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The Aquis Search Hong Kong Compliance Salary Survey 2018 details salary information and recruiting trends in the business sectors we cover. Our information has been researched and collated with the help of our clients and candidates and from our working knowledge of the marketplace. Aquis Search consultants have extensive expertise in their practice area and the information reported is based on telephone interviews with hiring managers, HR professionals and in-house recruiters as well as data extracted from our own extensive database and internal research resources.
As with all reports that detail salary information and trends, we represent the mainstream view and we recognise there will be individual situations that fall outside the data published. This survey is therefore a guide to general movement in the sector. Please contact us for further information or for clarification on any of the compensation trends detailed in this report.
Overall, it was another active year for compliance hiring in Hong Kong as demand for compliance professionals continues. Chinese headquartered companies particularly have maintained a high level of recruiting due to their evolving business needs and global expansion. Similarly, the booming financial technology (fintech) industry created a number of regulatory and financial crime focused positions in the market. Buy side institutions such as private equity firms and hedge funds remained an attractive platform for sell side candidates. Hiring in the insurance sector has also rapidly grown due to the establishment of the Insurance Authority (IA), a new regulatory body governing the sector.
Private and investment banking in contrast, showed signs of slowing down reflecting the challenging conditions the sector is facing globally as well as in the region. Consumer banking and corporate banking remain relatively stable compared with the previous year
Chinese Financial Institutions
Chinese players continue to be the most active in this sector due to the expansion of their capital markets businesses in Hong Kong. Compliance professionals with the ability to demonstrate both commercial acumen alongside experience gained from top tier investment banks, as well as an understanding of Chinese work culture are highly sought after.
Chinese brokerage firms will continue to drive demand in the next 12 months in view of the new Managers-in-Charge (MIC) regime across the eight core functions of a licensed corporation, and the determination of many Chinese companies to establish a strong compliance culture enabling them to operate in global markets.
Private Banking and Investment Banking
Increasing competition coupled with tightened regulatory compliance has resulted in various European banks pulling out of the Asian private wealth arena, triggering further consolidation of the industry. This has led to a greater supply of private banking candidates appearing in the market, who are now being hired by either Chinese financial institutions or the larger global private banks.
Hiring activity in top tier investment banks remained subdued in 2017 largely due to the challenging global investment conditions. The majority of the positions advertised were replacement roles rather than increased headcount. Hiring in AML has, in particular, slowed down significantly in most banks in Hong Kong compared with two to three years ago when demand for AML skills was at its peak. We do, however, see a number of regional and smaller institutions that continue to hire in this space as they tend to face greater AML compliance scrutiny.
Private Equity & Hedge Funds
There is a continuous demand for senior candidates within the buy side industries notably coming from the global private equity firms and hedge funds. Candidates with a strong SFC background as well as previous relevant industry experience are highly sought after. The competition for talent within this already small candidate pool in Hong Kong is further intensified by the entry of newly set up Chinese hedge funds and private equity houses. Due to the fierce competition for suitably qualified candidates, salary increments for lateral moves could be between 30% and 50% with bonuses ranging from 5 to 10 months.
Compliance hiring in the insurance sector has been impacted by the establishment of a new regulatory body - the Insurance Authority (IA). The introduction of the IA has brought Hong Kong in line with other jurisdictions that have independent insurance regulators. This will have a significant bearing on hiring as insurance companies and intermediaries are allocating more resources to bolstering departments, ensuring they comprise of individuals with the relevant experience and knowledge to work within the IA’s realm. With this in mind, we expect the insurance sector to be one of the key drivers in compliance hiring in the next 12 months. The growing industry will be an attractive platform for candidates as it provides stability and a healthy long-term growth prospect when compared with traditional investment banks.
Regulatory flexibility in the fintech industry has meant firms have been able to invest extensively in new businesses and been able to develop and offer a wide range of innovative financial products. The Hong Kong regulators are taking fintech seriously as the Hong Kong Monetary Authority outlined a plan to launch an enhanced fintech supervisory sandbox in early October 2017. Together with the Securities and Futures Commission’s and the Insurance Authority’s new sandboxes, these are all examples of a “safe place” for fintech entities to test products in an otherwise restricted environment without the usual regulatory consequence of pilot activities.
With the introduction of tighter regulations in the wider financial services sector, there has been a growing demand for candidates with expertise in both regulatory compliance and financial crime compliance. The majority of the candidate pools for such roles are from large global banks where candidates have good knowledge of complex financial products. Candidates normally receive an uplift of 15- 20% on their base salary and it is not uncommon that senior candidates are also given equity as an incentive to attract them to join the business.
As the fintech industry continues boom, we anticipate these newly bolstered departments to be one of the key drivers in maintaining growth in the compliance sector in the next 12 months.
The compliance recruitment market will be relatively buoyant in 2018, with Chinese brokerage firms being particularly active as they continue to work to the Managers-in-Charge (MIC) regime. The insurance sector as well as the fintech industry will continue to hire compliance professionals in both regulatory compliance and FCC compliance in view of overall industry expansion and tighter regulatory requirements. Consolidation and global uncertainties will continue to impact both the wealth management and investment banking industries.