Operational risk in Asia: it’s a finance job function with a seemingly secure future, offering vacancies galore at major global banks and pay rises of up to 35% if you change companies.
On top of all that, operational risk is one of the few roles in Asia in which banks are actually open to hiring people who don’t currently work in the function.
Candidates “literally come from all over the place”, especially for junior- and mid-level roles, says Chris Jackson, associate director, risk, at Pure Search in Hong Kong. The main hunting grounds are product control, compliance, audit, operations and finance, but increasingly a few front-office bankers in Hong Kong and Singapore are making the move.
“I’ve seen more people over the past 12 months coming from the front office to dedicate the next five to 10 years to a stable space where they can take greater ownership of their career trajectory – ops risk is often high on the list of things they would consider,” says Jackson. “It attracts people who want a move into a growth area and away from sunset functions where the longer-term view looks much bleaker in light of redundancies and offshoring,” he says.
Some banks also targeting risk professionals from other “high-risk” sectors – such as the pharmaceutical, chemical and airline industries – which have similarly advanced internal controls and business continuity plans. “Add to this mix some very strong people from risk advisory looking to break into financial services, and the candidate pool is broad,” adds Jackson.
The transition is not always smooth, however. “Businesses in Asia are trying to move talent, especially internal talent, into ops risk, but these people sometimes find it difficult because of the stand-alone, more influential nature of many ops-risk roles,” says Kate Harper, associate director, risk and compliance, Asia Pacific, at recruiters Eximius Group in Hong Kong. “And if you’re perceived as, for example, an auditor, it can be challenging to shake that off and recreate yourself as an influencer.”
The reason that employers in Asia are relatively flexible with their ops-risk recruitment is simple: they have urgent vacancies to fill – for both “first line of defence” (risk people embedded within the front office) and second-line (centralised ops-risk teams) roles, according to Harper.
“Hiring has increased substantially across the sell side and buy side in Asia, driven by regulatory factors,” says Alan Mait, a director at Profile Search & Selection in Hong Kong. “The US Fed, UK FCA and the Basel framework have, for example, demanded an effective and identifiable second line of defence. However, we are not seeing a uniform approach across banks – differences in risk structures, reporting lines, alignment to country and business divisions have all created new jobs. Just two to three years ago most risk functions were driven out of global headquarters, but because of increased business operations in Asia, banks need larger teams on the ground here.”
Mait says in Asia the “the full spectrum of banks – corporate, investment, private” and asset managers are hiring in ops risk. “US banks tend to lead the way and have more formalised structures in place.”
Another recruiter, who asked not be named, says the following firms have hired in ops risk in Hong Kong and Singapore this year: Barclays, Bank of America, Citi, Deutsche Bank, JPMorgan, Merrill Lynch, Morgan Stanley, Nomura, RBS, Standard Chartered, Wells Fargo and UBS. “Bigger commercial banks such as HSBC have also been active – largely across more specialist areas like IT operational risk,” he says.
On the buy side in Asia, Fidelity, Blackrock and Alliance Bernstein are among the firms expanding in ops risk; while in insurance, AIA, Prudential and QBE are hiring, particular for senior roles.
Rising recruitment has helped to push up pay, with experienced ops-risk professionals typically receiving rises of between 20% and 35% when they change employers in Hong Kong, says Harper from Eximius Group. Front-office aligned ops-risk professionals in the territory have been the biggest beneficiaries and can now earn annual base salaries of HK$2m (US$258k) or more, she adds.
If you’re moving into ops risk from another mid-office function, however, expect a flat salary – or a pay cut if you’re from the front office.
And for any candidate contemplating a career change, beware that banks are more interested in your management and communication skills than your risk knowledge. “Operational risk professionals now need to be relationship builders and stakeholder managers. The ability to process regulatory requirements, translate them into business language, influence folks across the business and communicate globally is hugely sought after,” explains Harper.