Market Outlook: Compliance & Risk Management Industry in 2021

Market Outlook: Compliance and Risk Management Industry in 2021

Compliance and risk management expected to keep up with digital transformation. As more physical activities are being replaced by digital initiatives, businesses and consumers are inevitably more vulnerable to online threats and digital crimes. To counter the anticipated increase in digital threats, firms are beefing up their compliance and risk management teams to safeguard against money laundering and terrorist financing. Compliance and risk management professionals will be increasingly expected to apply their experience and expertise in roles, such as financial crime compliance (“FCC“) and anti-money laundering (“AML“). Companies face a constant challenge to find talent for these niche roles that require specific skills and in-depth industry knowledge. Therefore, compliance and risk management remains a candidate-driven market in 2021. There are also rising expectations for risk management and compliance candidates to be digitally-adept, be open to wear multiple hats and have strong language proficiency. Firms are digitising their risk and compliance processes to stay competitive through rapid and comprehensive responses, drive greater effectiveness, lower costs and enhance the customer experience. Candidates who have experience working with a variety of risk and compliance systems and good data analytical skills are highly sought-after. Within the risk and compliance industry in Hong Kong SAR, we expect to see higher talent demand in liquidity risk, interest rate risk in the banking book (“IRRBB“), special assets management, distressed asset coverage and sanctions.

Labour and Salary Trends for Professionals

The pandemic has altered job seekers’ perspective towards income and job security. Many candidates are becoming more interested in the company’s financial health as it usually signals greater job stability. The pandemic has altered job seekers’ perspective towards income and job security. Many candidates are becoming more interested in the company’s financial health as it usually signals greater job stability. Chinese securities firms have performed very well in 2020 despite the health crisis. Hence, candidates are more likely to hold out for regional or local banks, as they are less likely to make any large-scale job redundancies. Employees working in Chinese firms can also expect a relatively stable bonus payout of four to six months salary for work done in 2020.

In-demand Risk and Compliance Talent

Companies are no longer in the liberty to freeze hiring plans if they want to operate efficiently in an increasingly complex and competitive environment. Despite current economic conditions, compliance and risk management remains a candidate-driven market as it is a constant challenge for companies to find talent for these niche roles that require specific skills and in-depth industry knowledge. There are also rising expectations for candidates to be digitally-adept, be open to wear multiple hats and have strong language proficiency. Firms are digitising their risk and compliance processes to stay competitive through rapid and comprehensive responses, drive greater effectiveness, lower costs and enhance the customer experience. Candidates who have experience working with a variety of risk and compliance systems and good data analytical skills are highly sought-after. The expansion of Chinese companies in Asia Pacific has also driven the demand for trilingual candidates who are business-proficient in Mandarin, Cantonese and English languages. As a result of the small talent pool, some employers may meet candidates’ salary expectations in a bid to secure the best available talent. Within the risk and compliance industry, we expect to see higher talent demand in liquidity risk, interest rate risk in the banking book (“IRRBB“), special assets management, distressed asset coverage and sanctions.

1. Credit Risk and Special Asset Management

Companies across all industries, particularly those that are more impacted by COVID-19, will need to restructure and diversify their business to sustain or liquidate to cut their lsses short. This has driven a demand for talent in credit risk and special asset management who specialise in debt or loan restructuring and liquidation. Professionals working in debt collection and recovery are also highly sought-after to manage the escalating number of defaulting debts.

2. AML and FCC

Banks are continuing their investments in AML and FCC to effectively identify and report suspicious activities within a highly complex and sophisticated digital environment. There is a demand for candidates who are not only knowledgeable in traditional AML advisory and FCC compliance, but are also digitally-adept to use AML systems for higher accuracy and better effectiveness. On the FCC front, there is notable talent demand for economic sanction advisory experts. Smaller firms with leaner operations tend to prefer talent who possess both AML and FCC skills and knowledge to manage headcount costs.

3. Sanctions

Given the rapid changes in the banking environment and sanctions, employers have higher expectations of candidates as they look to build a solid team of experienced experts who can help map and resolve potential breaches and liabilities before they arise. In particular, Chinese financial institutions are hiring sanction and litigation experts with strong knowledge and experience dealing with U.S. regulations and Office of Foreign Assets Control (“OFAC“) rules.