Magnifying glass choosing candidate

How financial crime compliance functions can attract, grow and retain talent


Financial crime compliance functions focus on attracting and retaining talent.


Three questions to ask

  1. How can companies attract and retain the best talent in financial crime compliance?
  2. How do we build a compelling career path within financial crime compliance?
  3. Are you competing at your best in a competitive draw for talent in financial crime compliance?

The competition for financial services talent rages on and has in many ways been amplified by the COVID-19 pandemic. Expectations around flexibility have become core workplace issues – in fact, the EY Work Reimagined Study found that more than 50% of workers globally would leave their current roles if flexibility expectations are not met once the pandemic subsides. The talent pool has also shrunk as some segments of the workforce have left the labor market due to pandemic impacts. These factors pose a significant risk to business leaders, where almost 20% of CEOs reporting revenue growth in 2020 in the EY CEO Imperative Study are making plans for headcount expansion in the coming year.

In financial services, risk and compliance talent remains a precious commodity, in particular those who specialize in financial crime compliance (FCC). In a globally connected, complex and highly regulated financial system that is navigating the rising tide of FinTech and crypto currencies, securing a capable workforce of compliance specialists, forensic investigators and legal professionals has never been more important.  

While demand for this kind of talent has always been high, it’s become even more competitive in today’s employees’ job market. Compensation has traditionally served as a powerful lever for attracting and retaining top talent; however, FCC talent in today’s market demands more, such as a transparent career path, a balanced personal and professional life and purpose-led work that aligns to personal values. 

Presenting the transparent career path

Historically, FCC career paths have not been well-defined. Outside of operational areas such as transaction monitoring and investigations, it has been difficult to define career paths that enable upward or lateral mobility given the diverse range of roles offered within an FCC organization. This variety of roles, coupled with the fact that many of the roles require technical skills, can make designing career paths within an FCC organization seem daunting.

There is a way, however. In most FCC organizations, roles exist in anti-money laundering, anti-bribery and corruption, fraud, sanctions, and sometimes cybersecurity. While each of these capabilities requires a unique set of technical skills, there is a set of common activities that bind these groups together —writing policies and procedures, interpreting laws or regulations, identifying product and services risks, conducting investigations and interacting with regulators. The skills needed to perform these activities are transferrable across FCC capabilities — particularly when augmented via upskilling and thoughtful team configurations, to close the technical skills gap. 


Example:

Swati joined the anti-money laundering (AML) team as a graduate in an entry-level analyst position (analyst 1). She has spent two years in her role, mostly focused on drafting AML policies and developing training programs. In this time, she has built an intermediate understanding of technical AML concepts such as know your customer (KYC) requirements, including customer due diligence (CDD) and when enhanced due diligence (EDD) is warranted. She is a high performer and is looking for her next challenge. She explores the role requirements for an analyst 2 position within the sanctions group and sees that much of the work is focused on policy design and training execution. While she feels confident in her ability to perform these tasks, she feels under-skilled in technical sanctions concepts. She visits her company’s learning management system and takes a course on sanctions basics. She successfully applies for the role under a mutual agreement that she will need to further develop her technical skills in the first year. She is assigned a mentor with strong skills in this domain and is provided a learning plan that gives her on-the-job and structured learning experiences to help her grow. She is in a supportive team where she has access to sanctions coaching both up and down her chain of command. Within 12 months, she is operating effectively in the role — and as a result, the bank has retained a high-performing employee while avoiding a costly external hiring and onboarding process.


The upside …

By establishing transparent career paths, FCC functions will benefit in several ways, including:

  • Sending a clear message to existing and prospective employees that the company is invested in career advancement, which will encourage employees to apply for roles and to stay.
  • Helping to deploy the existing workforce to areas in most need, which optimizes the company’s investment in human capital. For example, redeployment of resources to address temporary issues such as backlogs in name screening or KYC refresh volumes. Where this kind of cross-functional mobility takes place, it is more effective if there is a solid foundation of talent infrastructure.
  • Helping to reduce the likelihood of attrition. The cost of replacing employees is significant in terms of recruitment expense and the investment of time needed to interview candidates and onboard new joiners. This is particularly so in a remote work environment in which cultural immersion, networking and real-time coaching opportunities can be limited.

We are too big — and want to change

Over the last two decades, since the USA PATRIOT Act came into effect, many FCC organizations have grown quickly. This growth has been fueled by an increased number of regulations, which require more people to interpret and implement. Additionally, the number of commercial and retail bank accounts has ballooned, leading to increased volumes of client onboarding and transaction reviews. This has resulted in some reactive hiring practices to meet immediate needs - without necessarily focusing on the longer-term structure of the organization.  

Organizational structures require careful planning, and there are practical boundaries around the shape of an FCC organization. Not everyone can move up in the organization after a prescribed amount of time, as this would result in an imbalanced, top-heavy structure. As such, it is important to consider the career path options within an organizational structure as it is designed. For example, if spans and layers are wide (i.e., each manager has a large number of direct reports in a relatively flat structure), upward mobility opportunities could be limited. In that situation, consideration of lateral or “jungle-gym” (i.e., diagonal) role transitions may be required. Where this is the case, it may be appropriate to determine career paths based on generalist skills such as policy design, risk identification or investigations instead of highly specialized skills such as knowledge of specific regulations or laws. In reverse, where spans and layers are narrow (i.e., each manager has a small number of direct reports in a hierarchical structure), upward mobility opportunities may be more plentiful, with career paths organized around a narrower set of skills.

To offset some of the headcount growth within FCC organizations, banks have become more data-driven through the use of automation and analytics. As teams have grown, the need to find efficiencies as well as focus high-cost resources on more complex tasks has led to significant automation of previously manual or time-consuming tasks. For example, the use of robotic process automation (RPA) to web crawl when doing customer onboarding due diligence or investigating unusual customer behavior has increased. Another option to drive efficiency and limit the involvement of highly skilled resources in repetitive tasks is to outsource those tasks, such as first-level transaction monitoring alert reviews, periodic KYC refreshes and name-screening alerts, to a third party under a managed services arrangement.

The focus on automation is likely to continue, and digital acumen, technological aptitude and data synthesis are becoming baseline skills for the FCC professional of the future. Employees with strong data presentation skills are valuable as the consumption of data has grown exponentially. The ability to analyze, synthesize and compellingly present data to a variety of audiences, who are often senior, has become an essential skill. This is particularly true when we consider the expectations of chief compliance officers, risk committees and the business (which own FCC risk) to be up to date with real-time information to highlight the FCC risks within the organization. From a career-path perspective, factoring these digital expectations into roles as they operate today and into the future and facilitating the necessary upskilling will be a critical requirement within an FCC organization.

What now? Ten steps to help build career paths in the FCC organization

In today’s competitive labor market, investments in the employee experience are top of mind. Career paths within the FCC organization provide a unique opportunity as they help to distinguish the company’s brand while lowering human capital costs and optimizing the deployment of resources across the function. Investment in the foundational talent infrastructure will pay dividends in the long term. So why wait? There’s work to do.

The views expressed by the authors are not necessarily those of Ernst & Young LLP or other members of the global EY organization.

Summary

The competitive labor market continues across the financial services sector with executives focused on attracting and retaining top talent. Investments in the employee experience are critical to building a pipeline of strong talent – particularly for in-demand areas like financial crime compliance.

Related Financial Services articles

How firms can thrive by taking a stand in closing the divide

Firms will need to revisit their business strategy, products and services to achieve profitable financial inclusion.

15 Jul 2021 Peter Davis + 1