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Thank you Claire – good morning everyone.
TheCityUK is delighted to be partnering with the Financial Services Skills Commission to spend a day focusing on our most important asset: our people.
You may know the financial and related professional services industry employs nearly 2.5 million people across the UK – two thirds of them outside London – so the implications of these conversations for the UK as a whole are significant.
And the role of TheCityUK is to represent and rally the industry to achieve its full potential.
Thank you to our sponsors for today: Lloyds Banking Group, Yorkshire Building Society, Capital One and Phoenix. The commitment of these four institutions to diversity and professional development provides leadership to our industry as a whole, while the mix of sectors our sponsors represent shows how important this topic is for our industry.
I have spoken previously about the things our industry needs to grow its global leadership position: innovation, agility and insight among them.
Those are things we learned through the pandemic, which was thrust upon us unexpectedly; but they are learnings we must continue to develop to prepare for whatever lies ahead.
With the first quarter of this century bookended by the 9/11 attacks on the US and the first conflict on European soil for 70 years – and with a global financial crisis and global pandemic in between – we would be naïve to think that the second quarter of this century will not also throw up challenges of similar magnitude and impact.
Our response must therefore be to focus on preparation and adaptation.
So, thinking of the focus of today’s event: what are the challenges we face in attracting and developing the skills we need for the future?
As I reflect on my career, one of the big changes has been the approach towards skills and career development.
When I started out, fresh recruits would join a graduate programme, be taught the relevant skills for their job. In my case this was about learning to: read a balance sheet; to develop credit skills; to understand the cost of capital; to learn about the products and services banks provide to their customers.
But it also went beyond that: teaching me how to get things done in large organisations, how to write business proposals, how to build relationships of trust, what good customer service looks like and how to negotiate.
It was not unusual for employers to derive a substantial return on this investment with graduate recruits who remained loyal to their firms for decades – perhaps even their entire careers.
But over time, as the market has become more flexible, and there has been a shift away from life-long learning, our approach to skills and development has changed.
Large corporations invest less in training and development and expect more from potential new hires at the point of recruitment. The goal is now to get the right training to the right person at the right time.
Against a backdrop of rapid digitalisation and changing demographics, the onus is much more on the employee to consider their potential path and to acquire the skills needed to achieve their goals.
But it is not all on employees: employers are having to learn to be more agile, creative and forward thinking about the types of skills they need to succeed.
Recruitment is expensive, and too much turnover can make it hard to develop a shared culture and value system within an organisation.
A report last year on Future Skills from the Financial Services Skills Commission highlights this challenge: with one in eight roles in our industry now tech-focused, there is a tendency to hire new people rather than reskilling current employees. In doing so, we fail to address the underlying skills gap.
While Edinburgh boasts the most equal gender balance of AI professionals in Europe; London has three times more AI experts than the next biggest hub, Paris; and the UK has the highest concentration of cyberspecialists in the G20, research from the Commission shows that this growing need for tech roles is exacerbating gender imbalances in our industry.
I think we all recognise we have a skills challenge in our industry: and the solution is to develop people to close skills gaps, not just hire people to plug resource gaps.
That requires careful thought about the skills our people need for our future economy.
For example, in my day job at the Lloyd’s insurance market: what is the role of the insurance broker in a world where AI can automate processes and analyse quotes instantly? What is the role of an underwriter if AI can analyse the data and separate good risks from bad?
The answer is that, just as a phone camera is still not as good as the human eye after decades of development – even if you can add funny filters on a phone – so a human’s ability to make judgements, bring empathy and build trusted relationships will always have a role in our economy: in overseeing the development of AI; in ensuring its interventions are benign and not corrupt; in offering intuition when the data leads to the wrong outcomes.
AI is sophisticated and useful, but we will always need the emotional intelligence at the heart of a human interaction.
That means training our brokers and underwriters in the way we did ten or twenty years ago won’t cut it. We must focus their development on the ‘value add’ activities that enable them to be most effective in the use of data and technology.
The same is true of our workspaces: technology enables flexibility and connection, but we must blend this with the subtleties, synergies and creativity which only emerge when we gather in person, and which have always been a core component of the most dynamic parts of the UK economy.
So how do we meet these challenges?
As a people-centred industry, we must integrate our customers’ and clients’ changing needs with the changing expectations of our current and future employees.
That means listening to what they are telling us – whether through data gathering and reporting or customer and employee surveys – before acting quickly to show we’ve heard what they’re saying.
It means ensuring our people reflect the communities we serve. We’ve made good progress in recent years, but we need to do much more to foster diversity at all levels of our organisations.
But it also means connecting – joining up to maintain the UK’s attraction for domestic and overseas talent.
And people come here for the UK’s unparalleled access to overseas markets and the dynamism of our ecosystem, our integrated ecosystem of businesses, policymakers, regulators and academics, and to be part of our world-leading banking, asset management, insurance, legal, accounting and consulting sectors.
We must build this connection between regions: with two thirds of our industry outside London, addressing skills gaps across the UK is essential to our future success. There is already good work underway, for instance through the Yorkshire and Humber Financial Services Skills Commission setting out a framework for skills development in the region.
But more needs to be done to close these gaps – including through the further devolution of powers around education and training and reform to the apprenticeship levy.
We also need to connect between countries. As the UK adjusts to life outside the EU, continuing to foster strong relationships with international partners, from the Atlantic to the Pacific, will ensure future employees can access the same opportunities many of us were lucky to receive. Again, the UK’s post-Brexit mobility regime is already helping create these opportunities.
But we must also connect between organisations. Secondments, courses and networking between our organisations aren’t a threat to our future success – they’re a core part of it.
I see this in the work of TheCityUK’s Next Generation Leadership Council, where emerging leaders representing all the City’s sectors come together to discuss and address the most pressing problems facing our industry today.
Exchanging ideas and developing cross-sector skills will leave us with a better equipped, more flexible workforce that can adapt to the continued change in our external environment. It’s a win-win for those involved
The shifts we have seen in recent years are only going to accelerate in the years ahead.
The UK economy has a proud history of innovation and imagination to respond to historic challenges; we need to draw on all of that embedded capability to develop a state of readiness for the shifts of the future.
That looks like an industry where employees are taking control of their own development; enabled by supportive employers; working in a joined up economy that offers access and opportunities not found anywhere else in the world.
It’s a privilege to be working with the Financial Services Skills Commission and others in this room to create those opportunities and prepare our people for the future, and I hope our discussions today help accelerate our ability to adapt in the months and years ahead.
Thank you.
