A World of Opportunity
History has shown us that after every crisis comes new opportunity. Although, the Covid-19 recovery journey is far from over for many financial services businesses, the pandemic has truly opened up new pathways for firms to conduct business globally. Rapid technological advances, in particular, are causing firms to take a long-hard look at the skills and employability of their workforces within a global marketplace that is increasingly focused on driving operating efficiencies, mitigating against operational and regulatory developments, entering new markets and developing new products or services for increasingly sophisticated customers.
All of these ongoing, organic changes to the fabric of how business is done are now being addressed within the wider context of the changes to our working lives impacted by Covid-19. The Covid-19 pandemic is far from over, but in some parts of theworld there are at least encouraging signs that we are beginning to learnhow to live with it. We have seen that on the whole people have adapted surprisingly well to lengthy periods of working from home, for example, and the new normal for millions of office workers around the world looks likely to involve a hybrid model, with far more remote working. With less face to face time available for ‘on the job’ training we believe formal action to address skills gaps becomes more and more critical with each passing day.
Closing The Digital Skills Gap
The consensus view is that the pandemic has sped up the adoption of digital technologies, perhaps by several years. As a result, the world of work is now changing so rapidly that some highly experienced leaders and L&D managers may have trouble identifying the exact mix of skills they really need to stay relevant right now and this is making it harder for them to produce accurate employee role profiles, conduct skills assessments or develop training initiatives that can deliver lasting value across the enterprise.
Business culture is going to need to undergo profound change as well. There will be early adopters, who will spot new opportunities and move quickly to invest in reshaping their operations. Of course, the pace of change will be uneven and there will also be some laggards. The pandemic has exposed vulnerabilities for some firms who will find that their business models are going to become obsolete much more quickly than anyone had anticipated.
According to Rand/SalesForce, if we can’t close the digital skills gap, then it is going to cost us dearly – 14 G20 countries could miss out on $11.5 trillion cumulative GDP growth. So, firms really do need to focus on putting the right upskilling and reskilling initiatives in place now, even if the direct benefits may be some years away. Training initiatives that offer eventual pathways to increasingly in demand roles – like data analysts or future risk managers for example – are key. This is because some of the core technologies that organisations use to produce vast volumes of data have become fully embedded into business operations, and organisational expectations for what can be achieved by data interpretation have increased beyond the skills of the general workforce to support them – regardless of the fact that the right analysis frameworks and best tools used to interpret these at scale means they are not yet fully embedded in many global workforces.
Developments such as 3D printing, 5G connectivity, artificial intelligence, machine learning, robotics and augmented reality also have the potential to change the way business is done in ways that we cannot yet imagine. We can see first-hand that new business models are emerging all around us and that these are destined to reshape our lives and working careers.
The Key Drivers of Digital Transformation
There are five main drivers for this global digital transformation:
- Mobile technologies and social media: both of these are changing society and changing the way workplaces operate. Young people coming into the workforce today are digital natives – traditional work models do not necessarily work for them, so industries/employers must learn how to deploy digital tools and adapt to the fast changing environment.
- Changing customer expectations: customers are less loyal than they used to be and have higher expectations of the businesses they deal with. They are increasingly price-sensitive and expect service to be highly responsive and delivered consistently across all channels. They also expect constant innovation, resulting in shorter product lifecycles than in the past, and there is an expectation that new products will be digitally enabled.
- Extended enterprise: products and services can now be designed and delivered through co-operation between multiple parties operating in multiple jurisdictions. The digital transformation is opening up a whole new approach to manufacturing.
- Big data and analytics: the ability to gather and analyze huge amounts of unstructured data very quickly is providing insights about customer behaviour, product performance and much else besides, that were previously out of reach. Machines can be made intelligent and can be remotely monitored.
- Cloud-based services: businesses no longer have to invest in and operate their own (often expensive) IT services. Using externally managed cloud-based services and other web-based solutions, they can greatly reduce their infrastructure costs and increase their operational flexibility.
Keeping Pace with Global Regulation
It will also be vital for many employees within the financial services industry to have the right skills and data insight in place to keep pace with changing global regulations. Even before the pandemic, many countries had begun to expand the scope of their regulatory frameworks, with higher levels of reporting, monitoring and enforcement, and more dialogue between national regulators.
In order to cope with the fast-changing world of digital business and regulate it effectively, we expect to see regulatory bodies acquire greater regulatory powers and become more sophisticated – they will need to be part of the digital transformation themselves. They will also have to become better connected with each other in order to reduce the risk of regulatory ‘arbitrage’ by global businesses.
A Greener Future – The Demand for ESG Talent
ESG is front and centre within many firms, reflecting the crucial role of the financial services industry in the transition to net zero. The demand for ESG skills is rapidly rising and the integration of ESG factors is also becoming a key consideration within many digital transformation initiatives. Many companies are using the IOT or starting to develop AI-driven models of ESG analysis to create standardised frameworks and present data or findings in a digestive format. Young professionals who have gained an expert understanding of both technology and ESG will be crucial for many new roles in future.
Ready To Work – Putting Digital First
According to The World Economic Forum’s Future of Jobs Report (2020), 50% of all employees will need reskilling by 2025, as adoption of technology increases. Furthermore, greater adoption of technology will mean in-demand skills across jobs change over the next five years, and skills gaps will continue to be high. For those workers who stay in their roles, the share of core skills that will change by 2025 is 40%, and 50% of all employees will need reskilling (up 4%).
In its recently published Global Digital Skills Index, Salesforce found that there is a growing digital skills crisis with three out of four professionals saying that they do not feel ready to work in a digital-first world.
It is therefore paramount for us to continue to actively address the financial services skills gap in the next few years; by identifying the right learning pathways we will ensure the rapid upskilling of not only this generation of financial services professionals, but put in place employability programmes that truly encourage young people to work in the financial services industry and have long-term rewarding careers.
Kevin Poulton, Managing Director of Product strategy, Fitch Learning
Kevin Poulton has worked for Fitch Learning for over 15 years in various roles. In his current position as Managing Director of Product Strategy his focus is on developing and improving global products. He has a background in software development and a real personal interest in the ability of technology to create fundamental changes in markets and industries. Kevin holds an MBA from London Business School.