House

HOUSE, Issue 34

Welcome

...to the latest edition of House and Gong Hey Fat Choy! It is the Year of the Dog and we have definitely seen Asia Pacific take the lead in a hiring resurgence amongst regulatory professionals. It seems we were barking up the wrong tree with a perceived slow down, as investment banks, asset managers, law firms, corporates and the consulting sector all continue to hire regulatory experts.

This month we have seen a real push by investment banks to focus on their VP and Director level recruitment; and identifying talent externally.

We have also seen hiring within asset managers really take off globally, but how far will it go?

Finally, we continue to see the top jobs in compliance going to internal candidates, as Goldman appoints from within in Europe, replacing the long standing Charles Eve with joint heads.

Juniorisation

Juniorisation: ‘The process of older and more experienced staff being pushed out of a workforce in favour of younger and less expensive people’ (Collins Dictionary definition).

“Juniorisation” has been a common theme in the front office of investment banks over the last two years, as a combination of technology and cost cutting has forced firms to become more lean. However, has this process started to permeate into regulatory functions.

We have not seen wide-scale evidence of this process yet, however, as compliance and financial crime prevention teams do get smaller we anticipate “juniorsation” will be a factor in shaping the compliance functions of the future. As global and regional heads of compliance are increasingly looking to cut costs, the easiest way to make them is to replace  expensive MDs.

Arion House has seen a definitive move by top tier investment banks to reduce the amount of MDs on their compliance roster, and hiring an MD externally is becoming increasingly rare. Citibank made several cuts at the Director and Managing Director level early last year within compliance and financial crime and this was followed by JP Morgan in the final two quarters.

Asset Management

We have discussed the asset management industry in several editions of House, and it appears that the anticipated hiring war for talent within compliance and financial crime has started. Aviva Investors made two signature hires in Europe; hiring Peter Hazlewood, formerly Global Head of AML at Deutsche and HSBC, as their new Head of Financial Crime Transformation and Lionel Smith as their Head of Compliance, formerly the Global Head of Compliance at RBS and EMEA Head of Compliance at Credit Suisse. We also saw Matthew Pescoe join M&G from Standard Chartered and Andrew Bradley join Fidelity from Unicredit in London.

The move from the sell-side to the buy-side has become an established path and it seems a successful one for regulatory professionals. In conversations with regulators in both Europe and Asia Pacific over the last 6 months, the common theme emerging is that the asset management sector is going to be the number one focus for their supervision.

It seems firms are reacting to this heightened scrutiny and preparing accordingly. We anticipate this focus will continue in 2018 as recent senior hires look to build out teams in both Europe and Asia and the smaller or less proactive asset managers make initial hires in both compliance and AML.

Big 4 Hiring

We have seen a lot of interest from the Big 4 to hire candidates from Associate to Director level in Asia Pacific. It seems they are anticipating a lot of project work in the coming year. Lateral candidates from other Big 4 or niche consulting firms with forensics skills, subject matter expertise in AML, sanctions and anti-bribery and corruption are in hot demand, ideally combined with technology and data analytic skills.

The really ‘hot’ candidates though, are those which can bring industry experience, especially from firms who have been under investigation, a monitorship or consent order and are looking to move into a consulting firm. As regulatory pressures ease off in some of the larger financial institutions, we predict a move from the banking sector to the Big 4 for many AML professionals.

We also anticipate the Big 4 looking at some of the technology firms and vendors for senior hires and even acquisitions to diversify their offering, especially in data analytics and cyber crime prevention and remediation.