President-elect Donald Trump may be promising to trim back US financial laws, but in Asia the regulatory burden is still rising – so much so that compliance staff are throwing in the towel because their hours are too long.
Across Asia there are 53 financial regulatory change every day on average, according to Thomson Reuters. And in recent months the Monetary Authority of Singapore has fined DBS and UBS, and closed the local offices of BSI and Falcon Private Bank in a clampdown on alleged money-laundering by Malaysia’s scandal-hit 1MDB fund.
“With these events, we’re definitely seeing increased scrutiny by MAS in terms of the AML framework of financial institutions in Singapore,” says a financial crime specialist at a US bank in Singapore.
“This means more work for us, such as increased liaison with the regulator, enhancements to our AML programme, and remediation work to ensure we meet current regulations,” he says. “Whenever there’s a big regulatory change, there’s a lot of manual work due to the limitations of our systems. This is very time consuming and distracts us from other equally important work.”
“The tightening of financial regulations has also made the client-onboarding process more complicated, resulting in more work and longer waiting times for clients,” adds a regulatory analyst at a Singapore bank.
These compliance officers aren’t alone in their concerns – workloads and hours are growing across the function in Singapore and Hong Kong.
“Long working hours is now the key complaint we hear from compliance candidates. At some of the larger banks working past 10pm is not uncommon,” says Richard Fennelly, a lead consultant at G.R.A.C.E. Recruitment in Hong Kong. “And at US banks in Asia it’s now standard for senior people to take late-night calls several times a week.”
Headcount increases in Asian compliance teams have not been large enough to keep workloads under control. In particular, pressure is building on “those clearing transaction-monitoring backlogs to ensure nothing was missed originally. It’s common for these teams to work late into the night and even on weekends,” says Fennelly.
Another Hong Kong recruiter says he takes calls every week from financial crime professionals looking to change banks because of on-the-job pressures.
“In HSBC in Hong Kong, for example, they’re still improving AML controls after the $1.9bn fine in 2012, so the environment is high pressure there,” says the recruiter, who asked not to be named. “Some people say they’re often working until midnight and it’s severely impacting their home life.”
HSBC is far from an isolated example, however. “In the last month alone I’ve spoken to several people who resigned from one of the other large global banks in Hong Kong purely due to increased workloads and being required to stay in the office until 10pm or later most days,” says Fennelly. “They didn’t secure roles elsewhere, they simply got to the stage where the workload became unmanageable.”
“The frequency of change in regulations is mind boggling,” adds Pathay Singh, managing director of recruitment agency Compliance Grid. “Even big regional Asian compliance teams who have specialists engaged in the interpretation of the changes are constantly playing catch-up.”
“These days banks want more compliance people who face the business – and the pressure on them, in particular, is growing,” says Duncan Mackay, director at CA Compliance Talent Solutions in Hong Kong. “It’s not easy to stand up to a trader and tell them they’re wrong. Compliance is more real-time now; being reactive isn’t good enough.”
But while Asian compliance professionals are increasingly willing to move banks in the hope of better work-life balance, few are quitting the function altogether because job security remains strong and pay continues to rise.
“Generally the stress in compliance feels more positive than negative,” says the Singapore financial crime expert. “Through our work we can send out a strong message to the rest of the business that the compliance function now plays an important role in ensuring the bank is successful.”
“All these new regulations also make compliance officers more valuable to the bank as we protect it from reputational and financial damage,” adds the compliance analyst at the Singapore bank.
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