Risk and compliance specialists in high demand at banks

At a time when banks are trimming staff to lower expenses, one area of hiring remains hot: risk and compliance.

Banks, wary of being penalized for violating new regulations introduced since the financial crisis, are staffing up on risk and compliance personnel in Charlotte and elsewhere.

The risk and compliance field is “one of the hottest jobs in banking right now,” said Nicki Carrea, branch manager for the Charlotte office of placement firm Robert Half International.

Federal data on Charlotte job growth in risk and compliance is not available, but the field is growing. Compliance officer employment in the finance and insurance industry is projected to rise 11.1 percent nationwide from 2012 to 2022, according to the U.S. Bureau of Labor Statistics. That’s more than double the 4.8 percent growth in more traditional banking jobs over the same period.

In Charlotte, banks are turning to search firms for help in filling the highly specialized risk and compliance positions. This year, Ascendo Resources added a banking division to its Charlotte operation to meet rising demand for those jobs.

Industry officials say competition for talent is strong in Charlotte. Officials at the Federal Reserve Bank of Richmond’s Charlotte branch say they are competing with banks to fill similar positions.

Search firms say their job is not easy. Charlotte has a deep pool of financial services talent – but the pool is much smaller when it comes to people with experience navigating highly complex regulations, search firms say.

“There’s just a continuing evolution of the compliance mandates, and finding professionals current on all the regulations affecting the banks is a challenge,” Carrea said.

Banks of all sizes are looking to fill a variety of roles, from compliance officers and analysts to internal audit positions, she said. Lawyers with expertise in that area are also in demand.

Rules are still being introduced under the 2010 Dodd-Frank Act, which was designed to make sure lenders steer clear of risky practices that fueled the crisis. For example, requirements that lenders ensure borrowers can repay home loans took effect in January.

Other new requirements large banks must comply with since the crisis include stress tests conducted by the Federal Reserve. Those are designed to make sure banks would be able to keep lending in an economic downturn. Banks that fail the tests aren’t allowed by the Federal Reserve to return capital to shareholders through dividend increases or stock repurchases.

Banks say their compliance costs have shot up as a result of new regulations. Even smaller banks that outsource much of their compliance work are spending more for those services.

“Where we’re spending it is primarily with accounting firms and attorneys, both in terms of interpreting regs and telling us what we need to do and stepping up our internal review of our lending and deposit compliance issues,” said Wes Sturges, president of Charlotte-based Bank of Commerce, a one-branch bank that focuses on commercial clients.

Sturges said higher compliance costs stemming mostly from Dodd-Frank were among the reasons his bank agreed to be acquired by HomeTrust Bancshares of Asheville. The deal was completed this month.

“We just don’t have a large enough base of business to spread the increased costs over and still be competitive,” Sturges said.

As demand for compliance jobs rises, so does compensation.

The national average starting salary for a chief risk officer in the financial services industry ranges from $148,000 to $225,000 in 2014, up 3.5 percent from last year, according to Robert Half. Chief compliance officers at large financial services companies are being paid starting salaries of $154,500 to $229,500, up 3.9 percent from last year.

‘Wars going on’

Since the financial crisis, banks have reduced headcount, partially to lower expenses as they try to grow revenues amid tepid demand for loans.

Many of the slashed positions have been in banks’ mortgage operations. Last year’s rise in interest rates dampened demand for home-loan refinancings, leading to job cuts in those areas. Also, banks have cut staff in their troubled-mortgage units as the number of delinquent home loans continues to fall.

In contrast, demand for risk and compliance jobs has grown so much that employers find they have to move swiftly when looking to hire.

“There are literally wars going on to capture lawyers in Charlotte, in Buffalo, N.Y., and New York City,” said Richard Hunt, president of the Consumer Bankers Association, a trade group that represents large U.S. banks.

Search firms say the need for risk and compliance personnel is outpacing supply of talent in Charlotte.

“There’s definitely a shortage of talent here,” said Jacque Wilson, a managing director for Ascendo Resources.

“There’s only a finite number of people that have that experience, and ... each function of risk and compliance is changing daily due to the regulations, so you’re (the banks) constantly having to create bigger and bigger teams,” she said.

Also driving the talent shortage: relatively high turnover, stemming from the demanding nature of risk and compliance jobs.

“It’s a lot of long hours. It gets mundane. If you’ve been doing it for 15 years, right out of school, sometimes you look up from your desk and say, ‘What else is out there?’ ” said Michelle Fish, CEO of Charlotte-based search firm Bankston Partners.

Competition for positions

New companies opening offices in Charlotte could further strain the talent pool of people with risk and compliance skills.

In July, Princeton, N.J.-based Spectra Group announced plans to open an office in Charlotte focused on helping banks comply with new regulations. The office will employ 250 people.

Aditya Narra, president of the company, said he plans to partner with Charlotte universities to hire recent graduates as a way to work around a shortage of talent.

“Charlotte has its own (talent pool) limitations,” he said.

Jody Martin, a credit-risk specialist in the Federal Reserve Bank of Richmond branch in Charlotte, said the Fed is also competing with banks to fill positions.

“When we’re recruiting, we’re looking for the same skill set and very often we’re looking for people with industry experience,” Martin said. “Depending on what your position is, it can be a difficult challenge if they’re competing with us at the same time. But we have generally been successful in getting experienced risk staff on board.”

Banks are learning to be more flexible to fill the positions.

Carrea, of Robert Half, said her company worked this summer with a bank that wanted roughly 10 people to work in Charlotte on an audit project. Ultimately, some of the positions were filled with hires in other states, including Iowa, Minnesota, Pennsylvania and Texas.

“We suggested looking at other cities that also had a large financial presence,” she said.

“The talent pool is shallow but the work still needs to get done, so these banks need to look at other resources to find the talent.”