Market Update 2022 Q1: Financial Crime, Risk & Compliance

4 months ago Kelly Fordham, Director

Financial Crime, Risk & Compliance 209

​Financial crime

2021 was a big growth year for a number of fintechs due to increased demand for their new and existing products, and their navigation into new markets. Similarly, we’ve seen volumes spike at some of the international banks due to candidates moving on to bigger roles.

Criminals are getting smarter, technology is advancing and as such, money laundering and fraud activities are ongoing. Our clients are looking to build out best in class teams to prevent financial crime, which has meant a focus on recruiting investigatory and intelligence candidates. The FCA has launched a number of s166 reports and given recommendations on essential improvements to firms’ first line practices, to ensure a more robust onboarding procedure and transaction monitoring practice.

Companies are having to remediate their customers or clear backlogs relating to transactions or payments. There has been volume hiring for KYC EDD specialists, transaction monitoring filtering specialists, AML investigators, sanction experts and screening analysts. Clients are also looking for a more financial crime generalist background for their second line functions, with most asking for experience in risk assessments, risk frameworks, horizon scanning, advisory, assurance and policy, all wrapped up into one role.

This year, early indications are that the regulator will pay even more attention to the fintech sector, ensuring that their FC controls are robust and their customers are treated fairly. Many teams are still understaffed in the banking sector, which will ultimately drive one of two things: movement or growth.

Risk management

The market continued to be dominated by permanent hiring throughout 2021. Prudential risk hiring has been cyclical, becoming busier when companies are reviewing the ICAAP/ILAAP documentation. Market risk has been very busy at the more junior end of the market, particularly in FX, commodities and equities. Operational risk and enterprise risk professionals have been in high demand in the last year, mostly within the payments, fintech and startup sectors.

Remote vs home working is one of the first questions on candidates’ lips, and some banks (mostly branches or subsidiaries of overseas banks) have struggled to react, going back to five days a week in the office. Overall, companies who are open to employees being flexible are most likely to attract and retain talent.

Investment banks, brokers and some funds performed very well in the second half of 2021, so bonuses will be back in 2022. The commodity market was very busy last year, so a lot of traders and brokers have hired across operations and market risk management. Retail banks have been actively hiring in credit risk and operational risk.

Due to the competitiveness of the current market, we expect this busy period to continue. The crypto market is likely to attract a lot of the top talent at the junior and senior ends of the market. Just like we saw with the tech revolution a few years ago, banks and other FX firms will have to fight hard to attract and retain the best employees.

Compliance

2021 was extremely busy for hiring across all key areas of compliance, with a large influx of permanent roles at all levels to deal with the everchanging regulatory landscape, agile working and changes in IR35, whilst also supporting business growth. As we progressed through the year, we saw the market shift from candidate heavy to job heavy, which in turn saw top talent coming at an increased cost and bonus buyouts becoming more common.

Many firms hired within advisory, core compliance, compliance monitoring and marketing/distribution. We are also starting to see more specialised roles within compliance functions that are focused on ESG compliance, European compliance, business management and product advisory. The FCA have once again played their part in the hiring market with increased pressure for designated SMF holders on the ground here in the UK and Europe, new ESG and sustainability disclosure papers and the Investment Firm Prudential Regime (IFPR) which came into play as of 1st January 2022, applying to all UK MiFID investment firms.

Despite the implications of IR35, the contract market remained buoyant throughout 2021. This is in direct correlation to the increase in permanent hiring across compliance. Considering the more business as usual nature of compliance roles and functions, the majority of roles were falling inside IR35, with contractors turning to PAYE and umbrella routes for payment. The roles outside IR35 were project focused, delivering specific changes or updates such as MiFID II and SMCR, or assessing and improving risk and control frameworks.

We anticipate that flexible working policies (or lack of them!) will continue to cause a stir in the hiring market across compliance in 2022, and we also look forward to an increase in permanent senior-level hiring once candidates have received their bonus pay outs in early 2022.


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