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MBA Job Growth In Financial Services For Risk, Compliance And M&A

Financial services companies are looking for new recruits with expertise in regulatory areas, for roles in risk management, compliance and M&A units.

Tue Jan 27 2015

Financial services companies have put the financial crisis behind them, but increased regulatory requirements have created a surge in demand for new hires that can tip-toe an increasing amount of red tape. At banks, compliance is in vogue.

A number of careers officers and finance professors at top business schools, and senior bankers working in Europe, have told BusinessBecause that financial services companies are looking for new recruits with expertise in regulatory areas.

The increasing costs of compliance have opened up careers in areas like risk management, but for all positions these qualities are now desirable, they say.

Piotr Danisewicz, a professor at the department of accounting and finance at the UK’s Lancaster University Management School, said that since the global financial crisis, there has been a shift: “[There is] demand for employees that have some expertise in regulatory requirements,” he said.

He added that the demand for financial workers who know about prudential regulatory agencies is also now higher at banks. “This can affect a number of students on [the] MBA,” Piotr said.

A barrage of regulation has opened up careers for MBAs in risk management and compliance roles, and banks have pledged to bolster their audit and financial crime units.

Standard Chartered, for instance, has at least doubled the number of staff in its financial crime unit, and in 2014 had increased legal and compliance headcount by 30% over a year.

BNP Paribas, France’s largest bank, said last year that it had increased its compliance staff by 40% to 1,600 in five years, with further plans to increase the size of its audit and risk management teams.

“With the increase in regulation within the banking sector, there is now increased demand for regulatory advisory professionals to navigate the new regulatory environment within financial services,” said Paul Schoonenberg, MBA careers manager at Aston Business School.

He said that jobs which were once carried out by consultants have been brought in-house within banks. “Areas such as operational risk and audit will continue to experience further increases in hiring activity,” he said, adding that he expects a further uplift in financial services sector recruitment throughout 2015.

This was a sentiment echoed by Tony Somers, director of career management at French business school HEC Paris. He said that he sees a rise in hiring for risk management roles within financial services companies.

There has been increased spending in this area. HSBC, for instance, spent between $750 million to $800 on its compliance and risk program in 2014, up considerably from $150 million to $200 million in 2013.

“Just dealing with the regulatory scrutiny is taking considerable time and cost,” said William W Sihler, professor of finance at Virginia’s Darden School of Business.

Macquarie, the Australian bank, in 2014 had tripled the amount it spent on direct compliance in three years to about $300 million.

“Across the board there is still a demand for risk and operational roles,” said Adila Khan, career advisor for finance at Oxford University’s Saïd Business School.

Jared Barlow, an associate director at Arizona’s W. P Carey School of Business, said there are not only capital charges but more assessment of systemic risk and operational compliance from newly formed agencies that are now required among banks.

“As such, financial institutions have a high number of individuals employed in the compliance, auditing and risk assessment functions,” he said.

Gil C Yancey, executive director at GWU Business School’s Career Centre, said there are increased regulatory requirements and a focus on cost efficiency in financial services.

He said: “Financial services firms have increased hiring in many areas, particularly regulatory, accounting, compliance [and] risk management.” For banking, he added: “The banks seek graduate students for compliance, risk management and financial analysis.”

Pascal Michels on the career services team at IESE Business School said there is a jobs market for compliance, risk and auditing roles, but investment banking remained king in 2014.

“Undoubtedly there is a real appetite in these areas at the experienced hire level, and MBA candidates with the right profile may find it an option to tap into,” he said.

Other areas tipped for career opportunity in 2015 are in private wealth management and mergers and acquisitions.

“We are currently seeing a rise in hiring in private wealth management [and] some M&A work,” said Tony at HEC Paris.

For M&A in particular there has been a robust year of deal activity in industries including healthcare and more recently telecoms. There were 96 deals worth more than $5 billion completed in 2014, according to data compiled by the Financial Times.

“M&A is now on the rise and there is an appetite for junior M&A Bankers, in particular across sectors such as TMT [technology, media and telecoms], healthcare and retail,” said Paul at Aston.

Banks may be looking to bolster their deal making ranks with new business school talent.

JP Morgan and Goldman Sachs currently top the league table for fees earned from M&A deals.

“We are seeing an increase in activity in the traditional investment banking [and] M&A roles intake, with students being offered full-time [jobs] as well as internships,” said Adila at Oxford, but more for entry-level hires.