Royal Bank of Scotland Group is preparing to eliminate as many as 2 000 jobs, checking new customers for suspicious traits as it digitises the process. Other lenders are also replacing compliance staff with computers as they face pressure to cut costs, including UBS Group, according to a person familiar with the matter, who asked not to be identified because the matter is private.
“The overall number of people in compliance is absolutely reducing,” said Anne Murphy, head of UK financial services at executive-search firm Odgers Berndtson. “Banks are better able to deal with regulatory requirements. They’ll always need people to provide judgment, but a lot of monitoring and surveillance activity can be automated.”
Banks globally have paid $321 billion in fines since 2008 for regulatory failings from money laundering to market manipulation and terrorist financing, according to data from Boston Consulting Group. The related hiring spree for compliance staff comes to a close as banks move past the worst of their misconduct charges and dwindling revenue necessitates the use of technology to control costs at departments once protected from cuts.
“Panic mode is over now,” said Harry Chetwynd-Talbot, a consultant at headhunter Hedley May, who specialises in compliance hiring. “It’s the only part that’s been immune to cost pressure since the crisis.
"Now organisations are looking at massively inflated risk, compliance, legal functions and thinking ‘we haven’t solved the issue yet, but the answer isn’t to just chuck more people at it'."