Banks have ramped up their risk and compliance staff in the face of mounting pressure from regulators but it's coming at a cost with recruiters saying salaries have rocketed up amongst a shortfall in locally qualified people.
ANZ - New Zealand's largest bank - says it increased the number of people working in risk and compliance by 33 per cent in the year to July.
That comes on the back of ASB bank's increase which saw it add more than 100 staff in that area in the year to June with more hires to come.
A spokesman for Westpac said it couldn't give a figure for its risk and compliance staff as those staff work across the business and it was also built into most other roles.
But he said the bank had "invested heavily" in risk and compliance in recent years.
BNZ also declined to give numbers but said that over the past few years there had been an increasing focus on the risk and compliance area and it had been "resourcing these teams appropriately".
Chris Heswall, founder and chief executive of specialist banking and financial recruitment firm Virtue Consulting, said it had seen "huge growth" for risk and compliance people across the financial services sector.
"New Zealand banks are publicly under the pump. That probably is a driver. They obviously want to make sure they don't get caught out in some way."
Heswall said those in the regulatory risk, operational risk and credit risk roles were in really short supply and were able to command a premium on their salary.
But it was tough to find locally experienced people.
Comment: What NZ could learn from US on financing small businesses
"Kiwi experience is always a challenge. You have got to look at people coming in from offshore."
He said the large banks were leading the way in recruiting people.
"They are definitely creating large departments."
But he said even small non-bank lenders were hiring compliance people.
In some areas the level of demand had risen 100 per cent and in others it was more than that, he said.
"It is certainly significant and I don't see this going away."
Heswall said people who were able to design and implement a regulatory or risk framework were able to command 30 to 50 per cent above what they were earning three to five years ago.
For those doing more basic "tick the box"-type roles salaries had gone up 10 to 15 per cent.
A head of regulatory risk and governance could command as much as $400,000 to $500,000, while mid-level roles were paying $130,000 to $175,000 and lower-level analysts were getting around $90,000 to $120,000, he said.
Heswall said due to the shortage it was recruiting people from the legal industry who were crossing over into banking - or poaching staff from other banks.
Joe Whitfield, principal consultant in risk and compliance at recruitment firm Robert Walters, said when he first came to New Zealand three-and-a-half to four years ago he recruited people for a range of sectors.
But now the demand had grown so much his role was solely focused on recruiting people for risk and compliance roles and the company had also hired another recruiter to cover that demand.
Whitfield said there was demand across the board for risk and compliance people but the majority of the roles were at the major banks.
"Over the years it has been pretty evenly split [between risk and compliance] but now the focus is on compliance post the royal commission [the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry].
"Conduct has been a hot topic too, certainly."
Whitfield said compliance experts were the highest in demand. He said the banks were fighting it out for those people and that meant they could command a salary premium.
"It's not an insane lift but incremental."
Three years ago compliance experts were being paid $80,000 to $110,000 but now they were getting $100,000 to $130,000. That was for people with four to five years experience, he added.
But he said New Zealand had a shortage of compliance people with only around 1200 experienced people working in those roles.
"We absolutely don't [have enough people].
"We are very much having to bring people in from overseas."
Whitfield said it was also having to get a "bit creative", bringing in lawyers and accountants who wanted to do something different and others who did not have direct experience but could move into that field.
Another area of demand was for people with conduct experience in the aftermath of the Australian royal commission.
Whitfield said recruiters were drawing on people who worked in others sectors involving customer engagement such as retail and telecommunications and may not have experience in the banking and finance sectors.
"It's putting the customer first. It is not just what the banks want to be seen to be doing. It is what they want to be doing."
Whitfield predicted the demand would continue.
"I don't think it is going to drop. Banks are taking their role in a modern society very seriously. I don't think compliance risk is going to go away any time soon. It will only grow."