Chronic skill shortage hits banks’ risk and compliance plans

The skills companies scrambling to bolster risk and compliance functions need are in very short supply.

Financial services royal commissioner Kennenth Hayne AC QC.

Companies scrambling under the shadow of the bank royal commission to bolster their undercooked risk and compliance functions are learning that the people they hoped to hire to make their problems go away can’t be found.

Demand for already scarce compliance managers has been turbocharged in the wake of the royal commission, and financial services companies are struggling to fill the void.

According to Andrew Hanson, the NSW managing director for recruitment agency Robert Walters, experienced compliance managers are so scarce and demand is so heightened that salaries have risen between 10 and 20 per cent.

“It’s never been a better time for professionals in risk and compliance and that’s very much in line with the banking royal commission,” he told The Australian.

“But before that we were experiencing a shortage in professionals across both risk and compliance in professional services. And I guess that has been a trend which has been there post-global financial crisis.”

Even well-resourced banking giants like CBA have struggled to get risk and compliance right, the royal commission has heard. In May, chief risk officer David Cohen was forced to concede that the bank’s risk and compliance processes were not up to scratch, and were the reason the bank was not able to provide detail on some events, including breaches of the law, in its evidence to the commission.

CBA group chief risk officer David Cohen (right). Picture David Geraghty

Recruiters say that the trend towards the importance of compliance roles began after the global financial crisis. But the royal commission has seen demand skyrocket, as financial services companies create jobs to bridge the gap between internal stakeholders and regulators.

“The royal commission has led to increased investigative and enforcement powers for the regulators and that’s led to a role of a regulatory affairs manager being newly created across organisations,” Mr Hanson said.

“The systemic misconduct across financial services has meant unprecedented demand for these candidates and that across local and international banks, insurers, wealth mangers companies have all created roles across the risk management spectrum.”

Sean Moore, a partner in Deloitte’s risk advisory practice, said compliance is getting stricter.

“Perhaps in the past, people said, ‘yes I’ve done X, Y and Z’ and that was probably good enough,” Mr Moore said.

“But increasingly now it’s ‘I trust you, but show me’, so this need for demonstrable compliance is driving significant demand in resourcing requirements.”

Mr Moore said that banks are using firms like Deloitte in both an advisory and resourcing capacity as they look to hire people.

“We’ve seen a lot of people getting placed doing compliance-type work but I think there’s a realisation that you can’t just throw more and more people at it in heavy data areas like banking and technology,” he said.

“Where we see compliance roles going forward is in the demand for skill sets in data science and analytics.

“This is the evolution of compliance going forward – where it’s less about box-checking and more about the process and utilising technology to build compliance of the future.”

Tim Fogarty, Australia head of recruitment firm Taylor Root, said that because compliance among the financial services sector is so niche, the qualifications and experience sought by employers is very specific.

“You get loads of applicants for a compliance role but the candidates that the employer is looking for is a particular type and they are few and far between,” he said.

“Like a lot of niche areas in recruitment, they get over-fished and good people get picked up quickly. And if they are doing well, they get well remunerated so there’s less need for people with experience to be sitting around on the job market for a long period of time.”