A growing number of recruitment consultants report they are struggling to fill risk management and compliance roles in financial services.
Those already in the field may have noticed positions are taking longer than usual to be filled. There are plenty of prospects for those seeking a move and with fewer external candidates, internal promotion prospects are looking rosy.
Demand outstrips supply
According to recruitment firm Barclay Simpson, in the UK some 75% of managers say that finding employees skilled in compliance is hard with 62% saying too many did not have the required technical expertise.
Further, over two thirds (68%) said their compliance departments were insufficiently resourced, despite 42% of these saying they had increased their salary budget to try and attract talent.
Why the increase in demand for risk professionals?
One of the main reasons is the growing demand for risk management and regulatory expertise, given the challenging environment. Factors include:
- The increasing threat of cyber – this is no longer confined to IT departments and the impact on business is particularly stark following the WannaCry attack
- Tough new regulatory requirements such as the Senior Managers Regime, the Basel Controls and the forthcoming General Data Protection Regulation
- Brexit - there will undoubtedly be a period of upheaval and which may well result in both changes to the risk environment and regulatory change.
- Lack of efficiency within risk management with too much reliance still on spreadsheets
Lack of efficiency is the big one
Risk management departments still carry most of the burden and ownership of risk mitigation within many organisations. The use of spreadsheets in managing risk means that valuable risk resource is absorbed in managing and manipulating data and chasing correspondence from operational departments. This lack of system efficiency prevents the risk team from transferring ownership of risk and using automation tools to free up time to focus on best practice and mitigation.
Will Brexit add to the pressure?
Potentially, leaving the EU could also mean that some risk and compliance employees quit their jobs in the UK. The early signs are that there will be no mass exodus, but certainly some may feel there could be an improving environment in other European capitals.
Others may even be lured further afield. The risk and compliance sector is booming in New York and Singapore is also desperately seeking compliance experts.
A role that is growing in importance
Although risk and compliance are not seen as revenue generating roles, it’s clear that strategic business revenue growth decisions often fail because of a lack of risk insight in the decision making process.
In addition, the increasingly tough stance taken by the Financial Conduct Authority and the potentially devastating consequences of cyber attacks, means that reducing capability in risk and compliance is not a desirable path. Many more boards are realising the importance of this with more risk professionals being given board positions or acting as key advisers.
Risk is now seen as a profession and what is more, heightened demand is likely to raise the profile of this vital sector, both in the workplace and in academia.
Meanwhile, recruitment firm Robert Walters said employers were “acutely aware of the financial and reputational risks of failing to comply with legislation and guidelines. This has resulted in a continuing demand for compliance professionals.”
The firm said those with key skills and experience in areas such as trade surveillance, regulatory advisory and sanctions fields were highly sought after, as were those who had experience overseeing large change projects and collaborating effectively with other stakeholders.
The future – it’s time for more efficient systems combined with new talent
Bringing in new talent is also a continued challenge, with few apprenticeship schemes and the perception that these are backroom roles putting off some graduates. In fact, risk managers in particular, need to be strong and outgoing characters – Goldman Sachs, for example, has said it rates communications skills as among the most important attributes for the role.
Risk managers increasingly have more scope to experience businesses at first hand and fortunately, software has developed to allow them to assess and monitor risks holistically across a business.
The reliance on outdated and cumbersome technology such as spreadsheets needs to change. A growing number are embracing new technology and ways to save time, which is critical in the current climate. The new breed of risk managers are transforming the role from a side-lined box ticking exercise to the main stage. They are influencing operational decisions across the business.
Within compliance, the UK may increasingly want to develop its own regulatory regime that is less dependent on European directives and this will result in more demand. So if ever there was a golden age of opportunity for risk and compliance, this is it.