blue suite: risk and compliance trends in hong kong 2020.

 According to Trend Micro, there were 37,700 cases of COVID-19 related cybersecurity threats detected in Hong Kong SAR in the first half of 2020. The number of technology-based crimes has also doubled to more than 6,400 cases during the same period, which accounted for US$196 million in losses.

As more physical activities are being replaced by digital technologies, businesses and consumers are inevitably more vulnerable to online threats and digital crimes. To counter the anticipated increase in digital threats, the Hong Kong Monetary Authority issued a circular, which lists the measures that financial institutions should implement to safeguard against money laundering and terrorist financing. Measures include mitigating risks through data sharing and reporting suspicious transactions to relevant local authorities.

While these measures may act as a deterrent against criminals, financial institutions are still doubling down on anti-money laundering (AML) and counter-terrorism financing (CTF) compliance and controls to create an ironclad barrier against external threats.

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the impact of COVID-19 on the labour market

Having acknowledged that the pandemic will be with us for a long time, some banks have lifted their hiring freezes in the second half of 2020. We’ve observed an increase in jobs within governance, risk and compliance, as companies expand their teams and build their capabilities in this new environment. Even though hiring activities may seem to have resumed, these opportunities are not evenly distributed across all the banks in Hong Kong SAR.

Globally, financial institutions continued to maintain a cautious approach on managing their workforce. Asia markets are quicker to recover during this pandemic. As companies resume work, regional fintechs and banks are building their compliance and risk management teams to operate efficiently in the ‘new normal’. On the other hand, international banks do not see the rush to hire risk management and compliance management experts as they would already have an established internal team. Furthermore, companies are still mitigating the business risks caused by the coronavirus and are more likely to only revise their hiring plans once they account for the actual impact to revenue at the end of their financial year.

It is always a challenge to find talent for niche roles that require a specific set of skills and in-depth industry knowledge. The expansion of Chinese companies has also driven the demand for trilingual candidates who are business-proficient in Mandarin, Cantonese, and English languages. In-demand talent are also less likely to switch employers this year, as they place a higher value on job and income security during a pandemic. With an increasing talent demand, employers are more willing to meet the candidate’s salary expectations, especially if they are of the right job, boss and culture fit for the role.

self-starters would thrive in virtual banking

Even though they play in the same field, virtual banks actually function in a vastly different environment. Employees must have a start-up mentality and a high passion for technology to thrive in virtual banking in Hong Kong. Unlike traditional banking, virtual banks are not as structured in terms of reporting lines, working hours and even remuneration packages. For example, senior-level professionals are often offered stock options, which would create an unwavering, committed investment in the business performance.

Virtual banking, with its sea of opportunities in a soon-to-be cashless world, would continue to expand their headcount and strengthen their capabilities. Self-motivated professionals who are able to work in a fast-paced industry, such as retail banking, are more likely to have the traits to excel in virtual banking.

Faced with heightened competition, traditional financial institutions are also investing in new technologies to create new digital products and services. More new products and services for consumers would mean more data to manage and more transactions to track. Digitally-savvy risk and compliance management professionals would be highly sought-after from the different verticals within the banking industry.

hiring trends in the banking sector

COVID-19 has driven the increased hiring activities for compliance and risk management. However, even though banks are keen to hire, they may look for avenues to reduce hiring costs, such as recruiting fresh graduates and training them for a career within the firm, merging some roles to hire more experienced professionals while cutting headcount, or outsource some jobs to an independent contractor.

heightened demand for sanction officers

The political tension between the east and west has driven the rising demand for sanction officers. Given the rapid changes in sanctions, a solid team of experienced experts can help map and resolve potential breaches and liabilities before they arise.

Chinese financial institutions that are planning to build their capabilities in this area are hiring sanction and litigation experts with a long track record working in the US market. And the larger their operational presence is outside of mainland China, the larger the team will be. However, the current supply of candidates is not meeting the spike in talent demand. To address this talent shortage, some banks and financial institutions are investing to upskill their employees and expand their job responsibilities to meet the market’s requirements.

changes in talent demand

As the pandemic drags on, companies across all industries, particularly those that are more impacted by border control measures, will need to restructure and diversify their business or liquidate. There is hence a spike in the demand for candidates in credit risk and special asset management who specialises in debt or loan restructuring and liquidation. Professionals working in debt collection and recovery are also highly sought-after to manage the escalating amount of defaulting debts.

Within compliance, employers are looking for candidates who are knowledgeable in traditional AML advisory and are well-versed with the AML systems as well as FCC compliance. On the FCC front, there is notable talent demand for economic sanction advisory experts. Smaller firms with leaner operations have a preference for talent with a combination of AML and FCC skills set and knowledge to better manage headcount costs.

With a better understanding of COVID-19 and how to manage it, we expect more firms to resume their workforce planning next year. Companies are no longer in the liberty to freeze hiring plans any longer if they want to operate in an increasingly complex and competitive environment.

changes in candidate expectations

Our research has shown how the pandemic has altered the candidate’s perspective towards income and job stability in their job search. Many candidates are interested in the company’s financial health as it is a determinant of how stable the job will be in the long-term. As compared to international banks, financial institutions with a strong Asian presence are less likely to make any large-scale redundancy. Therefore, candidates are more likely to hold out for a regional or local bank as opposed to joining a more prestigious employer brand.

Employees and candidates are starting to place a higher value on being able to work in a cohesive and collaborative environment. Besides working in a team with a good manager, candidates are also interested to know more about the skills development programmes that employers can offer.

In view of the current market conditions, job seekers have also realistically adjusted their salary expectations and are more aligned with the consequences of the worst pandemic faced in our lifetime. On average, the salary increment when switching employers has seen a reduction from 20% to 10%.

we know the risk and compliance talent you’ll need

If you are looking for specialised end-to-end recruitment services to identify and secure talent or a job in the risk and compliance industry, please reach out! We’d like to hear from you.

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Rouella Landicho

Senior Manager, Banking & Financial Services

With close to 15 years' experience in recruitment specialising in compliance and risk management, Rouella has a pulse of the latest workforce trends and leads her team to support clients’ talent recruitment strategies by tapping into her large network of experienced professionals. In her role, Rouella stays up-to-date with the latest industry updates and new proposals from financial and monetary authorities, effectively using market insights to advise her clients on how they can strengthen their workforce capabilities to protect their clients and company.

We know that hiring great talent who can protect and advance your business growth can be challenging in a market that is in full-employment. With a team of banking specialist recruiters, we are confident that we can match you the perfect talent. Connect with us for more market insights or your upcoming hiring needs in banking and financial services.

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