London Finance Job Vacancies Rise on Risk Management and Compliance Demand

The push for companies to increase their compliance and risk management functions, following a spate of recent scandals and repercussions of the ongoing credit crisis, has led to a surge in London financial job vacancies in the first quarter this year.

According to recruitment consultant Morgan McKinley's monthly London Employment Monitor survey, job vacancies leapt 25 percent during the first three months of 2013 to 7,308 from the previous quarter, as firms look to bolster their compliance and risk management teams.

"Governance related functions including risk management, compliance and internal audit, as well as change management - specifically focusing on finance - are areas where talent is still sought after," says the emailed report.

The survey also revealed that in March this year, the average change in salary rose by 17 percent for those securing new positions, "indicating that competitive salary offers are out there for sectors of the market where professionals are in high demand."

However, in the same month, hiring decreased as job opportunities fell in London by 7 percent from February 2013.

Despite this, Morgan McKinley says this could be an indicative seasonal trend as there was a similar level of hiring activity in the same month from the previous year, with only a 2 percent drop.

"Despite the decrease in jobs being released in March 2013, there is still some positive news with financial services vacancies in the first quarter this year, showing an improvement from the previous quarter," says Hakan Enver, operations director with Morgan McKinley Financial Services.

"This data indicates a good start to the year, but March 2013 was negatively affected by Easter coming earlier than usual, causing it to be a shorter working month and disrupting the process of releasing new roles to the market," he adds.

Risk Management Importance Highlighted By Scandals

Since the onset of the financial crisis in 2007, global regulators have pushed for the strengthening of risk management and supervision, in order to prevent another widespread collapse to the credit markets.

However, a spate of scandals has also rocked the global banking industry since then and added to regulators' desire to increase risk management for firms.

JP Morgan lost $5.8bn in 2012, after an employee in its Chief Investment Office unit Bruno Iksil, nicknamed the "London Whale" for his rumoured preference for large trades, lost billions through a series of bad bets in a portfolio that was specifically designed to hedge the bank's risk exposure.

Though the trades were legal, the massive loss prompted an investigation by several US authorities, and eventually the bank admitted that its risk management models and procedure was flawed.

Meanwhile, UBS lost $2.3bn after its employee Kweku Adoboli made a series of unauthorised trades and its risk management unit and procedures have since been called into question again.

The manipulation of one of the world's most important interbank lending rates, Libor, has also led to regulators investigating dozens of banks globally.

While Barclays was the first to settle with US and UK authorities for its role in Libor fixing, UBS and RBS have since admitted to similar supervision and risk management failings that led to dozens of its traders manipulated rates for years.

HSBC and Standard Chartered were also found, separately, to have had "serious failings" in its risk management, compliance and supervisory units by a number of authorities, after regulators determined that their inadequate systems allowed it to move money around the US system for sanctioned country clients.

HSBC paid a $1.9bn fine to US prosecutors for failing to enforce rules designed to prevent the laundering of criminal cash. The bank also lost its head of compliance David Bagley following the scandal.

HSBC then announced at the beginning of this year, that it has hired former US Deputy Attorney General James Brien Comey Jr., to strengthen its efforts to combat financial crime and bolster risk management.

Meanwhile, Standard Chartered paid a civil penalty of $340m to the New York State Department of Financial Services (DFS), in order to settle the regulator's charges that the UK-listed bank hid at least a quarter of a trillion US dollars' worth of transactions linked to Iran, which is subject to stringent US sanctions.

It was also forced to improve its risk management and compliance functions by having a DFS representative working on the bank floor.

Then, in December, the bank paid a $100m fine to the Federal Reserve and $227m to the Department of Justice for the same reasons as the DFS.