Regulation and compliance: graduate area of work
Regulation and compliance are all about ensuring that finance organisations act as they should. Graduates wishing to start careers in these areas can either work for the UK regulators – the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) – or for those who comply with the regulations, such as banks. However, once you have some experience, it is usually easy to transfer between working in a compliance role with, say, a bank and working for the FCA or PRA.
A bit of history
In April 2013, the UK’s financial regulator, the Financial Services Authority (FSA), was overhauled when the Financial Services Act came into force. The FSA was subsequently dismantled and replaced with the FCA and PRA in what is sometimes known as 'twin peaks' regulation. The FCA has been given extra powers; it can ban products and publish details of any misleading financial adverts.
The European Union
As the UK is a member of the European Union (EU), if you work in this area your understanding of regulatory matters should stretch beyond Britain. EU legislation has a serious impact on the country’s financial services industries, with a significant amount of policy making regarding regulation being made at EU level.
About graduate jobs in regulation
Graduates thinking about a career as a regulator can work for either the PRA or FCA.
Owned by the Bank of England, the PRA deals primarily with risk and seeks to ensure that organisations don’t take on too much. The PRA describes its role as promoting 'the safety and soundness of firms (such as banks, building societies, credit unions, insurers and major investment firms), and (specifically for insurers) contributing to the securing of an appropriate degree of protection for policyholders'. At a very basic level, the PRA seeks to regulate against conditions that could cause another credit crunch.
The FCA, on the other hand, regulates firms and financial advisers to make sure consumers get a fair deal. According to its website, its aim 'is to protect consumers, ensure our industry remains stable, and promote healthy competition between financial services providers'.
What will I end up doing on the FCA or PRA graduate scheme?
Whichever regulator you choose to work for, there are several pathways you can follow, ranging from specialisation in law, consumer markets, internal auditing and prudential supervision, among others. This can vary depending on what you choose to specialise in. For example, a graduate associate in the enforcement and financial crime sector of the FCA helps interview suspects and witnesses, analyses evidence and drafts reports. Analysts at the Bank of England, however, will design tools that’ll be used to check risk, manage the implementation of policy changes and attend meetings to gather information for the bank.
Graduates start off as associates or analysts and usually go on to become senior associates, whose responsibilities typically include analysing projects, addressing policy and risk issues, and ensuring consistent implementation of resolutions across the relevant divisions.
What skills and qualifications do I need to work in regulation?
You can have a degree from any subject, but you’ll need a 2.1 or higher and at least 300 UCAS points.
The skills you’ll need will depend on which aspect of regulation you choose to specialise in. However, commonly required skills and attributes are:
- quick thinking
- analytical skills
- an inquiring mind
- communication skills
- conviction in your judgements and the confidence to challenge assertions
About graduate jobs in compliance
Compliance roles involve taking care of an organisation’s financial conduct (ensuring it complies with regulations and principles) and of its reporting (providing financial information to the regulator). Financial organisations will have at least one member of staff dedicated to compliance functions, depending on its size.
How do I get into a compliance role?
Graduates can find compliance work with all types of finance organisations as well as some law firms. This means that opportunities aren’t limited to just working in London, although in some schemes candidates are expected to be flexible travelling across the UK.
There are some dedicated graduate schemes in compliance available, particularly with investment banks. Some risk management roles may also contain elements of compliance work. However, you’ll find that the most common graduate job role in compliance is that of trainee auditor, which involves either working in-house examining key areas of the business (known as internal auditing) or scrutinising another company’s business (this is known as external auditing and is a legal requirement). Professional services and accountancy firms are among those who provide external services for other firms.
A lot of banks and financial institutions also have graduate schemes that, if not completely focusing on compliance, at least have a rotation covering it.
What skills and qualifications do I need to work in compliance?
Most employers state a preference for a degree in a numerate, business or law-based field, with a 2.1 or higher. However, some employers don’t mind which field your degree is in, so be sure to check. Some request a minimum of 280+ UCAS points from three A Levels.
Graduates who want to work in compliance should have the following skills and attributes:
- an ability to balance your interpretation of regulations with the business objectives of your employer
- problem-solving skills
- analytical skills
- organisational skills
What will I be doing in a compliance job?
Graduates who work in compliance are typically given a particular product area to review and usually work in a team, often including a manager and a previous graduate. Some day-to-day tasks could include outlining regulatory risks, impacts and considerations, as well as providing compliance advice to anyone within the business.
Will I study on-the-job qualifications?
Once you’ve got onto a graduate scheme, some employers will support you in further learning. Available courses include the CISI Diploma in Investment Compliance or the ICA Diploma in Compliance, among others.
Would I enjoy working in a regulatory or compliance role?
Working in regulation or compliance means you’ll get an insight into many business areas, a high level of responsibility fairly early, and you’re also likely to have a reasonably healthy work/life balance. On the other hand, it’s likely you’ll be under a lot of pressure, making important decisions that may have far-reaching effects. Also, in compliance roles, graduates in big companies could face a slow process when changing the relevant infrastructure in order to meet regulations.
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