Compliance has emerged as a growth industry in the UK

Annabel Denham
Follow Annabel
RECENT scandals in the banking sector have led to some discernible changes. Firms have come under the regulatory microscope, resulting in large fines and reputational damage. More regulation and increased investor pressure to ensure adherence to these new rules has led to enhanced emphasis on the role and responsibilities of the compliance team. And now financial firms are also taking on lawyers and technology experts in preparation for Solvency II and Basel III. While the news agenda has focused on wide-spread job cuts and redundancies across the City, Guy Emmerson, operations director at Badenoch and Clark, says that "there has been some recent movement in the hiring and jobs market, so there is perhaps room for a little more optimism than commentators suggest".

Compliance jobs are now widespread in the industry. Many businesses are enforcing restrictions on hiring, but compliance is often kept separate, ring-fenced from cut backs and redundancies. In addition, banks are up-skilling their compliance departments and raising their internal bar as to what is necessary to maintain compliance.

The most significant jump has come in hedge fund roles, with most funds hiring a compliance professional – a role the chief operating officer would typically have previously performed. This has “taken the market by surprise, pushed up salaries, and led to a shortage of good candidates”, says James Hollands of Alexander Black Recruitment. It has also impacted hiring patterns for fund managers, banks and professional services firms.

Alexander Black has seen a 16.5 per cent rise in insurance-based compliance roles – a significant statistic given the current market. Growth in this area is controlled by the Financial Services Authority (FSA) and the more regulations it creates, the higher the demand for individuals to meet these requirements.

Compliance is now seen as a career “in its own right”, with graduates choosing it as initial career choice, according to Richard Aldridge at Black Swan Group. Large firms started graduate schemes in compliance around five years ago, with mid-tier houses quickly following suit. Graduates looking for a position in this sector should apply to these schemes and seek work experience within a regulated firm. There are ways to stand out from the crowd, for example a securities and investment diploma in regulation.

But compliance is not just for graduates. Black Swan has seen a variety of individuals looking to change careers and move into compliance; lawyers, auditors, and front office professionals. Candidates often have a background in risk in investment banking or an accountancy qualification, or a background in project management. Indeed, many positions will be filled by "specifically strong and experienced project managers, who will be vital in ensuring a smooth roll out of new regulation processes" says Emmerson.

Funds will generally seek experienced candidates with either a legal or compliance background who ideally have “excellent product knowledge, multi-jurisdiction exposure and new fund set up experience”, says Aoife Crawford of CuttingHedge Recruitment. Having a law degree demonstrates analytical bent, giving businesses someone who can read complicated legal documents and translate them for a commercial audience. Compliance professionals will ideally “know the FSA handbook cover to cover, and a background in macro and micro policy is key to give balance”, says Hollands.

Compliance is a highly important business area: the damage of getting it wrong can be vast. It is a technically competent area. Companies need to “pay people accordingly, as with any role in a technically skilled business area”, says Marina Law of Robert Walters.

A survey carried out by Robert Walters found that the majority of compliance professionals are expecting a pay rise this year, demonstrating optimism despite market conditions. However, as more individuals get experience in the sector, an increased supply of candidates will emerge. This will, in turn, reduce the inflated daily rates that candidates – who have “become a premium commodity” – can currently demand, according to the Marks Sattin 2012 Market Report.

Many rightly criticise the level of regulation that has emerged in financial services, with the number of rules only likely to increase. New measures increase cost, hinder processes, prevent growth and result in job losses. But regardless, some will gain from this unappealing trend. Although compliance jobs are highly technical and require very specific knowledge, they could be a useful career choice for the right candidate.