The Telegraph By Tim Wallace
12:15AM GMT 17 Nov 2015
The biggest worry for regulatory, compliance and anti-money laundering staff is the risk that they could go to jail if they fail to stop rogue colleagues breaking the law, according to a study from the British Bankers’ Association and LexisNexis Risk Solutions.
As a result, 54pc say they would leave the industry if an opportunity arose.
Banks have been recruiting compliance staff vigorously in recent years to cope with the rise in regulation, including rules designed to crack down on Libor manipulation, tougher rules on bonuses, stricter anti-money laundering controls and tighter affordability criteria on mortgages.
Failures in these areas have cost banks dear. The PPI mis-selling scandal has cost Britain’s banks £24bn so far, while the global investment banking industry overall has paid $219bn (£144bn) in litigation costs from 2009 to 2014, according to a new study from credit ratings agency Moody’s.
A shortage of relevant skills has driven pay up sharply as a result of the imbalance of supply and demand. Junior compliance staff can expect to see their pay rise by an average of 6.8pc on the year, according to recruiters Robert Half, with similar pay rises seen for senior operational risk staff.
That is more than double the 3pc average pay rise across the wider economy in the last year.
As a result, the report found that major international banks are spending £700m to £1bn per year on financial crime compliance.
Yet staff are still thinking of quitting because of the extraordinary pressures of the job.
“British banks are on the front line in the battle against financial crime. Both the nature of their business and regulatory design has positioned them as the first line of defence against money laundering, terrorism funding, and an expanding array of other illicit activities,” said LexisNexis Risk Solutions’ anti-money laundering director Chrisol Correia.
“Speaking to those who dedicate their careers to tackling financial crime reveals genuine fears about the ability of banks to continue to perform this function in the future, however.”
He suggests the authorities and banks should try to “work together to understand the future risks to adopt a proactive, rather than [maintaining] a reactive approach.”
The report added that extraordinarily high salaries in financial compliance careers can end up harming efforts to fight crime as the most able regulators and investigators in the public sector are tempted away to banks and other businesses, undermining the agencies’ work and making it hard for the state to work with industry.