HSBC and Standard Chartered are trying to up their compliance headcounts in Asia, but a tight job market and junior job seekers who look to leave after a matter of months mean expansion is far from straight forward.
Last week Standard Chartered – which was fined $300m in the US in 2014 for compliance lapses and faces ongoing American regulatory scrutiny – made two senior compliance appointments and announced a fivefold increase in its financial-crime headcount. Stan Chart is now set to continue its compliance hiring spree, which is focused on Asia, where the bank employs most of its staff and generates about 75% of its revenues.
“SCB is driving the recruitment of about 200 financial crime hires with the larger part of them based in Singapore given its position as a regional HQ,” says a recruiter in Asia with knowledge of the bank. “About 50% of these jobs are for Singapore, 25% for Hong Kong and the remainder are spread across other global locations.”
Fellow Asia-focused British bank HSBC revealed earlier this month that it hired 2,200 compliance staff globally in the first half of 2015 alone. While the firm didn’t provide a regional breakdown, Asian recruiters say it and Stan Chart dominate the compliance job market in Singapore and Hong Kong. “HSBC and Stan Chart are constantly hiring and candidates know they are the banks to approach should they be looking for a new role,” says Daniel Warwick, Singapore managing director of recruitment firm Eames Consulting Group.
But with many other banks also wanting to grow their Asian compliance units – recruiters tip Barclays, BNP Paribas, DBS and J.P. Morgan to expand – HBSC and Stan Chart may find it tough to both recruit and retain enough compliance staff to meet their needs.
“There has been constant growth in demand in compliance in Asia, so the available talent pool has become comparatively smaller and this has created a strong candidate-driven job market,” says Warwick. “I know compliance positions that have been open for eight months or longer, and due to this competitive market there’s now more ‘replacement’ hiring happening as people move on.”
Building out compliance teams in Hong Kong and Singapore is becoming less viable because junior recruits, who make up the bulk of new hires, aren’t sticking around for long enough. “Attrition of junior candidates is a big issue in Hong Kong,” says Kate Reid, Asia Pacific associate director of risk, compliance and audit at recruiters Eximius. “Large firms bulking up in areas like AML are offering pay increments well above average for candidates with only six to 12 months’ experience.”
Junior compliance professionals are taking advantage of the money on offer by moving banks twice or even times within two years, says Reid. “The challenge for banks who want to expand is retaining these staff – in this buoyant compliance market it can be only six months before new graduates are seen as valuable by rival big banks and are snaffled up with a 20% to 30% salary rise.”
At the mid to senior level, while there are still skill shortages in Asian compliance, people stay in roles for longer. “And hiring from overseas is also a practical option, albeit a most costly one,” says Stella Tang, managing director of recruiters Robert Half in Singapore. “We’re seeing shortages across anti-money laundering, surveillance and regulatory compliance,” she adds.
“The underlying challenge in Asian compliance is that global banks are committed to achieving the highest regulatory standards here, but these are often set in their home country,” says Reid from Eximius. “We have a smaller, less mature workforce in Hong Kong so it’s difficult to ask this workforce not only to meet their local and regional regulations but to also adhere to regulations set in mature markets.”