The Star Early Edition

Banks are scaling back on staff

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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 (R4.05 trillion) in fines, as technology replaces employees and penalties wane.

Royal Bank of Scotland Group is preparing to eliminate as many as 2 000 jobs, checking new customers for suspicious traits as it digitises the process. Other lenders are also replacing compliance staff with computers as they face pressure to cut costs, including UBS Group, according to a person familiar with the matter, who asked not to be identified because the matter is private.

“The overall number of people in compliance is absolutely reducing,” said Anne Murphy, head of UK financial services at executive-search firm Odgers Berndtson. “Banks are better able to deal with regulatory requiremen­ts. They’ll always need people to provide judgment, but a lot of monitoring and surveillan­ce activity can be automated.”

Banks globally have paid $321 billion in fines since 2008 for regulatory failings from money laundering to market manipulati­on and terrorist financing, according to data from Boston Consulting Group. The related hiring spree for compliance staff comes to a close as banks move past the worst of their misconduct charges and dwindling revenue necessitat­es the use of technology to control costs at department­s once protected from cuts.

“Panic mode is over now,” said Harry Chetwynd-Talbot, a consultant at headhunter Hedley May, who specialise­s in compliance hiring. “It’s the only part that’s been immune to cost pressure since the crisis.

“Now organisati­ons are looking at massively inflated risk, compliance, legal functions and thinking ‘we haven’t solved the issue yet, but the answer isn’t to just chuck more people at it’.”

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