The emergence of the compliance market across Asia

The perception of compliance within the Asian market has historically been as a ‘tick box’ exercise. However, over the last three months an increasing number of businesses across a variety of industries are now understand the purpose of the compliance function in relation to the increasingly strict regulations as well as seeing the commercial benefits it can bring.

Despite the well documented number of redundancies over the last three months, global banks are still hiring compliance experts across both Hong Kong and Singapore. The strict regulations that are being put in place within this industry are resulting in banks wanting to hire products advisory specialists and regulatory compliance experts. The asset management and insurance industries are where we are also seeing the compliance function gaining more importance. These firms continue to allocate resources to hire compliance subject matter experts to strengthen their teams and partner with their business stakeholders.

We have noticed a number of Financial Crime Compliance teams within global banks and private banking sectors continuing to expand with new hires dealing predominantly with remediation projects and private banking client due diligence projects. Banks with established AML remediation teams will risk losing their talent to banks who can pay premium to build their newly set up AML remediation teams. Private Banks continue to expand their AML/KYC/CDD teams by hiring junior level candidates to backfill their officers to associate level roles. A selective few asset managers have decided to take out their AML/ FCC piece to standalone teams, similar models to banks.

Private Banks, on the contrary, have slowed down on hiring for their regulatory compliance teams, but products and suitability experts are still in high demand. Another sector that is seeing a reduced increase in team sizes is within Asset Management where we are noticing mainly replacement hires.

In Hong Kong, the recent backlog of suspicious financial transactions in the industry has been named as the main reason for the upsurge in reports of money laundering and terrorist financing with an average of 200 reports every day this year. “Bank and financial institutions are required to clear the backlogs and hence they have injected substantial resources in expediting the filing of suspicious transaction reports, which resulted in an upsurge of cases received by the JFIU,” one source said.

As a result of this, most of the major financial institutions have made efforts to improve their anti-money laundering and counter-terrorism financing departments. HSBC Asia-Pacific vice-chairman and CEO Peter Wong Tung-shun in September said the bank had hired 7,000 compliance officers globally to handle the tighter vetting process.

In Singapore, this new strict process is being enforced at the highest level with the Monetary Authority of Singapore (MAS) establishing a dedicated anti-money laundering department. This new department will begin to increase its enforcement action following shutdown of private banks in Singapore. Working with the Commercial Affairs department, this new departments will investigate in order to “deter poor controls or criminal behaviour” as mentioned by Ravi Menon, Managing Director of MAS.

Candidate remuneration

Candidates are very cautious about making moving to a new company as they do not want to forfeit their bonuses which are just around the corner. However, for those that are willing to make the move, Local and PRC based banks are actively hiring to compete with global banks. Candidates can expect solid pay increments and potential buy out on bonuses.

As a general rule across the compliance sector, candidates can expect salary increments of 15 to 20%. We expect this to continue for the foreseeable future as several banks informed us that the search for candidates with risk and compliance skills remain high and will extend to Q1 of 2017.

However, recruiting compliance professionals is not easy due to limited and small talent pool available in HK and Singapore. Especially given the time of the year, hiring managers are advised not to be overly selective or else they will end up losing their headcounts. Those who do have experience in the banking sector are at a premium and can command an above average remuneration package.

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