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RETAIL RING FENCING LEADING TO COMPLIANCE HIRING HEADACHES

RETAIL RING FENCING LEADING TO COMPLIANCE HIRING HEADACHES

Reports suggesting that the ringfencing of retail banking operations will be far stricter than many bankers had anticipated has set alarm bells ringing from both a cost and hiring perspective.  That’s according to Michelle Myers Head of Compliance at city recruitment specialist Twenty Financial Services

“Our feedback is telling us that the banks are fairly divided on the actual practical applications of  ring-fencing because at this stage no-one really knows how & lsquo;thick’ the walls are going to be. If the final report insists on measures as strict as the current & lsquo;Chinese Walls’ for example then it is conceivable that an organisation would have to install two compliance departments.   This would have obvious implications from both a cost and talent perspective.”

Myers believes that the skill sets required would be very different for these new and separate departments. “ While from an investment banking perspective, compliance professionals have had to be front office facing in a business partner capacity, the banks would also need a more audit and control approach to deal with the financial segregation aspects – a bank would have to show transparency in the ownership, entities and legal structuring of the parent companies and prove  that the ring-fence is working.”

Myers’ view is that even if the ring fence  is not as tight as has been feared an element of rebalancing will be required if compliance functions are to cover both investment and retail operations.  “Those compliance professionals who have been hired specifically for an investment bank may not have all the correct skills for the retail banking side as typically, compliance officers specialise in investment or retail specific compliance rules and products.”

The upshot is that against a backdrop of ever evolving regulatory change (Dodd-Frank, MiFID 2, RDR, change of regulators etc) and with the finer detail still undefined, it’s a rather challenging time.  “There’s a fairly broad skill set required at present – it’s a far more strategic role than the old box ticking image and the real need is going to be for those who can offer regulatory interpretation. Consequently, candidates will need to be objective and flexible in their approach and job search, in this ever-changing market and employers are going to have to define what they need with the utmost care.”

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