Apr 20 2017 Patricia Lee, Regulatory Intelligence, Thomson Reuters
Compliance hiring in Singapore has shown signs of slowing and this trend looks set to continue this year as financial institutions tighten budgets while aiming to digitise certain functions. But specialised areas will continue to drive demand for compliance professionals, recruiters said.
Despite continuous retrenchment in the banking industry with the large international banks shrinking their Asian operations in the last five years, compliance hiring in Singapore has remained strong. Particularly in the last two years — which saw some banks being imposed hefty fines for regulatory breaches — strengthening certain specialised functions or areas which require specialist knowledge such as anti-bribery, financial crime compliance and anti-money laundering functions has been the main focus for many financial institutions.
Compliance hiring slows, strategic hiring
The start of this year saw a slowdown in hiring activities as most banks have fulfilled most of their compliance capacities, while exploring digitisation of certain functions such as transaction monitoring and market surveillance, said Wei Yolk Loke, senior consultant, compliance at Robert Walters Singapore.
Kyle Blockley, co-founder and managing partner at KS International, which has operations in Singapore and Dubai, said financial institutions will be more strategic in their hiring this year rather than merely fulfilling headcount.
“Due to pressure to get their house in order, financial institutions need people with knowledge and strong team experience rather than fulfilling headcount for the sake of it. They need to manage the team more effectively. These are more middle management roles,” he said.
Uncertainty posed by Brexit and the election of Donald Trump as U.S. president means most international and domestic banks alike are cautious in their hiring as they take a wait-and-see attitude, according to Helen Ng, co-founder of ANSA Search in Singapore.
Local considerations, including consolidation in the private banking sector, have also affected compliance hiring, but Singapore remains strong as a leading financial centre in Asia, Ng said.
“Banks’ hiring has slowed down and there are very few newly-created roles. Most of them are replacement positions mainly at manager, assistant vice president and vice president levels. There are a couple of senior roles out there, but some of these positions at the large financial institutions were not replaced,” she said.
Retrenched or not replaced
Ng cited a head of compliance role for the FICC (fixed income, currency and commodities) business unit at a European bank as an example where the position was not replaced following the resignation of the head of compliance for FICC. Instead the responsibilities of the head of compliance were split among the team. The regional head of compliance at Amex was also said to have been retrenched. But Ng is hesitant to generalise these as trends.
“It really depends. Some head of compliance roles at some banks which are critical, or if there is not enough staff to absorb the responsibilities, will still be replaced. The big words now are ‘cost containment’. Profit margin has declined and so banks are looking to cut costs. They are definitely cautious in their hiring. Nobody is throwing money [to hire compliance professionals],” she said.
Financial crime compliance and AML roles in demand
That said, demand for certain types of compliance positions remains. Financial crime compliance is one area where banks will continue to hire in the light of the intensive regulatory landscape in the city-state and the Monetary Authority of Singapore’s continuous focus on AML, Ng said.
Roles in such areas as advisory, AML investigation, fraud investigation, KYC, customer due diligence, compliance assurance, compliance testing and those in control room functions will also remain in demand.
Two sectors which have seen a fair amount of hiring activities are the smaller financial institutions such as financial planners and the Big Four, which are mostly looking to fill advisory roles, according to Blockley.
Specialised roles sought-after
Candidates with investigations and research backgrounds are also much sought-after as more banks expand their financial intelligence and business intelligence units, Loke said. Outsourcing compliance, an area which requires candidates with specialist knowledge, is another bright spot following the implementation of the “Technology Risk Management Guidelines” in 2016.
Compliance professionals with IT knowledge, particularly those with basic coding skills or good systems knowledge, will tend to stand out. Those well-versed in the Foreign Account Tax Compliance Act, those who are knowledgeable about how the International Swaps and Derivatives Association works and those with control room knowledge are also in demand, Loke said.
Across all levels, hiring activity at banks took place mostly at the middle levels, according to Loke.
Roles that build a relationship with MAS
Banks in Singapore are also looking to hire more management roles with a view to building a stronger relationship with MAS to help them have a better sense of what new regulations will be rolled out this year, Blockley said. Such roles typically require local talent well versed in MAS regulations with prior experience of working with the regulator.
Most banks now prefer local talent largely because of the Singapore government’s push for more Singaporeans to be hired, coupled with the increasing difficulty in obtaining employment passes for foreign talent, according to Blockley.
“The first thing 99 percent of the organisations we spoke to asked for was local candidates. It is more difficult to obtain [a] work permit now. We also have to report the nationality of candidates who took up the positions to the Ministry of Manpower,” he said.
Contract versus permanent roles
Cost controls at banks have led either to some positions not being replaced or failure to obtain approval from their head offices. This has resulted in some compliance positions, mainly junior positions specialising in KYC and customer due diligence, being filled on a contractual basis, Ng said.
Banks, however, tend to offer permanent positions for those at assistant vice president and vice president levels as well as for advisory roles. Senior positions such as head of compliance remain scarce.
“At this level [senior positions], candidates are very careful and are more concerned about stability. There are very few such positions in the market, so heads of compliance don’t move easily,” Ng said.
Gone are the days when compliance professionals moved jobs just to secure a better pay rise. Increasingly they are looking for stability in this current uncertain environment, which reflects a change in mindset and attitude, Blockley said. He cited an example whereby a candidate was offered a 25 percent increment for a new role but turned down the offer in the end.
While there has been quite a fair bit of movement among compliance professionals in the asset management sector, they were mostly replacement roles, according to Loke.
Fintech offers opportunities
One area which offers potential job opportunities for compliance professionals is financial technology, which has proved to be particularly attractive to those specialising in financial crime compliance. Financial crime professionals who have been working under an intensive regulatory environment are looking for a change and they are seeking opportunities in the fintech space, Ng said.
“They are moving to roles which leverage their experience in financial crime compliance. Some have moved to fintech start-ups, completely out of the traditional banking environment,” she said.
Dearth of compliance professionals
Despite the intensive hiring of compliance professionals in the last five years, the talent pool in Singapore has hardly grown. While business-as-usual roles in areas such as regulatory compliance, investment banking compliance and client due diligence are mostly filled by local talent, there is a shortage of talent in niche areas such as IT compliance, outsourcing, control room and anti-bribery and corruption.
“It is particularly challenging to find local talent in those areas. Hence hiring managers are more open to hiring foreign talent,” Loke said.
Even with the dearth of compliance professionals, banks remain cautious and selective in their choice of candidates. For instance, former compliance staff at Swiss private banks BSI Bank and Falcon Private Bank were shunned after the two banks were ensnared in AML scandals related to troubled Malaysian sovereign wealth fund 1MDB which resulted in the revocation of their licences.
Recruiters who have tried to place some of the former employees of BSI Bank and Falcon in compliance roles at other banks were unsuccessful. Most of them eventually found jobs through their own connections, said one recruiter who declined to be named.
Increments and bonuses
The challenging banking environment has far from dented the pay scale for compliance professionals. A 15 to 20 percent increment is still the norm when candidates move to a new job, a slight decrease from a 20 to 25 percent increase five years ago. Even then it is still considered attractive given the declining profit margin faced by banks.
“That’s because good compliance talent is still hard to find. The really good ones can expect more than a 20 percent pay rise,” Ng said.
Banks are still paying compliance professionals bonuses and they range from two to three months’ salary but that depends to a large extent on individual performance. There is a slight difference between how foreign banks and Singaporean banks pay bonuses, however. Local banks, on average, pay two to three months’ salary as bonuses whereas one to two months is the norm at foreign banks.
|Singapore Compliance Salary Survey 2017|
|Compliance advisory||$60k-$90k||$100k – $180k||$180k-$240k||$240k-$350k||$350k+|
|Monitoring and surveillance||$50k-$80k||$80k-$140k||$140k-$200k||$200k-$250k||$250k+|
|Compliance testing||$40k- $80k||$80k-$140k||$140k-$200k||$200k-$250k||$250k+|
|KYC and client onboarding||$40k- $80k||$80k-$140k||$140k-$180k||$180k-$240k||$240k+|
|Source: ANSA Search Singapore. Currency: Singapore dollars|
- Patricia Lee is chief correspondent, banking and securities regulation, Asia