Recruiting risk people in the UK, outlook 2018: Let loose on the four C’s?

Posted on Thursday, December 7, 2017 by Elly HannaNo comments


2018 will be a tale of 4 C’s for risk practitioners: Conduct, Culture, Capital and Cyber. 

Never mind MiFID II – ok, just as we’ve all got a grip on it – it’s time to strap in for the next few waves of the rollercoaster ride that is the new regulation of all things risky.  2018 looks set to be another strong year for professionals in this space; whether your hiring or looking to make a move, here’s our round-up of the hottest prospects. 

Conduct regime – waves 2 and 3

With UK bankers already in the frame, 2018 will see the UK Conduct regulator (FCA) extending its powers under the Senior Managers regime (‘SM&CR’) to include insurers, consumer credit and mortgage providers.  Expect to see the conduct enforcer’s focus continuing to shift away from fines against brands, towards prosecutions against senior individuals – as we’ve already seen over the past year.

Whilst some firms are congratulating themselves on getting ‘Conduct-ready’, few have yet caught on to the full significance of regulators’ recently announced plans to audit Culture and measure the capital value impacts of Reputational Risk.  Although these extra reporting requirements don’t phase in until later in 2018-19, several firms have told us they’ve already experienced a new “culture audit tone” when the regulator comes to call.  For some, Reputational Risk is an ever-present factor already, of course.

Although there is some welcome relief as a couple of major regulatory deadlines have been eased (SMCR and FRTB – see below), heaven knows there’s plenty of work for risk people still to do.     

Next-gen capital rules

Supervisors have declared war on ‘capital arbitrage’ with Basel’s mandate for banks to fundamentally review trading books (FRTB).  Like all new rules, this initiative is well meant: By getting all banks to rationalise how they quantify capital, it aims to stop abuses such as the ‘discretionary’ reporting of individual trading positions.

But as our bank clients tell us, FRTB of course demands a huge increase in big-data-crunching whilst they rework ways to estimate and report risk.  Some banks are looking to develop the required skills by contract recruiting of quant modellers; others are upskilling by building permanent new teams.  Either way, we will see continued strong interest in candidates with deep knowledge of risk analysis, both in conventional market risk and new alternative forms such as correlating reputational risk to capital resilience. 

Which we’ll look at more broadly in the next instalment…

Previous PostNext Post

No comments on "Recruiting risk people in the UK, outlook 2018: Let loose on the four C’s?"