Joining the dots - Financial services compliance recruitment

Posted: 16th April 2018

Regulation and regulatory change continue to dominate the recruitment agenda across the permanent and contract market.

The focus on regulatory change has driven a trend of senior hires which have expert knowledge of managing regulatory change and uncertainty while supporting the implementation of policies, procedures and operating models to cope with such change.

The contractor market is also benefitting from a suite of complex and discrete regulatory change programmes which are continuing within the market, as well as ‘business as usual’ demands on resource, further outlined below.

Regulatory change continues to buoy the permanent market

There is no shortage of regulatory change continuing to keep the permanent market buoyant, spanning everything from the General Data Protection Regulation (GDPR) to the Markets in Financial Instruments Directive 2 (MiFID 2), the Payments Services Directive 2 (PSD 2), the focus on the new Insurance Distribution Directive (IDD) and the Fourth Anti-Money Laundering Directive (AMLD4).

This is all underpinned by a changing accountability regime from the FCA which is critical for firms and individuals to consider carefully.

The extension of the Senior Managers and Certification Regime (SM&CR) to all 47,000 regulated financial services firms is one of the biggest regulatory shake-ups since the economic downturn. The core message of the regime is responsibility and accountability, especially for senior management. The purpose is to ensure that if things go wrong, the FCA can locate the person responsible and hold that individual accountable for their actions, or lack thereof.

The new accountability regime is changing the very nature of compliance recruitment – and with more at stake for specific individuals and firms, this will mean the permanent recruitment market will continue to adapt to such scrutiny and pressures.

The new regulatory referencing regime will also ensure that all information relevant to an individual's fitness and propriety dating back six years is disclosed. This will undoubtedly be a factor for firms to consider as part of any ongoing placement strategies which involve a regulated role.

How has the contractor market responded?

As a result of the specialisms required, it remains unlikely that one individual can possess all the knowledge necessary to support firms in their transition towards compliance. The contractor market has benefitted as a result, given the broad specialisms required from individuals in specific change areas.

Other seasonal or periodic events are also driving elements of the contract market to remain buoyant. The FCA relaunched the second phase of its PPI campaign on Wednesday 4th April (yes, the animatronic head of Arnold Schwarzenegger is back) and firms should rightly expect this to drive an uptick in complaints on the back of the publicity received. Claims management companies (CMCs) also remain active, against the backdrop of a potential cap on fees that such firms can charge for their services.

Complaints handlers also remain in demand across all areas of the financial services market as firms deal with other periodic spikes in complaints and claims levels.

A fine balancing act

The overall outlook for financial services compliance recruitment remains balanced.

The potential impact of a recent market slowdown in permanent hiring due to Brexit has not materialised. The continued focus from the regulators on key personnel and the emergence of new risk areas, for example, cyber risk, are continuing to pose challenges for firms. The implementation of the new accountability regime will undoubtedly increase the pressure on attracting and maintaining the best talent.