Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

At Goldman, traders are out and compliance is in

Lloyd Blankfein, chairman and CEO of Goldman Sachs.
Katie Kramer | CNBC

Some Wall Streeters shake their fist at regulatory burdens imposed on the industry in the wake of the financial crisis. But a few finance pros have regulators to thank for their employment.

For now, at least.

Goldman Sachs CEO Lloyd Blankfein spoke Tuesday at the Credit Suisse Financial Services Conference in Miami, and highlighted the biggest drivers of hiring at the investment bank: the increased need for regulatory and compliance professionals, thanks to myriad new rules from Washington.

"We've also had headwinds, because of structural things, of increased head count and most of it is to support heightened compliance efforts," Blankfein said.

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He pointed out that Goldman's staff has increased by more than 3,000 since 2012. But, not everyone in the bank's compliance department should get too comfortable.

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"What I'm hopeful for is that this has a Y2K feel about it," Blankfein said, explaining "once we catch up and once automated, we probably will be able to reduce that head count and some of these costs."

And compliance pros shouldn't necessarily expect to be working in New York. When it can, Goldman is focused on keeping spending down through placing employees in lower-cost operations centers, in places like Bengaluru, India; Salt Lake City; Warsaw, Poland; and Texas.

The bank now houses about a quarter if its staff in lower-cost centers, Blankfein said. Goldman's increase in staffing runs counter to what is happening at other large U.S. consumer banks, where head count is being reduced and branches are being shuttered.

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In his statement, Blankfein told attendees the bank is "not cutting our way to prosperity," though it has decreased staff in other segments of the business, like its fixed income, currency and commodities trading division.

"Our FICC head count is down 10 percent since the beginning of 2012," he noted, adding later: "We can do more on the cost side of it if we have to. We can always do more."