Careers prospects in banking have changed in the banking industry over the last decade in the UK.
Formerly, all bankers wanted to be investment bankers, or hedge fund managers, or traders. They were seen as the glamourous end of the industry, seeing the most activity, prospects, money and reputation. The back office functions, such as secretarial or administrative, were not as attractive to the best and brightest bankers. In a few short years, how things change.
As a result of many scandals in the banking sector, and amidst great public condemnation, the government has imposed a great many regulations and legislative checks upon bankers. The Financial Conduct Authority (previously the FSA) has been keeping a watchful eye on banks and bankers’ actions- with the EU and current financial issues with the Eurozone fiscal adding to this new culture of restraint and checks.
This has brought about a shift in banking culture. Although the front office traders an investments bankers still have great job satisfaction and prospects, the mood there (including in career prospects) is somewhat muted. It is in the traditional back office functions that the greatest changes has been seen. In the wake of increased oversight, the role of the compliance department had become more important. From being an often overlooked bank department, the compliance department is now crucial as all financial transactions and deals have to be checked by them to ensure that banks’ actions are in line with regulations.
As the importance of the compliance department has risen- so has compliance as a job. The more regulations imposed by the FCA, Whitehall or Brussels, the more jobs open up for compliance experts, and the more vital their knowledge and expertise becomes. Compliance departments are growing in size, and are now staffed with specialist financial professionals who are experts in the area of financial oversight.
Recruitment consultants have notice the change. Most hedge funds, for example, have hired a compliance professional to fulfill a role that was usually performed by the chief operating officer. There has been a steady rise in the number of jobs in compliance – one recruiter notes a rise of 16.5% in insurance based compliance vacancies alone. Also, the compliance industry has seen a rise in salaries coupled with a shortage of candidates; see compliance roles at Randstad.
According to the Black Swan Group, compliance is now seen as a respected financial career in its own right, with many graduates choosing it an initial financial career choice. Large financial institutions now have graduate schemes in compliance, and many mid- tier institutions have now followed suit, such is the importance of compliance professional. Graduates are now strongly advised to complete one of those schemes, or to have a detailed technical knowledge of regulatory related areas.
Indeed, another of Black Swan’s findings is that compliance is not just for graduates. The recruitment company has seen many lawyers, auditors or front office bankers move into compliance. Candidates for compliance jobs now often have accountancy or legal qualifications, or backgrounds in the financial sector such as risk management, investment banking or similar. Candidates often have a background in risk in investment banking or an accountancy qualification, or a background in project management. Recruitment consultants are now stressing the specialist nature of the role.
As regards future prospects, the future is bright for compliance. According to Badenoch & Clark, hiring for compliance based roles has risen dramatically over the last year, and continues to do so. A survey carried out by recruiters Robert Walters found that many compliance professionals were in line for a pay rise this year- despite public and governmental pressure for bankers’ salaries to be cut down. Despite pressures on recruiting in the financial industry, the mood concerning compliance jobs is optimistic.
The financial industry has criticised the mount of regulations and oversight of their actions. However, such oversight shows no sign of stopping- rather, it is increasing. While this trend increases the cost of doing business for banks, and makes doing business more complicated and convoluted, it has proved to be a gain for the compliance department. As the skill and importance of compliance increases in this age of banking oversight, it is proving to be a rewarding and fulfilling career for the right candidate.