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Financial Services Market Update




There has been a continued strong demand for quality candidates in Corporate Governance across all Financial Services, including Banking, Securities, Asset Management and Insurance. Hiring for experienced Compliance Officers has remained buoyant throughout the second half of 2014. This has been a mixture of new and replacement headcount. There is still strong demand for professionals with specific knowledge and experience within compliance in areas such as AML, Equities and Fixed Income Advisory and Compliance Monitoring & Testing.

There has been a significant increase in demand for experienced Compliance Officers within the asset management industry. One reason for this is that we have seen an increase in the number of investment managers from overseas looking to either establish a new office in Hong Kong or to expand their current business and upgrade their license. As such they are seeking candidates with proven experience of going through the registration process with the SFC and establishing internal policies and procedures in line with local regulations and global standards.

Within Big 4 Accounting firms we have seen continued growth, particularly on the Advisory side in GRC (Governance, Risk and Compliance) as firms look to develop business in the increasingly regulated environment of FS. These teams have been seeking candidates with relevant industry experience in areas such as AML, Financial Crime Compliance, License Applications, Enterprise and Operational Risk Management.

Although demand for candidates is high, there is still a very limited supply of qualified candidates who are actively looking to move. As a result, we are seeing more companies open to hiring candidates from other areas of the business such as Front Office, Operations and Legal, especially for more junior growth hires.

Compensation for Compliance remains very high with firms paying above market rates to bring in candidates with the relevant skill sets. Most candidates are being offered aggressive counter-offers to stay as firms know that is very difficult to find talent in the market.

Internal Audit:

Demand for Internal Audit candidates tends to be more replacement hires in Securities/Banking and a combination of new headcount and replacement hires for the Insurance side. Smaller firms such as Asset Management tend to only have a small team or outsource their operations to an accounting firm.

We have seen strong demand in the Technology Audit space with a very limited talent pool as global investment banks typically only have one or two people based locally. There are new teams of AML Compliance Audit being set up and hiring has been at Associate to VP level for mainly US and European banks.

Given the shortage of qualified candidates looking to move, we are seeing some movement from others areas such as Product Control and Risk Management into Internal Audit. Banks continue to prefer candidates with commercial experience, rather than hiring directly from professional firms.

Operational Risk:

With the implementation of Basel III and Solvency II, we are starting to see an increase in demand for candidates across Financial Services and Insurance in Enterprise and Operational Risk Management. Despite the increase in demand, the Operational Risk teams within global firms are mostly small so the demand is still relatively low in comparison with audit and compliance. Many candidates will move internally from audit or compliance into operational risk. However, we expect continued demand in this area for the foreseeable future.

Under pressure from the US and UK regulators, global investment banks are also taking action to strengthen the first line of defence. Investment Banks have been actively hiring people from a risk and control background to set up new teams in front office to do project management, testing and supervisory control.



Securities (Sell-side) Operations:

Hiring continues to be strong for Analysts, mostly across Associate roles. In Q4 2014 and Q1 2015 we have seen more companies utilising VPs to manage Middle Office. This could be due to lack of managerial talent and too many junior staff members in the team. Product-wise we saw more openings in Client Service space, especially for PWM.

In recent market news, large investment banks are anticipating more regulatory-driven hires next year in the areas such as KYC, regulatory reporting and tax operations. This is being driven by the change regulations for cash securities as well as client on-boarding regulations.

Asset Management (Buy side) MO/Ops:

There is continued high demand for Client Service/Reporting professionals for institutional and retail funds, however almost all of these are replacement hires.

The mutual fund market is very active and there is high demand for marketing support professionals to prepare sales materials (brochures, prospectus, pitch books, etc.). In many organisations, the operations side of Mutual Funds has been outsourced to third party vendors.

Hiring continues to be higher at the associate-level, as compared to juniors and VP.

Finance, Accounting and Product Control:

Regulatory Reporting was the most active area of finance, in terms of hiring. Many banks are working on automating the HKMA reporting process to improve accuracy and efficiency, and as such, candidates with strong experience in HKMA reporting and system automation projects are highly sought after.

The trend to off-shore Finance and Product Control functions to lower-cost locations such as Philippines and India continues. As such, hiring within areas such as Management Reporting and Product Control is slower, covering mainly replacement hires. Equities Product Controllers have been highly sought after, with companies willing to offer an attractive increment to hire from competitors (more than 25% increase on base salaries).

There is strong demand for Management Reporting candidates with Asia Pacific exposure and strong stakeholder engagement experience, with a shift from standard reporting to business partnering roles. Candidates require comprehensive analytics experience across the finance function in order to closely support the business.

In Hong Kong, hiring within taxation was relatively stable in 2014, as it has been over the past few years. There were a few replacement hires across the banks and securities firms; however the main movement was seen in Big 4 candidates at the senior manager level who have moved into the major insurance groups in Hong Kong.

We have seen an increase in hiring within Corporate Treasury across the global investment banks as many are looking to add Treasury professionals in Hong Kong to support their Asia businesses instead of centralising the function in their overseas headquarters.

Contract hiring was active in 2014, as banks continued to be more cost conscious. This is most prevalent in banks that have off-shoring plans in the pipeline.

Chinese and local banks continue to be the most active in hiring.