affected, and whether the UK now seeks to establish a new EU regulatory framework to maintain access to EU markets, which will demand specialist expertise.

In the short term, however, we believe the market will continue as usual; this includes the continued commitment to upskill their regional hubs as organisations look to near shore their operational aspects to low-cost centres. Knowing this would be a focus, over the last 18 months our Financial Crime desk has committed to building strong networks in these locations with clients and candidates alike having helped to recruit in locations such as Bournemouth, Birmingham, the North-West and Scotland.

MARKET MOVES

  • Macquarie : A new MLRO will be joining the bank shortly after moving over from Investec. Investec have backfilled the MLRO position internally.
  • HSBC – A senior FCC individual will be making the move from RBS to HSBC in the coming weeks to head up Financial Crime at a European level. RBS have been in the market to backfill the vacancy.
  • ICBC Standard Bank – Have been in the market for a few months for a new MLRO after Sarah Botwood left the bank. They have recently hired Thea Fforde to fill the void on a contract basis
  • Credit Suisse – Have recently had the DMLRO from ICBC Standard Bank join in a senior Financial Crime Investigations capacity.

For more information on the compliance recruitment market please contact one of our consultants.