The UK's financial services industry is facing an "existential skills crisis", says a Government-sponsored report, with graduate recruitment on the wane and existing staff unable to keep pace with dizzying levels of technological change.
An interim report from the Chancellor’s Financial Services Skills Taskforce, chaired by Mark Hoban and convened by TheCityUK, with support from the City of London Corporation and EY, identifies a series of major skills challenges facing the sector.
These include a low spend on training, a lack of diversity at all levels and problems with the City's perceived values and culture. It also found the technical skills needed by financial services firms are evolving faster than roles can be currently be filled.
Hoban warns that if the sector fails to adapt, the UK’s position as a world-leading international financial centre could be put at risk.
"This is an industry that runs on talent. But financial services is facing an existential skills crisis because of the pace of change in the sector," he says. "The digital revolution is transforming the sector and affecting its people too. The skills needed to run these organisations are changing rapidly. Tackling these challenges and equipping the industry for change will require a transformational, strategic and collaborative approach from firms, with support from government and the wider education system.”
The report found that financial services firms are increasingly struggling to attract the best talent, with MBA graduates from leading schools entering the sector falling from 43% to 28% between 2007 and 2016. Only 10% of young people working in the sector say that they plan to stay long term compared to 18% across all sectors.
The Taskforce suggests that recruitment alone will not be sufficient. It will require a fresh approach, greater investment in training and strategic system-wide change, says Hoban.
A final report and detailed recommendations will be published later in the year.