Pay Raises for Bank Risk Officers in Asia Trump New York

Salaries for banks’ risk and compliance officers in Singapore and Hong Kong rose at about twice the pace of pay for similar positions at New York and London firms amid a shortage of skilled staff members, a recruiter said.

Pay excluding bonuses for people who changed jobs in the Asian cities rose as much as 20 percent this year, compared with 10 percent in the Western hubs, said Neil Owen, a director for Robert Half International Inc. in London. A senior official in Singapore is paid as much as S$250,000 ($201,000) annually, compared with Hong Kong’s HK$1.8 million ($232,000), London’s 175,750 pounds ($281,000) and New York’s $323,595, data compiled by the firm show.

The faster wage gains reflect the smaller pool of experienced professionals available in the Asian cities, Owen said. It also underscores the rise in demand for such skills as policy makers globally tighten regulations on banks’ capital buffers and crack down on offenses from money laundering to rigging of interest rates. Pay for risk and compliance officers rose more than for other finance jobs in 2013, Owen said.

“The compliance team in a large bank consisted of a handful of people before the financial crisis,” Owen, who is the global financial services practice director, said in a Nov. 6 telephone interview. “There’s been such a significant increase in the types of functions that are required, there’s been so much change coming down from the regulators, the types of processes that need to be implemented.”

Increased Regulation

Banks and regulators have clashed over the severity of capital, indebtedness and liquidity rules that were set out in 2010 as part of an overhaul of the banking industry to avoid a repeat of the 2008 global financial crisis. The credit crunch that followed the collapse of Lehman Brothers Holdings Inc. caused at least $2 trillion in losses globally.

More regulations are in the pipeline, with the U.S. putting final touches on the Volcker rules that would curtail proprietary trading and the Basel Committee on Banking Supervision drafting more guidelines to curb risk taking.

The biggest banks -- including HSBC Holdings Plc and JPMorgan Chase & Co. -- have also been told to tighten oversight after regulators were angered by lapses in internal controls on issues such as money laundering, terrorism funding and the manipulation of benchmark rates and currency markets.

HSBC reached a $1.9 billion settlement with regulators in December over claims that lax oversight by top executives gave terrorists and drug cartels access to the U.S. financial system. The bank has increased its compliance staff by 46 percent this year to 4,894 people, according to Gareth Hewett, a spokesman for the bank in Hong Kong.

Financial Crime

“We will look to increase this further in 2014 as we continue to build our financial crime and regulatory compliance capability globally,” he said in an e-mailed response to queries. The London-based firm has raised spending on compliance staff costs by 40 percent since September 2012.

JPMorgan, which faced probes into mortgage bonds, energy trading and hiring practices in Asia, has set aside or spent $28 billion since the start of 2010 for expenses tied to regulatory matters and litigation.

The New York-based firm isn’t alone: the six biggest U.S. banks have piled up more than $103 billion in expenses for settlements, lawyers and litigation since the financial crisis, according to data compiled by Bloomberg in August.

In Demand

JPMorgan’s Chief Executive Officer Jamie Dimon told the lender’s more than 250,000 employees in a Sept. 17 e-mail to prepare for more legal woes while the bank undertakes an “unprecedented effort” to comply with regulations. The lender had assigned at least 5,000 people to compliance, he said.

Marie Cheung, a Hong Kong-based spokeswoman at JPMorgan, said when contacted by phone today that the bank had no further comments beyond those made in Dimon’s e-mail.

“In each financial-services hub globally, there’s absolutely a demand for risk and compliance candidates,” said Owen, whose firm conducts annual surveys of pay for the banking and financial services industries. Menlo Park, California-based Robert Half is a recruitment company with offices in 21 countries from Chile to Australia.

Aggregate pay for the banking industry may climb this year, partly because more compliance and legal staff were hired, Michael Karp, chief executive officer of New York-based recruitment firm Options Group, said last month. Meanwhile, global investment banks led by Goldman Sachs Group Inc. are preparing to shrink compensation for individuals amid pressure from investors to improve return on equity.

‘Regulatory Complexity’

Salaries in other financial-services jobs in Singapore and Hong Kong including client servicing, loans administration or mergers and acquisitions advisory haven’t changed in the last 12 months, data compiled by Robert Half show.

Standard Chartered’s private banking unit in Asia has added 25 percent to 30 percent more risk-management professionals in recent years, Rajesh Malkani, the division’s head for Northeast and Southeast Asia, said in an interview in Singapore, without disclosing specific numbers.

“Risk management, obviously with all the regulatory complexity, has become something that we’re all investing in,” Malkani said last month. Hiring risk management specialists has been the “biggest challenge,” he said.

Bank of Singapore Ltd., the private banking arm of Oversea-Chinese Banking Corp., has also added more people in risk management and compliance than it has in sales or relationship management this year, Chief Executive Officer Renato de Guzman said at an Oct. 14 event in Singapore, without providing specifics.

Singapore criminalized from July this year the use of financial institutions in the city-state by clients to evade tax, and has given firms until June 30, 2014 to review the tax legitimacy of legacy assets booked by customers.

“All of a sudden you have new rules and new standards,” de Guzman said. Risk and compliance “is a good profession to get into.”

Salary Ranges of Professionals Working in Risk and Compliance

New York: $150,165 to $323,595
London: 87,250 pounds to 175,750 pounds ($140,000 to $281,000)
Singapore: S$140,000 to S$250,000+ ($112,000 to $201,000+)
Hong Kong: HK$763,000 to HK$1,800,000+ ($98,000 to $232,000+)

New York: $92,708 to $187,178
London: 64,500 pounds to 90,250 pounds ($103,000 to $145,000)
Singapore: S$80,000 to S$150,000 ($64,000 to $120,000)
Hong Kong: HK$450,000 to HK$920,000 ($58,000 to $119,000)

Source: Robert Half