GUEST COMMENT: Banks are hiring in risk, but recruitment's not enough

Never has the cost of lax risk control been more stark. From $7.1bn of losses at SocGen to huge writedowns at the likes of UBS and Merrill Lynch, banks have learnt the hard way what it means not to keep a firm grip on their employees and businesses.

As a result, we are seeing strong growth in compliance roles with a 'monitoring' element to them, for example trade survelliance and monitoring and risk assessment and monitoring.

But is it simply enough to plug in people with the requisite systems skills, product knowledge, regulatory rule book knowledge? Are there still endemic problems of corporate structure, governance, bureaucracy, silo's, culture etc? And as such, are these appointments really there to do little more than pay lip service to the notion of tighter risk controls.

Image has been replaced by reality. UBS had a strong image for risk control, but that image has proven little more than a mirage.

At the same time, a large number of dissatisfied compliance and risk management professionals are emerging. Making change happen is a tough thing in large organisations, and as a consequence a lot of the talent is moving to smaller organisations where they feel they can genuinely make a difference.

Many institutions are behind the curve. Most of these control functions should not be viewed as a one time project, but as a changing and ever-evolving discipline that develops with the dynamics of a changing risk landscape.

Unquestionably risks faced by institutions are more and more complicated - be it financial markets risk, credit risk, people risk, reputational risk, etc. etc. Too many institutions still have a fragmented approach to risk management, with too many silo's and with too little responsibility. The convergence of a number of control functions into more holistic / helicopter view of risk evaluation still has to happen.

In the meantime, we still have a 'tick & bash' control environment. So much for principles based regulation designed to "stimulate innovation and flexibility".

Gavin Bonnet is executive director, head of EMEA business management & controls at Correlate Search, formerly known as Akamai Financial Markets.