Hiring compliance talent: Networking, flexibility and knowing your bank’s true needs are keys to success

A well-structured and supported mentoring program can help bring along those individuals who are eager to learn more about compliance and have the baseline skills to succeed.

By Julie Knudson

In a 2022 survey conducted by PwC, executives in the financial services sector ranked talent acquisition and retention as bigger business risks than respondents in any other industry.

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Among the roles banks must fill, compliance can be a notable struggle. “There’s such a limited availability of that highly skilled individual within this particular area,” says Laura E. Newstead, EVP, chief human resources officer at Cape Cod 5, a community bank in Hyannis, Massachusetts. Newstead is also a member of ABA’s Professional Development Council. “I think it’s always been challenging.”

Given the compulsory nature of the compliance function, time and organizational pressures add stress to the search. A small labor pool and heavy competition for top candidates further complicate things. Developing the right approach to recruiting is key to overcoming these challenges and attracting prospects who not only have the right capabilities but also mesh well with the existing team.

The recruiting journey

A bank’s success in recruiting compliance talent may depend on where the institution is in its growth journey. Larger banks, for example, often see increased demand for key roles in response to the regulatory components that come with growth. Now that Olney, Maryland-based Sandy Spring Bank has crossed the $10 billion threshold, necessity is driving recruiting improvement. “I think we’re getting better at it, because we’re required to but also because the volume itself requires that you do that,” says Gary Fernandes, EVP, chief human resources officer and ABA Professional Development Council member.

Previously the bank had more flexibility to look within its workforce for candidates, he adds. “We are actually looking for skill sets that we may not have internally because they’ve never been at a larger bank, or we’re looking for expertise that we have not experienced as of yet.”

Banks searching for compliance talent are likely to encounter fierce competition. However, changes in the business environment in recent years—many driven by the pandemic response—are contributing to a better playing field for banks.

“Certainly, the existing market with remote work and breaking down those boundaries has provided more opportunities to find skill sets outside of what had been typical regional barriers,” Fernandes says. Technology, gaming and other sectors are frequent competitors for compliance job seekers, but Fernandes says banking can offer candidates real advantages. “Banks were center-stage in terms of helping out the economy and helping people keep their jobs, their homes and their businesses,” he says of the financial sector’s contributions during COVID-19. “We also talk about the quality of the work and the meaningfulness there is in being in banking.” Where tech companies use their reputations as dynamic and innovative places to work to lure candidates, banks can tout a long history of stability—something that may resonate among workers recently laid off from a sexy tech job.

Competing and winning

Technology’s inexorable spread throughout banking can become an advantage when competing against pure-play tech sector employers. Newstead says Cape Cod 5 positions itself as being a technology company first, that offers banking and financial services. “We found that messaging has been very successful in terms of that whole ‘banking is not sexy’ thing.” Her team has also focused on building banking as a career, with robust programs aimed at finding recent high school graduates as well as college students interested in pursuing careers in banking. “We have 52 interns at the bank this summer,” Newstead says. “That program has given us an opportunity to introduce our interns to risk and compliance in every area of the bank. And every banking center has at least one college intern.” Their diligent networking and intern strategies have paid off. The bank’s most recent hire into the risk and compliance area was an intern just over a year ago.

Developing a strong employee value proposition is something Giannine Cohoon, SVP of business development at global talent solutions firm Robert Half, encourages employers to do as part of their recruiting strategy. The right messaging helps candidates as well as current employees “see their impact on the organization,” she says. “Feeling a sense of purpose is an attractive catalyst in employee loyalty and fulfillment.” This can also be used within a wider picture that helps workers envision a long-term career path with the bank.

Offering career development support to compliance candidates is a good way to demonstrate the organization’s commitment to the relationship. It can also open doors to other areas where strong performers may be interested in contributing. “Banks can incentivize employees with training, education and advanced certifications, and allow each to create a career journey that is customizable,” Cohoon says. She adds that elements such as culture and employees’ perceptions about their contributions are sometimes more important than money in helping to build loyalty.

Networking is another valuable tool in finding and recruiting senior compliance professionals. Associations at the state and national levels are gold mines of skilled, seasoned and enthusiastic professionals. “Almost all of our high-level staff, not only in regulatory compliance but across the bank, are heavily involved in ABA,” Newstead says. “We do a lot of networking for our higher-level positions through who we know.” With diligent and consistent nurturing, a robust professional network will include individuals actively seeking new opportunities as well as passive candidates who might be wooed by just the right role.

The compliance talent pool is small, and an even smaller segment of those candidates are highly skilled, seasoned and ready for a senior-level role. Others have gaps in their expertise, less exposure to the nuances of the compliance discipline and less training behind them. That’s okay. “Banks should have an intentional approach to attract, hire and retain both highly experienced and new-to-the-industry professionals,” says Cohoon. A well-structured and supported mentoring program can help bring along those individuals who are eager to learn more about compliance and have the baseline skills to succeed.

Cohoon believes an intentional approach to recruiting is important, both for finding highly experienced candidates as well as those newer to the industry. She says that does not just mean counting years of experience but also conducting searches “with an openness to different educational backgrounds, areas of concentrated study and previous employment attributes.” The compliance leaders of the future “will arise from a variety of ranks and I have witnessed the strongest success come from having a well-balanced team that can lean on and learn from one another,” Cohoon says.

Leveraging change and connections

The increasing overlap between the compliance profession and other areas—and the resulting opportunities it may create for employees—is something banks can also leverage in attracting and retaining quality candidates. Traditional regulatory compliance can be just the beginning, depending on each individual’s interests and where they want to go. “You also have anti-money laundering areas, which is part of compliance but has become its own discipline,” says Ryan Rasske, SVP, Risk and Customer Markets at ABA. .. He sees the pathway into risk management becoming a more common option for compliance professionals, as is an increasingly sophisticated data element and the associated technologies. Ryan believes that being proactive about nurturing the career path that fits an employee’s expertise and desires can help banks identify enthusiastic compliance candidates and continue building their skills once they come on board.

When searching for compliance talent, forward-looking banks should consider expanding on the skills and experience they’ve historically sought in an ideal candidate. Rather than a narrow focus on a background in regulations and legislation, Rasske says that adopting a broader picture can help them connect with the right people. “Depending on where the bank is in its maturity cycle, it might want to make some bets on individuals in key areas. A bank may want to invest in candidates who bring a data analysis or business intelligence mindset into compliance.” This could mean teaching a new hire about the subtleties around compliance, but Rasske says something like a strong data perspective enables the right candidate to manage, analyze and develop actions around data that someone without that background may struggle to understand.

Finally, banks can boost the success of their recruiting efforts by aligning internal teams on what is actually needed in a compliance candidate, both right now and down the road. “We have to get away from thinking that if I go to the external talent pool, I’m going to get everything I want on day one,” Fernandes says. With the limited number of compliance professionals looking for (or open to) new opportunities at any given time, there’s a good chance that the perfect candidate does not exist.

“Understand what the big priorities are that you need and focus on those first,” Fernandes says. He cautions banks to avoid the trap of feeling like they need to have every base covered. Instead, a more fruitful approach may be to plan for closing any gaps, whether through training, exposure or simply experience gained over time. A mid-level hire who is ambitious and smart can become a high-level employee with the right support.

Rasske says that bank compliance professionals often begin their careers doing something quite different in another sector entirely. Once they find their way into banking, “they learn about the compliance profession and it strikes an interest in them,” he says. Others are pulled into compliance from another business line or area in the bank, and training helps to build their expertise within the discipline. “Banks should identify what has been successful in the past—what business lines, functional areas or operational areas have produced strong compliance professionals for them in the past—and concentrate on those areas going forward,” Rasske suggests.

Recognizing that this type of career trajectory is perhaps the most common one can also help banks better identify candidates whose potential to excel in the compliance discipline is greater than their resume alone may suggest.

This is the second of an on-going series on attracting risk and compliance professionals. See part one: Future risk and compliance professionals may be just down the hall.

Julie Knudson is a frequent contributor to ABA Banking Journal.