Thursday 24 June 2021 12:24 pm Avado Talk

Banking’s got talent? Digital disrupts the City’s skills requirements

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The world of financial services is changing fast, with the trend towards digital provision accelerated by the Covid-19 pandemic.

From the growing use of mobile banking to the surging interest in fields such as artificial intelligence (AI), technology’s transformative impact has all sorts of consequences.

One of those is on the evolving mix of skills required by the City’s biggest employers: do major financial services companies have the talent to minimise the challenges and maximise the opportunities arising from the ongoing digital disruption? And as financial services become increasingly digital, which skills are most in demand?

These questions are especially prominent across financial services as companies strive to understand how the world will look after the pandemic – and make strategic investments in their workforce.

‘Increased disruption from megatrends’

‘Financial services relies on highly-skilled talent to innovate, adapt and succeed. This reliance is only growing at a time when the sector is facing increased disruption from megatrends such as new technology, reliance on data, globalisation and changing workforce demographics,’ Financial Services Skills Commission (FSSC) chief executive Claire Tunley observed in a blog post earlier this year. 

But many financial services firms are struggling to recruit the skills they require and are facing stiff competition for tech-related skills from across the broader economy. As job roles evolve, companies are also retraining existing staff and broadening the talent pools they recruit from, Tunley pointed out.

The creation of the Commission was a recommendation of the Financial Services Skills Taskforce (2018-2020). It identified the challenges that technology, demographic change and globalisation are having on the UK financial services sector, and developed five recommendations.

Then along came Covid-19, bringing a whole new dynamic. “The pandemic has thrown into stark focus the skills gap we already knew we had,” Tunley told City AM this week.

Digital and analytical skills are particularly in demand, while investment in learning and development is not keeping pace with the sector’s evolving needs, she says.

‘Skills issue bigger than any one firm’

The FSSC has a growing membership of about 30 companies, overall employing about one third of the UK’s financial services workforce. It has an increasing number of initiatives on the go, focused on encouraging cross-industry collaboration. “The skills issue is bigger than any one firm,” Tunley points out.

The organisation is currently consulting members on a framework of ‘eight future skills’ (four technical and four behavioural), identified by firms, that cut across financial services. In the former category those skills are: user experiences; agile; cyber-security; and machine learning/AI; in the latter category they are: adaptability; relationship management; teamwork; and empathy.

The aim is to build a “common understanding” across financial services as to the key skills that future workforces will need and then use the agreed framework to support greater investment in reskilling and upskilling.

The skills challenge, of course, is just as pertinent to employers located outside the capital. The FSSC will next week (28 June), alongside the Professional & Business Services Council (PBSC), launch a research report on ‘Regions and Nations Future Skills’. Diversity and inclusion is also a priority, with the FSSC planning to launch (on 14 July) a practical tool for organisations to measure inclusion in their workforce.

Fintech also ‘threatened by potential skills deficit’

It is also not solely the more established financial services companies that are battling to keep up. The HM Treasury-commissioned ‘Fintech Strategic Review’, led by Ron Kalifa OBE, devoted one of its workstreams to ‘Skills and Talent’, concluding that the UK’s celebrated fintech sector’s positive growth projections are ‘threatened by a potential skills deficit’ and that ‘access to qualified and suitable talent remains one of the biggest challenges’.

Farzana Choudhary, associate director of people operations at the lender OakNorth, told the review that ‘deep expertise in AI, data and machine-learning are in short supply’ while Nicholas Taylor, senior public affairs manager at fintech company Revolut, said the ‘main skill in demand is the ability to handle data and the ability to quantify and make decisions based on data’.

Kalifa’s report also set the fintech sector in a broader context, referring to a Confederation of British Industry (CBI) report published last October that said a whopping 90 per cent of the UK workforce will need to be reskilled by 2030.

Competition for skills ‘will intensify’

Buffeted by digital disruption, it seems that established financial services providers need to run faster just to stand still.  

“For decades, large financial institutions have failed to convert the vast quantities of user-generated data they possess into useful information and delightful experiences. In contrast, fintech firms exist to do exactly this,” observes Charlie Mercer, head of economic policy at the Coalition for a Digital Economy (Coadec).

“Competition for the programming, AI, machine learning and coding fluency skills that make this conversion possible will intensify as banks wake up to the opportunity,” he adds.

Recruitment is important but there is a broader point about learning and development. “Large financial services organisations have, in many cases, built silos of digital expertise – partially through reskilling but largely through buying in digital talent or acquiring start-ups – enabling them to create digitally-focused propositions for their customers,” observes Tom Stevens, director of corporate partnerships at Avado.

But he adds: “In order to maximise the opportunities that technology and data pose for growth, a culture shift and organisation-wide capability transformation is required.” 

‘People will drive this change’

Can the City’s major employers rise to the skills challenge? Given the importance of financial services to the economy, it’s an important question – and gaining saliency.

“The future success of the financial services sector will depend on its ability to adapt, evolve and innovate constantly,” Tunley says.

“It is our people who will drive this change,” she continues, adding: “We must equip them with the skills and capabilities they need to respond to the challenges and opportunities stemming from digital transformation.