HR in financial services is a documented process, or it is a finding
In most industries, an HR decision that was made sensibly but documented badly is a minor problem. In a supervised financial institution it is an audit finding. The Federal Financial Supervisory Authority (BaFin) and, for larger institutions, the European Central Bank expect HR processes that can be reconstructed: how a managing director was assessed as fit and proper, how risk takers were identified, how variable pay was designed and deferred under the Remuneration Ordinance for Institutions (InstitutsVergV), and who approved what and when. HR does not interpret those rules, compliance and legal do. But HR has to run the procedures, every time, in every entity.
The international dimension makes it harder. A financial services group with entities in Frankfurt, Luxembourg, Vienna and eight other countries typically has eleven HR processes that grew locally, each defensible on its own and none consistent with the others. The supervisor asks for one demonstrable standard. Local employment law, local works councils and local payroll say otherwise. The balance between central standardisation and local legality is, in my experience, the hardest HR problem in this sector, and the one most often left to whoever is least busy.
AI arrives into that environment as a formal project, not a productivity tip. Data protection under the GDPR and the Federal Data Protection Act (BDSG), the EU AI Act's high-risk classification for hiring tools, and co-determination under Section 87 of the Works Constitution Act (BetrVG) all have to be settled before a single CV goes into a model. That is slower than in a scale-up, and it should be.
Typical HR triggers in financial services
Three situations in which, in my experience, a managing director, COO or head of HR calls:
An audit has found HR
Internal audit or the supervisor has flagged documentation gaps in hiring, remuneration or fit and proper procedures. The findings have deadlines, and the HR team has never built a process to that standard.
Twelve entities, twelve processes
Group HR wants one standard for onboarding, performance and pay decisions across countries. Every local HR lead has a reason why theirs is different. Nobody owns the harmonisation.
AI, but compliant
The business wants AI in recruiting and HR administration. Compliance wants a documented assessment first. The works council wants an agreement. HR is in the middle with no process.
Which role fits a financial services firm
The process and compliance side of HR in a regulated environment is the natural home of HR Operations: documented procedures per decision type, one standard across entities, payroll governance, HRIS with data an auditor can trust. This is the role in which I ran HR across twelve countries in a regulated financial institution.
If the HR lead role itself is vacant, the fit is Interim HR Manager: full ownership, full-time, three to eighteen months, including the works council, the managing directors and the interfaces to compliance and legal. For the AI question specifically, the compliance path is laid out under The Works Council AI Agreement and GDPR and AI in HR.
A case from a past role
In a regulated financial institution I was responsible for HR work across twelve countries. Documentation requirements were heavy, and each country had built its own version of onboarding, contract changes and performance documentation. The task was one consistent process standard that satisfied the supervisor and still respected local employment law in each entity: shared templates with local annexes, one approval logic, one filing standard, and a review rhythm that caught deviations before an auditor did. The write-up, anonymised, is under HR Across Twelve Countries for 4,400 Employees.
How an engagement runs
30 minutes, directly with me. You describe the entities, the findings or the project, and the HR setup. Within one working day I say whether and from when I can help.
Processes by entity, open findings, remuneration and fit and proper procedures, tools and data protection status, works council agreements. Access and clearance arranged. Day-to-day HR keeps running.
Procedures documented per decision type, standard rolled out across entities with local annexes, AI use cases assessed with compliance and the works council. Weekly one-page report to management.
Documented procedures, filing standard in place, open items with status, and if wanted the permanent HR lead recruited and onboarded.
Operational HR across twelve countries at a bank, a working-from-abroad policy for 4,400 employees, plus HR Manager and Head of People roles in international companies. More about me
Questions from financial services leaders
Do you know the supervisory requirements that reach into HR?
Yes, from running HR across twelve countries in a regulated financial institution. The Remuneration Ordinance for Institutions (InstitutsVergV) shapes bonus design and identification of risk takers, fit and proper assessments apply to managing directors and key function holders, and every process has to be documented in a way that an auditor can follow. This is practical experience, not legal advice.
How do you introduce AI in a regulated environment?
More carefully than elsewhere. Every use case gets a documented data protection assessment, a works council agreement where co-determination applies, and a human decision at the end. The compliance side is described under AI for HR Teams, and I would rather start with reference letters than with candidate screening.
We have twelve country entities and twelve different HR processes. Is that normal?
Very. Processes grow locally and nobody harmonises them until an audit asks why the German entity documents a hire differently from the Luxembourg one. The task is one standard that respects local law, not one template forced on everyone.
Can you work with our compliance and legal functions?
That is where an HR lead in this sector spends part of every week. I bring HR process knowledge; compliance and legal own the interpretation of the rules. The work is to make the two fit into procedures that people actually follow.
How does the works council fit into a regulated environment?
The same rules as everywhere under the Works Constitution Act (BetrVG), with the twist that many HR decisions in financial services are also constrained by supervisory requirements. A works council agreement on bonus rules has to fit the remuneration ordinance. I prepare both sides before the negotiation.
How fast can you start?
Usually within two weeks of being engaged. Onboarding into a regulated environment takes a little longer because of access and clearance procedures, and I plan for that.