• Chris Livesey, CEO at AutoRek


• 24.07.2024 01:00 pm
#financial #industry #DigitalTransformation

Finding and retaining top talent is a significant challenge for all industries, particularly within the financial services sector. According to The Financial Services Skills Commission, an estimated 160,000 workers in the financial services sector require upskilling, which is approximately 16% of the entire UK finance workforce.

Failure to address the skills shortage could result in loss of competitive edge, operational inefficiencies and difficulties in customer retention, jeopardising the long-term sustainability of businesses. These issues cannot be addressed by individual firms alone, they require a sector-wide response across banking, insurance, asset management and also fintech.

Mind the gap

Financial organisations need effective strategies to both attract and retain the best talent available. By 2035, the sector is estimated to lose over 260,000 highly skilled people through retirement and attrition. This is worrying when high inflation means increasing salary costs across the board, making it harder for firms to then attract new talent. Coupled with this, the coronavirus saw c-suite workers retiring early which subsequently resulted in mid-level management moving into higher roles without adequate time to train junior staff.

Why tech skills are ‘essential’ across the financial services industry

The financial services industry often prioritises the front end product but the back-office is really the engine driving any financial organisation. The financial industry often requires a very specialised skill set. It includes a grasp not just on finance, but it is also important that employees are also proficient in data analytics, digital technology and risk management. And, with technology continuing to develop at pace, firms need talent who can adapt to these latest technological changes. For example, investing in technology and automation can help finance professionals to streamline processes, enhance operational efficiency, and reduce the burden on human resources.

Banks have tried to reposition part of their businesses as they transform the digital banking experience for customers. But competition for technology and data talent is fierce, leaving millennials being drawn to companies with innovative projects, a dynamic corporate culture and significant equity packages.

Work in progress

Across the industry, it’s becoming increasingly apparent that repetitive tasks are a crucial reason why people give up their jobs. According to a recent study, more than a third of respondents in the insurance industry still rely on spreadsheets for their reconciliations. Spending excessive time on billing and payment-related tasks can hinder and distract staff from other critical aspects of their roles. By removing repetitive tasks, employee retention is expected to increase.

AI can automate tasks like underwriting, claims processing and customer service, helping insurers make faster and more accurate decisions, and free employees to focus on higher-priority items — such as improving the policyholder experience and increasing customer loyalty. Last year, Allianz announced it had developed a machine-learning 'Incognito' tool to support growing fraud claims.

The path forward

Addressing the talent shortage is critical, particularly in understanding and attracting millennials.  Financial services need to attract this vital demographic — but that requires some radical change. Embracing digital transformation can make workplaces more attractive to younger talent, offering an exciting opportunity to innovate and evolve. Continuous evolution is necessary to stay relevant, innovative and competitive.