Clutch Group VP Varun Mehta Quoted in Financial Times Article

July 20th, 2015

Clutch Group VP of Legal & Compliance Solutions Varun Mehta recently spoke with the Financial Times about how banks are ramping up compliance and risk departments in the Asia Pacific and how Clutch Group has harnessed this opportunity with the launch of its new Hong Kong office to better serve clients in the area. Check out full the article below.

Banks vie to build up Asia compliance teams

Ben Bland in Hong Kong

Asia’s compliance and corporate investigation industry is booming as regulators from China to the US crack down on corruption and companies turn to new technologies in a pre-emptive approach after a string of high-profile scandals.

Banks are among the companies suffering from a shortage of compliance officers at a time when a region-wide economic slowdown is putting their managers under pressure to maintain revenues, according to industry experts.

“The battle for compliance talent is tighter than ever,” said Chris Fordham, managing partner for fraud investigation at EY, the accountancy and professional services
group, in Asia.

Varun Mehta, vice-president at Clutch Group, a US data investigation company that has just opened a Hong Kong office, said international banks are looking to “double or treble” the size of their compliance teams in Asia and that graduates with just one year of experience can “easily get three job offers”.

Even as they cut thousands of jobs elsewhere, HSBC and Standard Chartered, which have both paid heavy fines for breaching anti-money laundering regulations in recent years, highlight their compliance vacancies prominently on their careers websites.

In a sign of the shortage of experienced professionals, HSBC advises candidates that they “do not necessarily need to come from a banking background or possess compliance experience”. The anti-corruption campaign by China’s president Xi Jinping — and the bribery conviction and £300m fine handed down last year to GlaxoSmithKline, the pharmaceutical group — has prompted many foreign investors to reassess the risks of doing business in the world’s second-biggest economy.

Elsewhere in Asia, multinationals are facing greater scrutiny amid anti-graft drives in Indonesia and Thailand, as well as from legal authorities in the US and the UK stepping up enforcement of their tough overseas corruption and anti-bribery laws.

“There’s a crackdown in China and other countries, very high-profile scandals in all manner of industries including football, and a desire for regulatory authorities to show their teeth,” said Greg Hallahan, senior director of global risk and investigations at FTI Consulting in Hong Kong. “Companies are seeing their peers affected and there’s a powerful incentive not to be next.” He added that many are starting to be more proactive rather than simply responding to whistleblowers or external complaints.

Clutch Group is hoping to tap into this trend via its office in Hong Kong. “Up until now there haven’t been very good tools to help companies understand what’s going on
internally; they’re just storing huge amounts of phone and computer data and looking through it when something goes wrong,” said Mr Mehta. Clutch and its competitors have developed software to help pre-empt problems by looking for suspicious connections between, for example, bank traders’ use of new slang terminology in emails,
changes in their pattern of working hours and their financial performance.

“We can pick up that trader who is making fewer calls and emails than his colleagues but whose profit and losses are three times greater than the others,” said Mr Mehta, whose company has worked with banks on the Libor fixing scandal and the ongoing investigation by US authorities into hiring practices at some investment banks in China.

While workers are facing ever greater surveillance by their employers, many across Asia worry that the risks come from their managers, according to a survey by EY.

Around half of the 1,500 employees it interviewed in Asia said their local management was more likely to act unethically during difficult times and that, while more companies have been drawing up anti-corruption and bribery policies, one in two say these documents are irrelevant and ineffective.

Link to original article here.