Where the City’s brightest thinkers get a few things off their chest. Today, Lucy McNulty, editor of Following the Rules, takes the Notebook pen.
The City needs to take better care of its compliance workers
The long-predicted City jobs shake-out is now in full swing and it seems like no one is safe.
Several of London’s banks have been reported to be cutting their compliance teams, pausing hiring in these departments or outsourcing what they can to cheaper locations. Recruitment firm Barclay Simpson saw vacancies for City compliance roles more than halve between early 2022 and late 2023. Of course, it was a tough end to 2023 and difficult times mean difficult decisions.
But compliance bosses in some pockets of the Square Mile fear the City could be going too far. One UK bank compliance chief tells me that job cuts, hiring freezes and outsourcing have hit junior and middle-ranking controls staff the hardest and created a concerning talent gap in the compliance functions at London’s banks.
Nick Evans of Barclay Simpson says that some banks are also “saving money by promoting cheaper, more junior talent to their senior ranks”. Worse still, headhunters fear a lack of investment in the department could prompt its most senior workers to quit, further exacerbating so-called “brain drain” within the function.
Alex Keetch of executive search firm Halsey Keetch told the Following the Rules podcast last month that there was now a “flight risk” at the senior ranks of finance firms’ risk and regulatory staff. “There’s less investment into risk and regulatory functions at the moment and more focus on what the next big driver of growth is going to be,” he said, adding that that could lead to disengagement and “resourcing issues”.
That this comes as City firms face an increasing regulatory burden is, of course, concerning. Left unchecked with the combination of under-investment in compliance and the growing regulatory pressures on the function will mean “people will drop balls”, a second compliance chief tells me.
But it need not be too late. Hiring and training up decent compliance talent doesn’t need to cost the world.
And at a time of heightened regulatory change and increasing focus on governance, the City needs strong compliance teams more than ever. After all, investing in decent controls will likely prove considerably cheaper than dealing with the aftermath of a blow-up.
Will the City log off social media (as compliance logs on)?
Last month, a campaign to keep children off smartphones and social media went viral. The group’s founders say they want to embolden parents to keep their children away from social media until they are at least 16, citing various studies highlighting the damage that its use can inflict on impressionable brains.
Today’s professional masses are well versed in the dangers of investing too much of themselves in these platforms, having grown up with some of the largest of them.
A number of us have now chosen to sign off social networks completely or try to use them sparingly.
Even so, when Rob Mason of tech firm Global Relay told me City workers could be asked to disclose their social media activity to compliance in response to a regulatory crackdown on misbehaviour outside the day job, it sparked concern.
One City veteran texted it would be a “disproportionate intrusion into people’s lives”.
But whether or not Mason’s predictions come true, the prospect alone of compliance logging onto your Instagram could provide City workers with the most compelling reason yet to log off for good.
Glass ceiling movement ‘not good enough’
Female representation in financial institutions’ senior management “edged up” from 34 per cent in 2022 to 35 per cent in 2023, according to the latest report from think tank New Financial on the progress of 202 signatories to the government-backed Women in Finance Charter. Aviva chief Dame Amanda Blanc said of the findings that an annual one percentage point movement was “not good enough”. Quite right. Finance watchdogs are expected to publish rules to boost diversity and inclusion in the City later this year. They cannot come soon enough.
Quote of the week:
“We’re not going to be able to turn things around straight away.”
Rachel Reeves, the shadow chancellor, manages expectations as to what it is possible for a Labour government to achieve
What I’ve been reading: Wandering Souls by Cecile Pin
Written by a writer of Vietnamese heritage and longlisted for the 2023 Women’s Prize for Fiction, this is a poignant, fictionalised account of a family forced to flee Vietnam in 1978 in the hopes of a better life elsewhere. The book follows the family members that survived their escape over several decades as they seek to move on from the trauma of their refugee status amidst racism, abuse and exploitation. Jumping frequently between the 1980s and the present day, it offers both food for thought on what life would have been like for immigrants in Thatcher’s Britain as well as an opportunity for timely reflection on today’s refugee crisis.
A tough but essential read. I couldn’t put it down.