The decade following the 2008 financial crisis was an extremely prosperous one for legal and compliance. While the majority of those working in finance have seen their actions curtailed due to cutbacks and stiff capital requirements, the headcount in legal and compliance teams has grown. The sheer volume of regulations, covering everything from capital and corporate governance to disclosure and diversity has led to a surge in the numbers being hired by financial institutions. “You have to build an industrial-scale operation just to digest all the regulatory changes,” says Colin Bell, HSBC’s chief compliance officer.
HSBC, which was fined US$1.9bn (€1.7bn) in 2012 for banking drug money for international cartels, has around 5,000 employees in anti-money-laundering (AML) compliance. Standard Chartered, which has coughed up US$1.8bn (€1.6bn) for breaches of sanctions, has 3,500. Both banks spend US$500m (€451m) a year on AML alone - for Standard Chartered, the equivalent of a fifth of its pre-tax profit for 2018. At the end of 2018, some 30,000 (or 15%) of the 204,000 employees of Citigroup, worked in compliance, risk and other control functions – that’s enough to fill over 40% of Berlins Olympic Stadium. Compared to 2008, where just over four percent of employees worked in legal and compliance. Germany’s biggest financial institution, Deutsche Bank has also been the victim of fines - in September 2016, the bank received a fine totalling US$7.2bn (€6.5bn) for its part in mis-selling mortgage securities.
The sector is served by Deutsches Institut für Compliance (German Institute for Compliance). The organisation located in Berlin, led by Managing Director Kai Fain pursues the goal of setting standards for compliance and offers qualifications aimed at further developing the profile of the compliance officer.
Expert professionals working in the legal and compliance sector will be in high demand for some time to come. In a complex regulatory landscape, professionals who ensure their employer plays by the rules of an ever-changing game are in high demand. A global study of risk and compliance officers at 800 financial firms in 2018 found that 43% expected their team to grow in the next 12 months.
Our Berlin based consultants are specialists in their markets, recruiting top talent for organisations in the legal & compliance sector throughout Germany and the rest of Europe.