Banking Compliance: Trends + Insights For A New Era

April 16, 2021 Stephanie Klemperer

banking compliance

The beginning of the year also marked the start of a new presidential administration. President Biden has many immediate priorities on his agenda, but some others are beginning to take shape with respect to banking as we get further into his presidency. While compliance has been an ongoing concern for financial institutions, Trump-era regulatory rollbacks allowed them to scale back their efforts. The Biden administration, however, has made several announcements and cabinet appointments that imply a renewed focus on regulatory banking compliance.

Just recently, Treasury Secretary Janet Yellen, said in a staff memo that “fighting illicit finance” would remain part of department’s ‘usual business,’ which she described as the “essential work that ranges from overseeing financial markets, to managing the nation’s finances, to strengthening the global economy and fighting illicit finance in partnership with America’s allies.” This combined with Biden’s choices to head the OCC, SEC, CFTC, mark a return to Obama administration priorities and enforcement activity. As result, many Trump-era regulations will likely be subject to review.

The timeline for these changes remains uncertain, but there are clear signs that banks and hedge funds are already taking the steps to prepare—especially as it pertains to financial reporting, regulatory reporting, AML, control and risk. This is opening the door to a new era of banking compliance, and resulting in some interesting trends! Here’s what we’re seeing as we look to the year ahead.

Expect more proactive hiring

While we’re still in the early stages of the administration, financial institutions are anticipating changes in the regulatory landscape. “The most strategic firms are starting to prepare now by building more proactive compliance programs,” says Paige Vetterlein, a Senior Director at The Execu|Search Group who leads the Financial Services Contract Staffing division. “To build these programs out, they know they need to start hiring now. This will ensure they can remain nimble and navigate new regulations with more ease and less stress.”

This surge of hiring is happening now across different areas of compliance, including:

  • Trade Surveillance
  • AML
  • Risk (including risk management, risk analytics, 3rd party risk)
  • KYC

Bottom line: Financial institutions will aim to be less reactionary and will need to shore up their compliance teams as a result. Now is a great time to explore the market and see what’s out there! Explore banking compliance jobs here.

Consulting + remote opportunities will remain prevalent

A lot of compliance work (especially in a reactionary environment) is project-based in nature, so employers typically hire on a contract or consulting basis. Hedge funds and banks will continue to utilize this flexible staffing strategy as they adapt to evolving regulatory requirements. As compliance once again becomes a core business focus, you may see some of these roles shift to full-time positions.

At the same time, firms are expected to continue hiring remotely—at least until the pandemic is behind us. Anticipating tighter banking compliance regulations, firms know there is a lot of work ahead of them. Realizing that people have relocated and that there are strong skillsets outside of their geographical location, they are increasingly open to hiring remote employees.

Bottom line: Even if you have not previously considered them, be open to consulting and/or remote opportunities. They can be a great way to get your foot in the door, forge new industry connections, and make an impact in a relatively short amount of time!

A shift toward a more data-driven approach and technology-enabled model

The pandemic has changed the way we all work, bringing conversations about data and technology to the forefront. Utilizing what they’ve learned throughout the pandemic, firms are expected to move toward a more streamlined compliance model and look to enhance the connectivity of shared data. This will better enable compliance functions to take a more active role in shaping the firm’s strategy and support growth. However, accomplishing this in a way that maintains and demonstrates control of data, while complying with new regulations will be crucial.

Bottom line: As financial institutions focus on data and technology, compliance officers will require a new set of skills. Core competencies such as a strong knowledge of laws, rules, and regulations will remain important, but professionals should strive to gain more experience with data, analytics, and technology.

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