Compliance: the flipside

Last week we reported that the market for compliance jobs was robust. For the moment it seems we were right. Longer term, we may have been wrong.

The Financial Services Authority's intention to move away from a "rules-based" system in favour of a "principles-based" one, will initially work wonders for the career prospects of mid-ranking compliance staff, says John Tattershall, chairman of PricewaterhouseCooper's financial services regulatory practice

"This will create uncertainty," he predicts. "And where you have uncertainty, you will need knowledgeable compliance officers to bring certainty and interpret the principles."

Couple this with the Markets in Financial Instruments Directive (MiFID), which is creating a roaring trade in compliance staff prior to its implementation next year, and recruiters tell us the prospects for compliance jobs in 2007 and 2008 look promising.

Storm clouds on the horizon

After that, however, things could start to look at a bit shaky.

Longer term, the slimming down of the FSA's rulebook will reduce demand for "box-tickers," predicts Tattershall. "This will cut out people doing relatively pointless administrative and checking tasks," he says.

Meanwhile, banks are expected to move an increasing number of low level compliance roles to locations such as India. Recruiters say this trend has already begun - Goldman Sachs, for example, is said to have cut compliance registration roles in London as jobs are moved east.

Algorithmic trading is also seen as a threat to the current compliance oasis. "In 10 years time there might not be many compliance roles left," says one London compliance recruiter. "You will still have compliance managers. But as algorithmic trading increases you certainly won't need compliance staff sitting next to traders any more."