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How compliance became the worst place to work in banking

If you thought compliance jobs in banking and finance are rewarding, you're probably thinking of 2009 and have failed to apprehend the articles where compliance professionals complain of poor mental health, high anxiety and "regulatory overload." 

 

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The post-crisis halo has faded; compliance jobs in banks are not nirvana. Not in 2024.

"Compliance teams are underwater and under-resourced," one former compliance professional at Goldman Sachs tells us. "They wear a lot of risk, and only a few people at the top are compensated appropriately for that."

Our recent salary and bonus survey highlighted the issue. The average compliance bonus fell 22% globally last year, more than in any other sector. Unsurprisingly, only 12.5% of compliance professionals were happy with their pay - also fewer than in any other sector. 

 

As banks cut costs, compliance professionals complain that they're at the sharp end. "A lot of people working on my electronic surveillance project have been cut," says one compliance professional at a major US bank. "I'm struggling to get the work done without them, and I'm looking for a new job, but there's nothing available in this market." 

What banks say and what banks do about compliance seem to be two different things. Lip service is paid to the importance of compliance internally. But insiders say teams are often under-resourced and underwater. "We're asked to keep the wheels turning instead of engaging in work that would actually make a tangible different to risk identification or would increase our efficiency," complains one senior compliance professional.

Amidst all this, compliance professionals are expected to confront salespeople and traders when they detect wrongdoing. This can be difficult when you're paid far less than the people you're challenging. It can also be challenging when the business doesn't have an appetite for perceived negative opinions. "The business can and does override us," says one compliance professional. "- When it comes to difficult, complex and ultimately lucrative opportunities, there's a sense that what we say doesn't really matter." Senior managers and people with FCA responsibility (in the UK) appreciate the importance of compliance because their own skins are on the line; middle managers do not. Whoever you interact with in the business, though, another compliance professional says it's necessary to be attuned to the "mood music:" there's only so much push-back and bad news that people can bear.

What's a compliance professional to do? Despite the disempowerment, despite the poor pay and the falling bonuses, compliance professionals aren't out there looking for new jobs. In our survey at the start of this year, only 41% of them said they planned to find a new job in 2024. This compared to 67% of people job-hunting in risk and over 90% job-hunting in operations. Compliance professionals are naturally risk-averse, one compliance officer tells us: "They can be difficult to prise away from existing roles."

Anecdotally, the stasis is most extreme at the senior end, where some say compliance is full of uninspiring "failed lawyers" sitting in longterm jobs. By comparison, junior compliance professionals are said to be higher caliber and more enthused. 

"Imagine how they feel being managed by these mediocre people," says one compliance manager. Their options are to sit it out and hope the senior people leave, or to add technical skills to their retinue.  

"When banks say they will build-up compliance, what they really mean is that they will spend more on automation and AI," says another compliance insider. He advocates getting a masters qualification in data or analytics: "Compliance need to upskill, to learn how to code and to be able to spar intellectually with the quants," he says. As automation increases, the hope is that "genuinely dull and boring compliance jobs" like surveillance will give way to more interesting compliance advisory roles.

Most of all, though, compliance professionals need to ask for - and to get - more recognition and more pay. "We're paid less than front office or even legal staff and we often have to deal with front office's stupid errors," says one. "We don't get any praise when something goes right but are always criticized when something goes wrong."

"People rely upon my input daily, but I'm in a much lower bonus tier than risk," says another compliance professional on the buy-side. "This is a first line defense role that directly influences pnl. It should be compensated from the front office bonus pool." 

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Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

 

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AUTHORSarah Butcher Global Editor
  • Mi
    MisiterN
    23 hours ago

    A research study found that compliance directors still, to some extent, felt underappreciated and lacking in support. Nonetheless, the SMCR does place a greater burden on senior executives to take responsibility for behaviour and conduct, which does give compliance directors more status and prominence and facilitates wider participation in compliance activities within financial services companies. Additionally, despite competing accountability pressures between commercial and regulatory considerations, compliance directors are more confident about emphasising to their boards that more focus on regulatory compliance is in the long-term best interest of their organisation. https://aru.figshare.com/articles/thesis/To_what_extent_does_a_focus_on_accountability_promote_regulatory_compliance_in_the_UK_financial_services_sector_/25133663

  • BA
    BA101
    16 May 2024

    I couldn't agree more with this article. I worked in compliance IT for a Canadian investment bank in London and there's always been complaints about budget and funding to get the compliance right. There was an employment tribunal case against this bank back in 2018 where the complainant won the case saying that the bank had a box-ticking compliance culture. Nothing much has changed since then. Compliance is ignored since it costs banks money to ensure compliance with the regulatory rules, and banks are in the business of making money, not doing compliance. Its cheaper to pay a negotiated fine to the regulator (at least in UK) rather than make the bank compliant and lose out on all the money that can be made by remaining non-compliant.

  • Mi
    MissyB
    14 May 2024

    This article is spot on with the state of compliance; the most under-appreciated role in banking (especially in investment banking). However, a part of the piece that left me scratching my head is “Amidst all this, compliance professionals are expected to confront salespeople and traders when they detect wrongdoing. This can be difficult when you're paid far less than the people you're challenging.”. If any CO finds it difficult to confront a front office personnel of wrong doing because they get paid far less,

    they should walk out of the door immediately and find another profession. …. But I want to add one upside about being in Compliance that the article fails to mention. It’s still one of the most secured jobs in banking. It’s recession-inflation proof. Layoffs in Compliance are rare to non-existent. If you factor the times a trader/salesperson is out of the job in their lifetime with a CO career, the total lifetime compensation is not as disparaging. But yes, CO will never make as much since it’s a non-revenue generating area.

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