‘Back Office,’ Now Upfront

Those unfamiliar with compliance may assume that it is a middle or back-office department that prevents front-office teams, such as investment banking or sales and trading, from "making money". Photo courtesy of Getty Images.

Written by Dominique Nguyen

In many traditional households, a successful future means following a predictable path: be a doctor, work in business, study engineering, or practice law. For Sternies of course, the second option is most prevalent. What about those students aiming to combine two, or even three of these fields? When I tell others that I’m recruiting for a compliance internship, the reaction is often akin to alerting a mild-mannered friend that I’m about to get a tattoo. It’s a mixture of bewilderment and curiosity. I’m questioned “Why?” and “Is your mom gonna be cool with it?”

Sternies on a pre-law or a pre-med track may be rare, but we’re here.

Those unfamiliar with compliance may assume that it is a middle or back-office department that prevents front-office teams, such as investment banking or sales and trading, from “making money”. Perhaps that’s why the lines to speak with compliance professionals at networking events are 1/8th the length of those for managing directors in banking. The “back office” is the last place many Sternies see themselves, fearing low pay, lack of respect, and career stagnation. This is an outdated and grossly inaccurate description of the promising opportunities in compliance.

Compliance helps to ensure that banking activity is in sync with all applicable laws, rules, and regulations. Rather than stopping bankers from “making money”, compliance officers proactively prevent illegal activity that would cause the firm to incur hefty legal fees and would tarnish the firm’s reputation.

Following the 2008 financial crisis, economists and government officials agreed that stricter financial regulation was vital to economic recovery and sustained success. On July 21, 2010, President Barack Obama signed the Dodd-Frank Act into federal law as a response to the Great Recession. The Act changed the regulatory structure of the financial industry and increased oversight of specific institutions that contribute to systemic risk. In short, it attempted to end the “too big to fail” notion.

The landscape then changed for the field of compliance — and for the better. Compliance officers have become even more indispensable to a bank, with departments and salaries growing fast. Because of the relatively small number of people with expertise in the field, compliance professionals also tell me that promotions are rapid. I’ve also learned that a good number of people who start off in compliance eventually earn their JD and or work full-time at a law firm.

While I became serious about compliance when I started recruiting in the fall of my junior year, I first heard of it as a sophomore. In LC-15 on a Thursday afternoon, I attended an event hosted by the Stern Business and Law Association, assuming that a lawyer would be speaking about his or her journey to become rich and successful. Instead, a man in his early 20’s came in and described compliance work at Barclays.

I never knew that role existed. From my naïve perspective, working at a bank meant trading stocks and sleeping four hours a night. This guy didn’t do that. He studied financial laws from several nations and developed compliance plans across the bank’s divisions – all while getting around seven hours of sleep a night. That’s more shut-eye than I get now.

By writing this article, do I expect lines at our recruiting events will now veer towards Compliance and Internal Audit professionals? Not exactly, but I hope my experience does shed light on a career opportunity for those rare Sternies seeking a career that directly focuses on both finance and the law.

If you’re a Sternie looking to go into Compliance, don’t expect many of your competitors to be your peers. You’ll find more students from CAS, many of whom have structured their entire undergraduate careers in pursuit of law degrees. Don’t sweat it; just make sure to stay awake in your Law, Business, and Society class.

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