Insights

Compliance

FINANCIAL CRIME MARKET COMMENTARY, Q3 2017

• Article by BRUIN Financial

FINANCIAL CRIME MARKET COMMENTARY, Q3 2017

MARKET OVERVIEW
In the midst of a turbulent summer in which political uncertainty dominated the headlines, the London Financial Crime market picked up dramatically following a less than impressive Q2. Across the industry, Financial Crime roles in London increased by 38% in comparison to the previous quarter and as predicted in previous commentaries, the demand by Asset Managers for FCC specialists increased dramatically with 45% of these roles released sitting in the buy-side.

With many firms in the industry looking to become more cost-efficient, contracting opportunities in the market continue to decrease with organisations looking to move away from paying expensive rates. This was reflected in the fact only 18% of Financial Crime roles released in Q3 were contracting roles paying a daily rate, with the rest being a mixture of permanent and Fixed Term Contracts. On this note it is worth mentioning that Fixed Term Contracts are becoming more prominent in the market, with the uncertainty surrounding Brexit being sounded as main reason for the increase.

Regional recruitment continued to ride an increasing wave of momentum as Q3 saw a 25% increase in Financial Crime jobs in hubs outside of London. The sustained commitment to cost-cutting from the larger Investment Banks has meant the demand for Financial Crime candidates in regions such as Birmingham, Edinburgh and Manchester remains as high as ever. Whilst the roles are being created, its worth noting that Q3 represented the slowest quarter this year in terms of numbers when looking at those candidates who relocated from London to the regions. This could be due to time of year as we head towards Christmas; but could also be a sign of an increase in the talent pool available in the regions with local candidates being successfully selected for the role by comparison to their London peers.

ROLE PROFILES
Asset Management – Financial Crime roles in the Asset Management Industry continue to rise with increasing regulatory scrutiny, and 4MLD challenges the main reasons driver. As these firms have small teams, or no incumbent FCC specialist in some cases, candidates with a good knowledge of multiple FCC disciplines (AML, EDD, ABC, Sanctions) are heavily sought after given the wide range of responsibilities in these roles, with anywhere between 3 – 7 years experience.

Financial Crime Analytics – A relatively new area within FCC, the analytics space is becoming more prominent particularly at the larger Investment Banks. As more financial crime roles become automated, analytics teams are built across the country to programme systems to automatically detect red flags within AML and Sanctions. Whilst expensive in the short term, building out these teams is cost-efficient long term as automated roles start to take over the more operational aspects of Financial Crime. We originally saw these roles released in London, but over the last few months we have noted demand in locations such as Birmingham, Sheffield and Edinburgh.

AML Advisory – Whilst FCC Advisory roles continue to be recruited into London in the main, we saw an increase in the level of hiring both in London and the regions. Interestingly, those roles which are being recruited into London are looking for candidates with AML Advisory experience around particular products / business lines. In particular we have seen the demand for Security Services/Custody, Trade Finance and Global market products increase.

This highlights the fact that these FCC Advisory candidates in London need to be bringing more than Financial Crime regulatory knowledge to the table – they also need to have solid product knowledge and experience. Conversely, roles in the regions don’t seem to require specific product knowledge alongside Financial Crime knowledge and instead look for AML subject matter Experts.

PREDICTIONS
Recruitment in London will undoubtedly be impacted as we head towards the end of the year and impending bonus payments. A couple of the larger Investment Banks have undergone well-publicised restructurings in their Financial Crime teams over the last 12 Months and not released as many FCC roles as they have previously. Due to these firms being big employers in the industry it could be argued that this has affected the FCC market generally. However, as these restructurings show signs of approaching completion there may well be a flurry of hiring activity from these firms before the end of the year.

We anticipate that the regional FCC market will continue to be buoyant in line with previous years.