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FINANCIAL CRIME MARKET COMMENTARY, Q4 2016

• Article by BRUIN Financial

FINANCIAL CRIME MARKET COMMENTARY, Q4 2016

MARKET OVERVIEW

2016 was undoubtedly an interesting year as global political uncertainty  affected financial markets, and consequently, the Financial Services recruitment industry. Whilst the impression post-EU referendum seemed to be one of a short-term confidence and certainty re-entering the City, roles within Financial Crime Compliance in H2 fell 6% in comparison to those available in H1. However, it is easy to see why that impression was formed in the market, as the three months following the referendum yielded a 37.5% increase in roles, compared to the three months prior.

As expected, hiring within Investment Banks continued to be steady as they continually looked to up-skill in both London and other regional hubs across the UK. Whilst HSBC and Deutsche Bank seemed to be the most active in the market over the last year, other banks have also looked to the market as many have undergone headcount increases with their Financial Crime divisions. From a contract perspective on the Investment Banking side there has been a significant drop in roles released in 2016. This is primarily seems to be due to the outsourcing of the FCC function to more low cost areas. As a result of the drop in vacancies there has been a significant increase in competition amongst candidates for roles that are still located in London across all levels of seniority.

With regulations and FCA attention becoming increasingly tightened on the buy-side, it came as no surprised as Financial Crime hires within Asset Managers increased dramatically. In comparison to 2015, last year saw an increase of 66% in specialist FCC positions. These came across all levels  of experience as some firms looked to bring in senior individuals to lead and build out teams heading into 2017, whilst others needed more junior candidates to help support a wider FCC function. It is also worth noting that we are starting to see an increase in roles within the alternative investments space; whilst these roles tend to have a generalist nature due to the size of compliance teams in these organisations, we are now starting to see the AML piece take up a higher percentage of these roles responsibilities.

Role profiles

FIU – With a number of banks focusing on their financial intelligence function, and analytic systems supporting this, we have seen a large number of roles over the last 12 months across FIU encompassing technology, operations and data analytics. Whilst this has been an area subject to some relocation to low-cost centres, it is largely still a function held in London. We have predominantly seen candidates move from consultancies and the Armed Forces into these roles as our clients appreciate the lack of supply of candidates with a like for like skillset at a competitor due to the relatively recent rise of this financial crime area.

Sanctions – 2016 was an eventful year in this space with ever changing OFAC sanction regulations, the Iranian Implementation Day and the creation of Office of Financial Sanctions Implementation within the Treasury. As such, Investment Banks continued recent form and ensured good Sanctions candidates were at a premium in the market. Over the course of last year, we saw a number of moves in which candidates were coming from a legal background and joining global Investment banks as it became clear the in-depth, legal and regulatory knowledge they possessed was becoming favoured over a knowledge of Banking products.

FinTech – The well documented rise of the FinTech industry, and other start-ups within Financial Services, saw BRUIN engage with a large number of new clients who required strong Financial Crime candidates for their new and/or growing compliance teams. With these firms mainly specialising in money transfer, payments or mobile banking we saw a higher demand for candidates with experience conducting financial crime checks in a retail banking environment, whilst also possessing good knowledge of the products offered i.e. Credit Cards, Mortgages etc. With London proving to be the Fintech capital of the world, we fully expect this trend to remain and these firms top continue to look to the market for good candidates.

Predictions

The start of 2017 has already seen a number of financial crime roles within Asset Managers and Hedge Funds released to BRUIN; and we expect this to continue throughout the year. Candidates in this space will become more sought after-skillsets, with those having specialised experience on the buy-side being in a particularly high demand.

From an Investment Banking perspective, conversations around the city have suggested that come bonus period, recruitment within Financial Crime will once again take priority. This will tie in with a number of large Investment Banks currently undergoing well publicised restructuring of their Financial Crime function; and once completed, will ensure the market becomes buoyant once again.

It is worth noting however, that with current market conditions, and political uncertainty worldwide, it has possibly never been harder to predict how the wider industry might unfold this year. What is apparent, whether or not Article 50 is triggered, is that the demand for Financial Crime Compliance professionals will be consistent and those with SME knowledge will be in high demand as regulations may change.

For more information about the financial crime market please contact one of our consultants.