Governance2016Report

THE OUTLOOK

FOR 2016

Governance

(compliance, audit, operational risk)

Financial Sector Employees | The outlook for 2016

Contents

Compliance -permanent and temporary 3-5

Operational risk – permanent and temporary 6

Internal audit 7-8


Compliance and financial crime – permanent and temporary

2015 has been yet another busy year for the financial services compliance market. Firms across the whole of the Financial Services industry have been looking to increase head count or up skill their teams to meet increased scrutiny from the regulator.

We have seen a high level of hiring across the banking industry being driven by financial crime, with many of our clients recruiting multiple numbers from the junior level all the way up to ‘Head of’. This is true for the global banks all the way down to the boutique banks. Many clients are seeking SMEs in specific areas of financial crime; we have seen repeated needs for candidates with in depth knowledge of: sanctions, Anti Bribery and Corruption, AML and fraud.

The formation of the FCA has made ‘conduct risk’ the buzz word across financial services. Firms must now demonstrate that their culture is customer centric all the way from the board level down. We have seen this reflected in hiring, with firms looking to bring in new resources to focus on conduct risk, ensuring that the importance is communicated throughout their businesses. This hiring has happened across all levels, with a particular focus on more senior advisory and policy-focused positions. Successful candidates have in fact come from various backgrounds and have had a methodical approach to conduct as opposed to experience in this area given it is so new.

Some sectors which were able to stay under the radar of the FSA are now under far more scrutiny with the dual regulator, namely brokerages and consumer credit firms (which historically were regulated by OFT) have been a key focus for the regulator, meaning that there has been increased demand for compliance professionals with relevant experience. The FCA has categorised consumer credit firms dependent on the level of risk that they take on, firms such as pay day lenders have seen tighter controls placed on them, meaning that many of these firms have had to significantly change the way that they view compliance. Electronic trading firms have experienced a similar tightening and increased regulations to match those of Banking making this a real hot spot for compliance recruitment in 2015. These firms are trying to source candidates with HFT/MTF compliance experience which again is very limited in the market resulting in inflated salaries to attract the limited talent available. The focus on regulatory experience has never been more rife, demand for MIFID/MIFID II, EMIR, MAR, ICAAP,CASS especially at the senior end of the market, could not be more pressing.

In a changing regulatory environment, compliance remains is a candidate short market, however candidates are now more reserved about accepting roles, especially CF10/ CF11 roles without doing all their due diligence given the increase in personal liability with the senior management regime coming in to play. Again, this has forced companies to up their budgets as less qualified candidates who historically would have taken these roles in small firms for the financial uplift are now far more dubious.

Overall, the compliance market remains to be candidate driven; the shortage of talented professionals in the area continues to drive salaries up although this is starting to flatten out as most large firms have key senior staff in place, however it is still prevalent in mid sized firms looking to up skill their current teams. The main challenge for many employers is now around retention and development of good talent to ensure they improve their ability to efficiently mitigate the ever changing risks that they face.

EXPECTATIONS FOR 2016

As discussed, the compliance market has remained busy throughout the whole of 2015; we expect to see this continuing as we move in to 2016. Many of the busiest areas of recruitment that we have recorded in 2015 will remain the same; both conduct risk and financial crime have been highlighted as areas of focus for the FCA throughout 2016. Companies will have to ensure that they have the adequate people, systems and controls in place to avoid repercussions.

We expect sectors where regulation is new, like consumer credit and Fintech to continue to hire within compliance significantly, especially as they are high growth industries which will most certainly mean increased regulation.

2015 has also seen a number of Challenger Banks being set up, and with a stabilizing economy this number is likely to increase. This will most certainly be a core focus for compliance recruitment in 2016 as they are most certainly in the regulators limelight.

3

Investment banking – compliance

Role Salary (£) Likely salary

uplift (%'age)

2015 bonus

low (%'age)

2015 bonus

med (%'age)

2015 bonus

high (%'age)

UK head of compliance 120,000-150,000 10-20 20 50 80

European head of compliance 150,000-200,000 10-30 20 50 100

Global head of compliance 200,000-300,000 10-30 30 50 100

Front office


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus

med (%'age)

2015 bonus

high (%'age)

Equities/fixed income

compliance associate 35,000-50,000 10-30 10 15 20


compliance AVP 50,000-75,000 10-30 10 20 30


compliance VP 75,000-120,000 10-30 10 20 40


compliance director 120,000-160,000 10-30 20 30 50

Head of equities/head of fixed

income 2 150,000-200,000 10-30 20 30 50

Head of investment banking

compliance 180,000-250,000 10-30 20 40 60


4

Compliance and regulation (cont/d)

Retail banking/insurance


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus med

(%'age)

2015 bonus high

(%'age)

Compliance associate 30,000-40,000 10 0 5 10

Compliance manager 40,000-55,000 10 5 10 15

VP 60,000-80,000 10 10 15 20

Senior VP 75,000-90,000 10-20 10 15 25


European head of compliance 120,000-180,000 10-30 10 20 40

Global head of compliance 150,000-200,000 10-40 10 30 50

Asset/wealth management


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus med

(%'age)

2015 bonus high

(%'age)

Compliance associate 30,000-40,000 5 0 10 2

Compliance manager 40,000-60,000 10 10 20 3

VP compliance 60,000-80,000 10 10 20 30

Senior VP compliance 80,000-100,000 10-20 15 20 40


Control room


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus med

(%'age)

2015 bonus high

(%'age)

Control room assistant 30,000-50,000 5 0 5 10

Control room manager 50,000-80,000 10 10 20 30

Head of control room 85,000-120,000 10 10 20 50

Monitoring/surveillance


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus med

(%'age)

2015 bonus high

(%'age)

Compliance associate AVP 40,000-60,000 10 5 10 20

Compliance VP 60,000-100,000 10 10 20 30

Head of monitoring 100,000-130,000 20 10 20 30

AML department


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus med

(%'age)

2015 bonus high

(%'age)

KYC/on-boarding analyst 35,000-40,000 5 0 10 20

AML analyst 40,000-50,000 5 0 10 20

Senior AML officer 50,000-70,000 10 0 5 10

Financial crime analyst 50,000-60,000 10 0 5 10

Financial crime manager 60,000-80,000 10 5 10 15

Head of financial crime 100,000-150,000 15-30 5 20 40

MLRO 130,000-180,00 20-30 5 20 50


5

Compliance and regulation (cont/d)

w: www.michaelpage.co.uk/bankingandfinancialservices

Interim

Role Low (£) Mid(£) High (£)

KYC/AML analyst 200 300 450

Control room 300 400 500

Monitoring 300 450 550

Surveillance 300 450 600

Advisory 400 600 800

Head of compliance 550 650 800

MLR0/CF10 600 800 1000

For more information on permanent hiring,

Please contact Heather Ninnes:

t: 020 7776 5936

e: [email protected]


please contact Elisa Lightfoot :

t: 020 7776 5932



please contact Joanne Murphy:

t: 020 7776 5964


For more information on Executive hiring,

please contact Sumrana Saleem:

t: 020 7776 5973


For more information on temporary hiring,

please contact Ian Christie

t: 020 7645 1449



6

Operational risk – permanent and temporary

.

Operational risk

Role Experience Salary (£) Likely salary

uplift (%'age)

2015 bonus

low (%'age)

2015 bonus

med (%'age)

2015 bonus

high (%'age)

Analyst/associate 1-3 years 45,000-55,000 5-10 5 10 15

Senior associate/manager/AVP 3-5 years 55,000-70,000 5-10 5 10 15

Vice President/senior Vice

President/Associate Director 5-8 years 85,000-100,000 10-15 5 15 25

Director 8-12 years 100,000-120,000 10-20 5 15 25

Head of department/division 12 years + 120,000-150,000 10-20 10 25 40

Interim hire rates


Analyst 300 500 500

AVP/manager 300 500 550

VP/senior manager 350 450 600

Director 400 600 800

Head of department 500 700 1000

The growth of the Operational Risk Market has continued throughout 2015 and the outlook for 2016 remains

strong. This is largely due to the huge focus on regulation within financial services stemming from the dual

regulator and high profile fines that many banks have faced. Financial services firms have a relentless drive

to enhance risk frameworks with a huge focus on the 3 lines of defence model that is continuously tested by

the third line and controlled and implemented by the second line whilst being managed on a daily basis by the

business or first line.

Having said this, despite a higher number of vacancies, the sector is following the trend of specialist markets

where technical skills are hugely sought after and it is becoming increasingly candidate short leading to a

huge imbalance between supply and demand. The focus is moving towards technical competence and

knowledge and ability to apply regulations such as ICAAP, ILAA, EMIR and Dodd Frank and Volcker. There

has been a high degree of success for Ops Risk professionals who have in-depth business knowledge

coupled with strong communication and stakeholder management skills.

The demand for operational risk in financial services is prominent in the retail banking sector, investment

banking and most recently across asset management where the majority of hiring has been in 2015.

Asset managers and brokerage firms continue to grow their operational risk teams, as regulatory scrutiny

continues which means a high number of roles coming to market at the Analyst and VP level. Many of these

firms have been re-structuring their operational risk teams in a bid to avoid the scandals that have plagued

the major banks. This has led to a scarcity of candidates with asset management operational risk experience

on the market with these firms looking towards retail banks and insurance to source this skill-set.

Within investment banking the market remains strong with the majority of roles coming to market having a

front office product focus as banks try to enhance their front office risk frameworks particularly at the AVP and

VP level. We are also seeing many candidates who are coming from an operations or middle office controls

background making the transition to operational risk roles as their business knowledge proves to be a key

skill-set. Many banks have also been developing their middle office governance structures with many roles of

this nature coming to the market throughout 2015. Again the trend within the larger banks continues with

specialist technical knowledge being in high demand which has led to a high propensity of buybacks as firms

battle to retain their key risk professionals.

For more information please contact Karen O’Neill:

t: 020 7645 1432


For more information please contact Emily Bouwhuis:

t: 020 7645 1428




t: 020 7776 5973



7

Internal audit

Investment banking


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus

med (%'age)

2015 bonus

high (%'age)

Associate (or equivalent) NQ – 3 years 45,000 – 55,000 0 - 5 5 10 15

Manager/associate vice

president (or equivalent) 3 – 6 years 65,000 – 80,000 0 - 5 5 10 15

Senior manager/vice president

(or equivalent) 6 – 10 years 80,000 – 100,000 0-5 10 15 20

Senior vice

president/department head (or

equivalent)

10+ years 90,000 – 150,000 0-5 10 15 30

The Internal Audit market has remained buoyant throughout 2015 with a steady rise in recruitment activity due to increased scrutiny from the regulator. Despite increasing demands the key challenges remain the same; the lack of high calibre candidates.

This shortage of talent is due to a variety of factors; firstly the demand from clients in internal audit has changed in financial services; strong interpersonal skills to support the technical skill set, has become a pre-requisite in this function, therefore a lot of career auditors are not meeting the expectations of the clients. Also, the top tier candidates are subjected to a multitude of offers both in and outside of Audit and therefore come at a premium, if you are lucky enough to be selected buy them as the firm of choice!

The demand for Newly Qualified Auditors in Banking has increased this year to mirror growing business need. This is perhaps where we have seem the biggest shift in audit recruitment for 2015 as historically candidates were selected from the Big 4 at this level however these firms has increased salaries as a retention tool, leaving financial services firms with a further reduction in the pool of candidates to source from, and therefore requiring a more creative recruitment approach. Clients are however accepting this and being more flexible on training up graduates, hiring part-qualified auditors from the EU and from non-financial services firm, this is proving to be a successful hiring strategy.

In the senior end of the market the roles are increasingly specialist; there is continuous demand for capital markets, compliance, conduct, financial crime, quant and credit Auditors. Firms are very keen to hire from specialist business areas and move product experts into the team increasing the competition for talent even further as moving into Audit is not necessarily the first choice for candidates in the Business. However Audit functions seem very aware of this and therefore offer a very generous uplift in compensation to attract talent, 20% increases are very standard now in Internal Audit the most fascinating part of this is that a very high percentage of these candidates are counter offered with a similar increase to stay making being a candidate in Internal Audit certainly very lucrative at the moment!

Candidates wanting to fast track their career are now starting to view Internal Audit as a viable option, it gives them a broader perspective on the business as a whole and network internally, firms seem more supportive in offering internal audit as a stepping stone into other areas or, if they wish to stay an opportunity to move up the career ladder faster than their colleagues in finance with an attractive salary package!

As steady as hiring within Banking has been there has been an increase in Internal Audit hiring in Asset Management and Insurance businesses; this increase has come from a growing trend by these traditionally smaller businesses, who are now looking to develop these functions into and hire experienced Audit Managers instead of outsourcing their Audit functions.

Looking forward to 2016, we predict a fairly steady growth in Audit recruitment market; most firms who have restructured over the last 12 months are already candidate short and this is likely to increase as the market gets busier and there is more demand from the business. The opportunity to hire is apparent in Financial Services businesses but the development of the candidate pool is more of a challenge. Hiring mangers need to have realistic hiring expectations and compromise on some of the more specialist aspects of their requirements; otherwise they risk being short staffed for a long time resulting in poor morale amongst current employees. If these sound like challenges you are currently facing please call Michael Page Financial Services to discuss further and together we can find the right solution.


Internal audit (cont/d)

8

Wealth management & funds


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus

med (%'age)

2015 bonus

high (%'age)

Associate (or equivalent) NQ – 3 years 45,000-65,000 0-5 5 5 10


president (or equivalent) 3-6 years 60,000-75,000 0-5 5 10 15


(or equivalent) 6-10 years 75,000-90,000 5-10 5 10 20

Senior vice


equivalent)

10+ years 85,000-150,000 5-10 10 20 30

Insurance


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus

med (%'age)

2015 bonus

high (%'age)






Senior vice


equivalent)

10+ years 85,000-130,000 5-10 10 15 20

Retail banking


uplift (%'age)

2015 bonus

low (%'age)

2015 bonus

med (%'age)

2015 bonus

high (%'age)






Senior vice


equivalent)

10+ years 85,000-130,000 5-10 10 15 30

Interim hire rates


Auditor 300 400 500

VP/manager 400 500 600

Head of Department 400 600 800-1000

For more information please contact Eithne Hynes:

t: 020 7645 1424


For more information please contact Karen O’Neill:

t: 020 7645 1432




t: 020 7776 5973


For more information please contact Emily Bouwhuis:

t: 020 7645 1432


For more information on Interim hires, please contact Ian

Christie:

t: 020 7645 1449


Governance2016Report

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