Compliance Department No Longer The Quickest Path To Riches And Glory

Sorry CPAs, your time in the sun is coming to an end.
By Partybus Buenos AIres [CC BY-SA 4.0], via Wikimedia Commons

By Partybus Buenos AIres (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Remember when it seemed like every new kingpin on Wall Street had business cards bearing the title CPA? When every other time someone bought a round at the Dead Rabbit you'd turn around to hear “I'm in risk management, baby”? When interns would pout and grumble when they ended up in the investment banking division instead of compliance?

Times have changed. The reign of the compliance officer is now officially at an end:

Global banks are paring back staff tasked with detecting wrongdoing for the first time since the financial crisis, ending a hiring boom that accompanied $321 billion in fines, as technology replaces employees and penalties wane.

Wall Street's massive post-crisis buildup in t-crossers and i-dotters coincided with increasingly complex regulations and a desire amongst the feds to add extra digits to settlements. But both of those trends have since crested, and cost-conscious banks are wondering if it makes sense anymore to hire risk officers hand over fist.

It's not just dimming career prospects threatening the vaunted position of compliance staff. Regulators have long since moved on from pursuing only workaday cases of insider trading and the like to go after compliance officers who have failed to comply. And then there's robots:

“Before all you could do is throw people at the problem,” said Erkin Adylov, CEO of technology company, Behavox. “Now banks are using the gains and efficiencies from technology to focus on how you solve the problem. With the same workforce you can do way more.”

Is nothing sacred anymore?

Banks Trimming Compliance Staff as $321 Billion in Fines Abate [Bloomberg]