The role of internal audit in financial services has changed dramatically over the past decade in response to events, regulatory change and market indications. This change has mainly been in how internal audit functions are viewed and the enhancement they provide to profitability and stakeholder management.
This has led banks and financial institutions to develop and recruit for highly functional and robust internal audit teams, to minimise the increasing level of scrutiny banks and financial institutions face.
This scrutiny can take a number of forms. It could be driven by investors or shareholders questioning a bank's inability to maximise profitability and yield above target returns. It could be governmental scrutiny, such as recent regulatory reform to establish controls on liquidity or capital adequacy requirements.
Banks and financial institutions are aware their emphasis must shift, and not only to adequately allocating resources to departments dedicated to creating clear internal policies and controls to assure regulatory compliance. It must also include internal audit departments that monitor, assess and measure whether those policies and controls are being followed. This shift in focus has created a very healthy demand for internal audit professionals.
Employers are, of course, keen to attract and retain the best talent. Candidates with proven skill sets, knowledge of Asian regulatory frameworks and requirements, and with strong academic backgrounds and professional qualifications are highly sought after in the market. Generally, candidates at manager level and above with commercial experience are the most attractive. Jobseekers from professional-service firms below the manager level, however, are also being placed.
Language skills are a significant advantage for internal audit candidates as they allow for seamless cross-border office communications of policy and control developments. Employers also look for candidates who respond to their key critical business risks. Internal audit candidates experienced in developing policies and controls in response to changes in regulations, customer needs and behaviour, and the innovation of new products and services are in demand.
Employers are also facing challenges in ensuring the best talent is retained. Internal audit professionals often look to branch out into functions within financial services, or even move into a finance role within non-financial services firms. It is common for them to rebrand themselves as a compliance or operational risk expert, given their level of knowledge and training on internal risk and compliance issues.
Challenges are also cropping up internally. The bulge bracket investment banks still facing cost controls and pressures are finding it difficult to allocate an increase in headcount to internal audit teams that are underresourced and increasingly overworked. The challenge always lies in persuading the best talent from seeking the better work-life balance possibly on offer at asset management and insurance firms.
Remuneration is determined by past experience and skill set. The market dictates that internal audit candidates looking to place themselves in a commercial role from a professional-service firm will find that although total compensation will be at a premium to the current market rate offered by professional services firms, the remuneration offered may not be as attractive as that for a candidate who has proven commercial experience.
The expectation remains that as stakeholder scrutiny of banks and financial institutions holds steady, so too will the demand for internal audit candidates to combat this issue.
Internal and external factors will continue to affect the recruitment and resourcing of internal auditors. It is foreseeable, though, that for at least the next couple of years, these issues will continue to be overshadowed by the appetite for robust and diligent internal audit candidates to effectively and efficiently manage stakeholders.
Fiona Taylor joined PageGroup in 2011 and is manager of Micheal Page's financial services business in Hong Kong. Her role covers recruiting for finance, operations and governance positions across banking, asset management and insurance companies.
