Recruiting for Risk, Compliance, and Audit Roles in Smaller Banks

Introduction

For community and regional banks, risk, compliance, and audit functions are no longer just back-office necessities—they are front-line priorities. Heightened regulatory scrutiny, increased cybersecurity threats, and the complexity of new financial products are making these roles essential. Yet smaller banks often face acute challenges in recruiting and retaining skilled professionals for these positions. With larger institutions and fintechs competing for the same limited pool, community banks must rethink how they attract and retain this critical talent.
 

The Rising Demand for Risk and Compliance Professionals

• The American Bankers Association (ABA) reports that over 70% of community banks identify compliance staffing as a top challenge heading into 2026. (aba.com)

• According to the Institute of Internal Auditors (IIA), demand for risk and compliance officers has grown by 15% annually since 2021, with community banks feeling the tightest pinch. (theiia.org)

• A 2025 Deloitte Risk & Compliance Survey showed that 62% of regional banks struggle to hire for BSA/AML, cybersecurity, and internal audit roles, citing salary competition and a shortage of hybrid skill sets.

Why Recruiting These Roles Is Challenging

1. Regulatory Complexity
   Smaller banks must comply with the same rules as larger institutions—AML, BSA, OFAC, FFIEC guidelines—yet with fewer resources. This creates high demand for professionals who can handle multifaceted compliance responsibilities.
2. Hybrid Skill Set Requirements
   Today’s compliance roles require knowledge of both traditional regulatory frameworks and fintech-enabled risks such as digital lending, open banking, and real-time payments. Finding candidates with both regulatory and technical literacy is difficult.
3. Talent Drain to Larger Employers
   Big banks and fintechs can outpay smaller institutions, offering bigger salaries, flexible work, and faster career advancement. Community banks often lose candidates at the offer stage.
4. Reputation of Smaller Banks
   Candidates sometimes perceive smaller banks as “less innovative” compared to fintechs or national institutions. Without strong employer branding, community banks risk being overlooked.
5. Generational Shifts
   Younger professionals want purposeful work, flexibility, and tech-forward environments. Banks without hybrid work or cultural evolution risk being left behind.

Strategies for Recruiting Risk, Compliance, and Audit Talent

• Competitive Compensation: While community banks may not always match big-bank salaries, they can emphasize unique benefits like close-knit culture, visibility to leadership, and long-term stability.

• Professional Growth: Offer certifications (e.g., CAMS, CISA, CIA) and tuition reimbursement to appeal to younger candidates.

• Hybrid Work Models: Remote or hybrid options are increasingly critical for compliance staff who handle digital workflows.

• Employer Branding: Market compliance as a strategic function, not a burden—showcasing impact on safety, trust, and innovation.

• Partnerships with Universities: Build pipelines by engaging with business and finance programs offering risk/audit specializations.

Case Example: Midwestern Community Bank

A $1.5B-asset community bank faced recurring turnover in compliance. Recruiters worked with the bank to create clearer job paths, offer certification support, and emphasize hybrid work flexibility. Within six months, they filled three vacant roles and reduced attrition by 20%.

Case Example: Regional Bank in Florida

A regional bank needed an internal auditor with fintech knowledge. By reframing the role as a “strategic partner” in the bank’s digital journey, and offering leadership visibility, recruiters attracted a candidate who had previously been considering a fintech.

The Recruiter’s Role in Compliance Searches

Specialized recruiters help by:

• Benchmarking salaries and certifications.

• Identifying candidates from both banking and fintech compliance backgrounds.

• Managing confidential searches where regulatory scrutiny is involved.

• Advising employers on positioning compliance roles as value-add rather than cost centers.

The Candidate Perspective

Risk and compliance professionals ask questions such as:

• Will I have support and resources to manage complex compliance demands?

• Does the bank view compliance as strategic, or just a regulatory checkbox?

• What opportunities exist for certifications and professional development?

• Will my role evolve with digital banking trends?

Recruiters help answer these questions transparently and connect candidates with employers who invest in compliance as a career, not just a function.

Future Outlook: Risk & Compliance Recruiting Beyond 2026

• Greater integration with technology: Compliance teams will increasingly need digital literacy, working alongside IT and cybersecurity.

• Rising regulatory pressure: New guidance on digital assets, payments, and AI will expand the scope of compliance work.

• Expanded career pipelines: Banks that create structured compliance career ladders will retain staff longer.

• Cross-industry recruiting: Candidates from fintech, healthcare, and insurance may increasingly enter banking compliance roles.

Summary

Recruiting for risk, compliance, and audit roles in smaller banks is a challenge driven by regulatory complexity, hybrid skill demands, and competition from larger employers. To succeed, community banks must embrace competitive compensation, flexible work, certification support, and employer branding that reframes compliance as a mission-critical function. Candidates gain opportunities for meaningful, impactful work, while recruiters serve as trusted guides in this increasingly competitive space.