07 Aug 2019
For decades, increasing reliance on technology and automation has meant one thing for workers: fewer jobs. In a fast-growing corner of the finance industry, it’s doing the opposite as banks across Europe struggle to fill positions in units employing tech to combat money laundering.
Reeling from a litany of scandals and more than $20 billion in fines since 2012, lenders are using artificial intelligence and machine learning to ferret out miscreants seeking to obscure the origin of ill-gotten cash. But that technology coughs up so much data that banks must hire legions of workers to sort through it all and separate the scoundrels from the scrupulous.
Compliance and financial crime personnel today account for about 3% of the average bank’s head count in the U.S. and Europe, more than double the level in 2013, according to Boston Consulting Group. With most lenders now thoroughly evaluating business clients annually instead of every three to five years, as they did a few years ago, big banks typically spend more than $300 million annually staffing their anti-money-laundering operations, BCG says. Investment bank Mediobanca SpA estimates European financial houses will have to hire 10,000 people in the next two years, but there aren’t nearly enough qualified candidates. “There’s an ongoing labor crunch,” says BCG partner Norbert Gittfried. “The day-to-day need is still going up.”
With low interest rates and a weak regional economy squeezing profits, bulking up is tough, but banks have little choice. In January new European Union anti-money-laundering regulations will come into effect, tightening rules and expanding the range of activities that must be examined. Danske Bank AS, which says as much as $220 billion in suspicious transactions moved through its Estonian branch, needs 600 people to staff its crime and compliance units. ING Groep NV, which in 2018 paid a €775 million ($860 million) penalty to settle money laundering cases, in the second quarter of this year created 500 full-time positions to monitor suspicious transactions—a 20% rise. France’s biggest lender, BNP Paribas SA, has increased its compliance and anti-financial-crime head count by 40%, to 4,200, over the past three years.
Several lenders have farmed out lower-level jobs in the field to Eastern Europe. Others are holding “date nights,” where compliance executives meet with potential hires, seeking to spiff up the image of what’s long been viewed as a fusty backwater of the finance industry.
By Ruben Munsterman and Edward Robinson, Bloomberg, 5 August 2019
Read more at Bloomberg
You can claim CPD minutes for reading this article, by signing up to our CPD WalletFREE CPD Wallet