Financial crime is driving a skills war in banks

Pubished 10th September 2019

The labour market is in a monumental state of uncertainty, which is causing an unparalleled level of anxiety amongst the European workforce. Amidst underemployment, income stagnation and the effect of migration on jobs, one issue remains at the epicentre of uncertainty… technology. From the birth of the internet over 30 years ago, society has been mesmerised by the opportunity presented, to undertake a copious amount of tasks one could only dream of. As decades pass, the story remains unchanged as technology has been disrupting the labour force, with estimations stating that automation will destroy over 800 million jobs by 2030. As businesses increase their reliance on technology, this figure is set to soar even higher. However in one emerging crevice of the financial industry the polar opposite is unfolding, as banks across Europe tussle with corrupt individuals, to prevent dirty money from circulating into the economy.

Did you miss? IFRS 17: Will the IASB’s decision change preparations?

Revelations of scandals in which $224billion of laundered Russian money was handled by European banks, has backed lenders into a corner and forced them to utilise the power of AI, to pinpoint the origins of dirty money and aggressively capture these criminals. However, by employing AI and machine learning, the heaps of data generated has exploded exponentially. As a result, banks have no alternative but to hire armies of workers, to comprehensively filter through the data and separate lawful from criminal.

Combating financial crime has climbed to become a top priority for banks, with regulations tightening, hordes of lenders have been burdened with cumbersome, reputation damaging fines. Dansake Bank alone stated over $234 billion in incredulous transactions weaved its way through its Estonian Branch… nearly the equivalent of the Danish economy. As a direct result, the firm has propelled in a hefty 600 specialists to boost its compliance functions. Dutch bank ING were even fined a crippling $900 million to settle inexcusable money laundering failures. Keen not to let these felons find future passage, the firm has forged 500 full-time positions to audit dubious transactions.

10% or more of the workforce at large banks specialise within the field of compliance, up an enormous 50% from the mid-2000s. While banks are appointing legions of specialists by bolstering the number of compliance and financial crime personnel within their workforce, some banks now proclaim at having reached “peak compliance”, a staffing and investment level higher than before the banking crisis even triggered.

However, banks have an excruciating headache in sourcing the cream of the crop on the market, to collide head on and alleviate these challenges. Boston Consulting Group partner Norbet Gittfried comments “There’s an ongoing labour crunch, the day-to-day need is still going up.”

The ultimate goal is to solve immediate problems whilst keeping a reasonable grip on costs and building future capabilities – by no means an easy task!

If you are facing similar problems please get in touch to learn more about InterQuest Group’s flexible human capital, consulting, search and staffing solutions which have already supported a number of Tier 1 clients to address similar problems.