We need up-to-date skills to bolster financial services
As the government prioritises growth in pursuit of a “big bang 2.0”, it’s worth considering what it takes to grow one of our most critical sectors: financial services.
Last week Multiverse launched a new research report looking at what the future of financial services in the UK looks like. The message from employees in every corner of the country was skills, skills, skills.
This industry is going through deep and profound changes. Digital transformation is reshaping how institutions do business. Artificial intelligence, machine learning, high-end data analytics, and software and product design are now core parts of how firms operate. As these skills become increasingly important for more businesses, skills gaps widen and recruiting talent becomes even harder.
Digital transformation is the biggest driver of change in the sector, with 83 per cent of employees believing jobs in the industry will be significantly impacted. Banks are competing with tech companies for talent, critical roles remain unfilled, and entry-level employees are often entering the labour market without the necessary skills for the workplace. On top of this, financial services is already one of the least diverse sectors, a factor which risks deterring potential recruits.
Alarmingly, two-thirds believe their colleagues will soon be at serious risk of redundancy without digital and data skills. Nearly two in five say they don’t think they’ll be working in the sector in the next five years.
New skills are needed at an unprecedented rate, as the existing workforce is insufficiently skilled already. Many are looking to leave the sector, and the line of talent to make up for the shortfall is increasingly unstable. These are all huge problems that could hamper the growth of our financial services industry.
There are rarely silver bullets in similar policy debates. But when it comes to these challenges, apprenticeships can be a viable solution to each and every one.
Apprenticeships come in two forms. The first is bringing people straight from college or school into a business. These apprenticeships can be used to train young professionals in data science, software engineering, or digital skills. Apprentices are hungry, quick to learn, and ready to be moulded to the way a Morgan Stanley, a Starling Bank, or a Hargreaves Lansdown needs them to work.
Existing employees in financial services overwhelmingly back bringing more apprentices into the industry. Two-thirds said this is key for tackling skills gaps and there is huge support and demand for such a move.
The second form is built as a response to the need for the radical reskilling of the workforce. As the nature of a business changes, some roles will no longer be required. Rather than running expensive redundancy processes and losing the talent of committed employees, businesses are turning to mid-career apprenticeships to retrain their workforce for new emerging jobs. Of those who didn’t think they would be working in the sector in the next five years, two-thirds said they would likely stay longer if they were offered retraining like this.
So what does this tell us about growth? The government’s own data outlines the case for apprenticeships perfectly. They found that for every pound spent on an apprenticeship, £28 was generated for the economy.
The conversation about growth cannot afford to be skin deep for financial services. Tackling skills gaps, providing routes for those from every background, and transforming uncertainty about the future into practical opportunities must be a priority for every leader in the sector.