We are pleased to announce the publication of our Risk Management Salary Survey & Guide 2016. Please click here to view the PDF version.
Aquis Search is pleased to present its Risk Management Salary Survey for the year 2016. Our aim in producing this paper is to provide guidance on current market trends, compensation levels for the Hong Kong and Singapore markets and what we expect for the forthcoming year.
Our information has been researched and collated with the help of our clients, candidates and knowledge of the marketplace. As with all surveys, the ranges represent the mainstream market view and there will be individual situations where salary levels will fall outside the ranges published here. Please use this survey as a guide. For specific market intelligence, please contact Sam Dakin, Director, Risk Management.
Risk teams have adjusted size according to the business lines they are covering or have shifted in-line with an organisational change of focus, away from investment banking to private banking for instance. Where new regulations like Basel 3, Dodd-Frank and FRTB have impacted risk disciplines, new headcount may have been warranted but overall teams have been tasked to do more with less or rely on improvements in technology to drive efficiencies and productivity. With the de-risking of portfolios, deleveraging, restrictions on prop-trading and banks exiting certain markets, today’s risk has generally become less complex and easier to manage. Furthermore, financial risks may be taking a backseat as firms focus on conduct, regulatory and reputational risks as well as the heightened threat of technology related risks.
Across Asia the domestic and regional banks have been investing in their risk functions and we have seen significant growth from the local banks in Singapore and Chinese banks in Hong Kong. We have also seen the same in KL at the Malaysian Banks, often luring senior candidates from the Singapore market. We observe a similar situation in the Middle East where we see risk functions growing and taking advantage of those experienced candidates whom may be finding it difficult to find suitably senior level positions in the Asia markets.
For the year ahead we expect mostly replacement hiring rather than new headcount. As institutions further ramp-up their three lines of defence risk models this may contribute to new hiring, particularly for first-line roles, however we expect the majority of these roles to be filled internally.
Market risk hiring has remained static over the last few years with most foreign banks benefitting from more advanced and developed teams and not needing additional resources, especially given lower trading volumes. Where there has been growth, it has tended to be from the domestic and regional banks. For these firms, the need to automate processes, update models and methodologies, embed infrastructure to support new business lines or enhance technology and data has resulted in investment, and therefore hiring, for market risk. As these banks have done so, they have looked not to their peers but to the foreign banks for talent to bring a view of what ‘good risk’ should look like to the bank. The offering of stimulating risk development work alongside salary levels comparable with the overall market has attracted individuals from top-tier global firms, the stability and commitment to Asia of the regional banks being an added draw for candidates. Having hired such risk managers, the ability to attract a wider pool of candidates for junior and mid-level positions has increased too.
From a candidate’s perspective role selection criteria tends to focus on the nature of the work, quality of team and manager as well as stability of institution. Whilst desirable, compensation and working for a global name may be less of a priority (assuming salaries are in-line with market rates).
Salaries have remained stable over the last few years with the regional banks catching up to the global banks on salary. Salary increments with a move average at the 15% - 20% mark. Bonuses have remained flat.
Within all the risk segments credit risk remains the most fluid of risk functions in terms of staff turnover with candidates tending to move more frequently compared to their peers in market and operational risk. This creates regular hiring in the market weighted around 75% replacement hiring to 25% new hiring, the bulk of which being to be at junior VP level (eight years) and below. We have seen consistent growth in credit teams covering corporate banking as some firms have expanded their business lines and product offerings in the region, particularly the Japanese banks.
The senior end of the market in credit has not fared well, though. We have seen the ‘juniorisation’ of Head roles from senior end director-level to junior director positions and, in some cases, even to VP level. With more established credit functions and bigger risks being posed to the banks away from credit, senior credit managers, including some very good ones, have seen themselves being made redundant over the last few years and unable to find equivalent opportunities elsewhere. This does not reflect on the candidate, it is simply due to the fact that such roles do not exist in the quantity they once did. Such candidates may have exited the Asia markets altogether or moved away from the main financial hubs to less developed markets across Asia, often finding broader roles rather than pure credit positions. Banks growing their footprint in Asia have often snapped these candidates up, particularly the Middle Eastern and Malaysian banks. We have also seen Chief Risk Officer roles in countries including Myanmar, Thailand and Vietnam filled with such profiles.
In a down market whilst business volumes may decrease the work of a credit function may not. Writing of new credit may lessen but increased monitoring and reviews of counterparties may increase, particularly as it is often in the best of times when the worst credit decisions are made and we see that fallout when markets slow. We also see a higher level of workout and debt restructuring, which credit teams will be involved in.
For credit roles overall, salary levels have remained flat, as have bonuses. Salary increments typically fall between 12% - 20%, the number generally determined by how long the candidate has been at their current employer. Candidates with 18 months or less tenure in their current firm should expect an increment of around 12%-14% on base (lower if moving after 12 months or less). Those whom have longer tenure can expect above 15%. There are some exceptions to this, particularly when a candidate is moving from a firm where base salary may be lower than average market rate but bonus higher (this is typically seen in domestic banks) to a firm paying market rate salary levels. In these cases, the same increments apply, but on a total compensation basis which can mean up to a 25% increment on basic but a lower average annual bonus for the candidate. The same applies in reverse for candidates moving the other way.
Operational risk management is the risk function we have seen most development in over the last five years with teams slowly expanding year on year. Most institutions are at their target size from a second line perspective now.
The major growth over the last three years has been in first line of defence positions, a trend that continues today. It is much more common to have dedicated risk managers sat in business or infrastructure and management functions versus the earlier model of front line staff with some assigned risk duties. First line roles tend to be occupied by candidates with varied backgrounds as requirements typically focus around a general controls and governance mindset coupled with business understanding and, most importantly, ‘client facing’ skills. We have seen first line roles filled with candidates whom have come from the business, other disciplines of risk management as well as audit, finance and operations. With some banks looking to downsize and therefore having excess headcount in front line and infrastructure functions, we expect to see the majority of first line risk roles at these firms filled via internal transfers of such displaced staff.
Operational risk managers need to be able to demonstrate value, create meaningful relationships with the business, have supportive buy-in from senior management and differentiate operational risk from other controls functions – particularly given how the three-lines of defence model has expanded horizontally recently. Like many other governance functions, this is driving a focus on soft-skills when hiring in operational risk. Facets such as good communication, ability to sell to and negotiate with the business, ‘out of box’ thinking and problem solving are regularly requested by hiring managers.
Salary increments have averaged at 20% when candidates change roles but this may drop by a couple of percentage points this year. Salaries have grown healthily in this area over the last few years but are plateauing now. As the market has developed post-financial crisis there is a greater availability of candidates at all levels which gives hiring institutions a wider choice. Candidates with solid CVs and the ‘in demand’ softer skills will be able to command higher salaries and push for a 20% - 25% premium.
Hong Kong (HK$ per month)
|Analysis/Modelling||30,000 - 50,000||50,000 - 90,000||90,000 - 20,000|
|Control/Reporting||25,000 - 40,000||40,000 - 75,000||75,000 - 100,000||110,000+|
|CREDIT RISK ANALYSIS|
|27,000 - 45,000||45,000 - 75,000||75,000 - 100,000||110,000+|
|Private Banking||25,000 - 40,000||40,000 - 70,000||70,000 - 90,000||100,000+|
|Commercial Banking||20,000 - 35,000||35,000 - 60,000||60,000 - 85,000||90,000+|
|Consumer Banking||20,000 - 35,000||35,000 - 58,000||58,000 - 80,000||85,000+|
|25,000 - 45,000||45,000 - 80,000||80,000 - 120,000||120,000+|
|Private Banking||24,000 - 40,000||40,000 - 75,000||75,000 - 110,000||110,000+|
|Consumer Banking||20,000 - 35,000||35,000 - 60,000||60,000 - 85,000||90,000+|
|Infrastructure||24,000 - 40,000||40,000 - 75,000||75,000 - 100,000||100,000+|
Singapore (SG$ per annum)
|Analysis/Modelling||60,000 - 100,000||100,000 - 180,000||180,000 - 240,000|
|Control/Reporting||50,000 - 80,000||80,000 - 150,000||150,000 - 200,000||220,000+|
|CREDIT RISK ANALYSIS|
|54,000 - 90,000||90,000 - 150,000||150,000 - 200,000||220,000+|
|Private Banking||48,000 - 80,000||80,000 - 140,000||140,000 - 180,000||200,000+|
|Commercial Banking||40,000 - 70,000||70,000 - 120,000||120,000 - 165,000||180,000+|
|Consumer Banking||40,000 - 68,000||70,000 - 115,000||115,000 - 155,000||175,000+|
|54,000 - 90,000||90,000 - 160,000||160,000 - 250,000||240,000+|
|Private Banking||48,000 - 80,000||80,000 - 150,000||150,000 - 220,000||220,000+|
|Consumer Banking||40,000 - 70,000||70,000 - 120,000||120,000 - 170,000||175,000+|
|Infrastructure||48,000 - 80,000||80,000 - 150,000||150,000 - 200,000||200,000+|