Wall Street’s middle office flexes its muscles
On Wall Street, middle and back office staffers don’t garner near as much respect as front office revenue generators. At least they didn’t used to.
With the recent influx of regulations and the growing need for banks to become more risk-averse, middle and back office employees have earned seats at the big table, with the salaries to match. In compliance, full-time employees and even contractors are taking home north of $200,000 a year, with opportunities on both the buy and sell-side.
The landscape is similar in risk, where banks are investing heavily with hope of keeping their names out of the headlines. The annual budget for Wells Fargo’s risk department has doubled to $500 million over the last two years, for example, with its staff increasing from 1,700 to 2,300 during the same period, according to the Wall Street Journal.
The OCC told the paper that salaries for senior risk officers have increased a massive 40% in the just the last few years as banks are competing harder for talent. And it’s not just money. Risk officers, who were seen more as a nuisance to even their own superiors, are now commanding a bit more respect, at least according to the Journal. Goldman Sachs’ chief risk officer was recently elected to its ever-powerful management committee – a first in the company’s long history.
However, while management may see risk officers as equals – or at least critical to the business – the risk takers and revenue generators may not have come around just yet.
Risk officers are still often viewed as the enemy by colleagues who are desperate to get a transaction approved, said one market expert. Not to mention the regulators, who are always breathing down their throat, he added. But hey, at least the paychecks are bigger than they used to be.
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