Compliance budgets increased by 69% since 2008 – mostly on permanent hires
Hong Kong, 14 November 2012: Recent corporate scandals involving large financial institutions have sparked renewed concerns among Hong Kong financial leaders about their organisation’s ability to sufficiently manage risk.
According to a survey by finance and accounting specialist recruitment firm Robert Half, more than 1 in 4 (27%) financial leaders in Hong Kong have identified reducing risk as the top priority of their company’s finance function, second only to implementing business strategy (39%).. The survey was conducted among 603 financial leaders within the banking and financial services sector with 150 respondents based in Hong Kong.
Globally, 29% of financial leaders cited identifying and implementing business strategy as the top priority while risk management comes in a close second at 28%. Hong Kong is on par with the global trend and the percentage of respondents who identified risk management as a top priority is nearly identical to the global results. However, Hong Kong falls behind the global averages when it comes to providing sound corporate governance and financial reporting.
Which area is of greatest importance to your function?
|All Countries||Hong Kong|
|Identifying / implementing business strategy||29%||39%|
|Providing sound corporate governance||15%||5%|
|Identifying, analysing and monitoring KPIs||13%||21%|
|Providing sound financial reporting||11%||5%|
|Providing sound accounting||4%||3%|
Pallavi Anand, Director, Robert Half Hong Kong said, “Risks are often neglected when there is business growth, which can lead to disastrous consequences as seen in recently-reported corporate scandals. These incidents serve as a timely reminder of the importance of having a robust risk management strategy and team in place. Failure to comply with regulations will not only result in costly legal penalties, but also long-lasting damage to a company’s reputation and trust that has likely taken many years to build.”
The focus on risk is also driving changes in the employment market with risk and compliance specialists finding themselves in high demand. After general finance functions (55%), the survey found that Hong Kong financial leaders are looking to hire risk (45%) and compliance (34%) specialists.
More than two-thirds (69%) of the respondents also cited that their risk management and compliance budgets have increased when compared to pre-2008 levels. Nearly half of the budget increase was attributed to hiring permanent headcount in the compliance function (40%), followed by temporary or interim staff (37%) and technology (18%).
“In the current environment where financial services firms are under close scrutiny by regulators and other major stakeholders, risk management is becoming an even more integral part of an organisation’s overall strategy and we see clear evidence that significant resources are being allocated to this critical area. Given the direction the financial sector is headed in, we expect this trend to continue into 2013,” concludes Ms. Anand.