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Compliance Jobs Shift to Fintech as Banks Reduce Hiring

The UK job market for risk and compliance professionals is undergoing a fundamental shift, with opportunities migrating from traditional banking to fintech companies. As banks scale back hiring in response to market pressures, fintechs are stepping in to fill the gap, driving growth in the sector and reshaping the employment landscape for these critical roles.

According to the latest labor market report by Morgan McKinley and Vacancysoft, risk and compliance vacancies in traditional banks are projected to decline by 17% in 2024. In contrast, fintech firms are poised to increase these roles by 28%, adding approximately 1,000 new positions. This shift reflects the fintech sector’s growing need to strengthen its regulatory and compliance frameworks as it comes under increased scrutiny.

Within fintech, compliance positions are set to rise by 56%, comprising 28% of all compliance-related vacancies. Risk management roles are expected to grow by an extraordinary 115% year-on-year, while Know Your Customer (KYC) roles will see a 98.4% increase, reflecting the sector’s focus on due diligence and fraud prevention.

Meanwhile, banks are trimming their compliance teams, with compliance positions expected to fall by 29% and credit risk roles by 16%. This trend is linked to the banking sector’s focus on operational stabilization and cost-cutting.

Why Fintechs Are Driving Compliance Hiring

Fintech companies operate in a highly dynamic environment, with innovation at their core. As they scale, regulatory expectations demand that they build robust compliance and risk management frameworks to ensure long-term sustainability.

Unlike traditional banks, fintechs often deal with cutting-edge technologies such as digital payments, cryptocurrency, and peer-to-peer lending—all areas that attract regulatory scrutiny. This has created an urgent need for specialized compliance professionals who can navigate complex regulations while enabling business growth.

The rise in fintech compliance hiring also reflects a broader trend of consumer trust shifting toward financial technology. With London emerging as a global fintech hub, the sector is expected to continue expanding its talent pool, attracting professionals who might previously have sought roles in banking.

London Leads the Way

Greater London is forecasted to see a 72% year-on-year increase in risk and compliance vacancies, marking a dramatic recovery after a 50% decline in 2023. The capital’s resurgence is driven by fintech advancements and increasing investment in the sector. London’s share of vacancies is projected to rise from 55% in 2023 to 72% in 2024, reaffirming its position as a global financial and regulatory center.

Challenges for Banks in Attracting Compliance Talent

Traditional banks are finding it increasingly challenging to compete with fintechs for top compliance talent. While banks offer stability, fintechs appeal to professionals seeking dynamic, fast-paced environments with opportunities to work on innovative solutions.

Moreover, banks’ focus on operational cost-cutting has led to reduced investment in compliance teams, further diminishing their attractiveness to job seekers. This is compounded by reputational challenges stemming from past regulatory lapses, which have eroded trust in the sector.

The Future of Risk and Compliance Hiring

The migration of risk and compliance roles from banks to fintech signals a broader transformation in the financial services industry. As fintechs continue to innovate and expand, they will play a critical role in shaping the future of compliance and risk management.

For professionals in these fields, the shift presents an opportunity to be at the forefront of regulatory innovation. With fintechs driving growth, compliance and risk experts will find abundant opportunities to influence how the industry evolves, ensuring that innovation and regulation go hand in hand.

Conclusion

The UK’s risk and compliance job market is at a turning point. Fintech companies are emerging as the new hub for these roles, offering dynamic opportunities as traditional banks scale back. With London leading the charge, the sector is set to attract top talent, redefining the landscape of financial regulation and compliance.

Source: Finextra