The business of keeping banks in check is booming, with HSBC, JPMorgan Chase and BNP Paribas all employing thousands to bolster their compliance teams since the crisis.
“With the wave of astronomical fines imposed upon some banks, most players in the industry are almost paranoid about compliance,” says Alex Stremme, assistant dean for the MSc Finance program at Warwick Business School.
Banks have been fined billions of dollars by regulators for breaches and there is no sign of the stream of charges slowing. In the past 12 months, six banks including Citi and UBS were fined $5.6 billion over the rigging of foreign exchange, while Barclays paid up for manipulating Isdafix, used to set prices for the $500 trillion interest-rate swap contracts market.
The British bank has been one of the chief recruiters this year, advertising for 200 compliance staff in April alone.
The heavy financial penalties are driving armies of risk officers at banks in London but a regulatory clampdown is pushing up demand for talent across Asia too. “It has been clear that jobs related to operation control, risk and compliance are in hot demand,” says Lawrence Chan, director at CUHK Business School in Hong Kong.
Even as they shed thousands of jobs elsewhere, HSBC and Standard Chartered have prominently highlighted their compliance vacancies.
Maire Apiou, director of career services at University of Hong Kong’s business school, points to the need for Chinese language skills in finance, with languages preferred over technical skills in some instances. “China recognises both the need to attract higher calibre talent and to improve professional standards,” she says.
Managing risk is high on banks’ agendas. “The topic has certainly grown in importance,” says Steven Young, head of accounting and finance at Lancaster University Management School. “Risk management has always formed an important element of our programs but I think the topic is starting to permeate more courses,” he says.
Professor Bo Becker at the Stockholm School of Economics says risk management is a hot topic in executive education but remains a niche for students seeking careers in finance.
Nonetheless, for French business school HEC Paris the role of ethics and compliance in the hiring process of investment banks is on the upswing, says Professor Jacques Olivier, program director for the Masters in Finance.
HSBC announced plans to recruit 3,000 compliance officers in 2013, with JPMorgan saying it would hire a similar number. BNP Paribas has increased its compliance staff by 40% to 1,600 over five years. StanChart last year had increased legal and compliance headcount by 30%.
Dr Julia Knobbe, program director at Frankfurt School of Finance & Management, says there is growing demand from employers for graduates with skills in risk management, regulation and compliance.
“Ethics, sustainability and responsibility are all topics which have come into focus since the 2008 banking crisis,” she says.