Claire Tunley speech at the Mortgage Lunch 2022

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Good afternoon, everyone, thank you to UK Finance, the event sponsor Capita and all of you for having me join you this afternoon. I am the Chief Executive of the Financial Services Skills Commission. The Commission was borne out of a Taskforce set up by Phillip Hammond 4 years ago and our mission is to increase the supply and diversity of skills in financial services.

We work directly with banks, building societies, insurers, asset managers, fintechs, chartered bodies, and the regulators to ensure our sector has the talent and skills it needs for the future. And enable our industry to remain one of the most competitive financial centres in the world. 

Our membership accounts for one third of the FS industry. And I am delighted to see many of our members in the room today.

So why are skills important and what can we do about it?

As you have all heard from David just now, the industry is tackling multiple challenges post pandemic alongside rising inflation, the growth of digitisation coupled with emerging technological trends.

The last 2 years has seen the sector completely transform how it serves its customer base - driven by consumer demand for online, flexibility and convenience. Some people say we achieved 5 years of tech change in 5 weeks.  I moved house last year and through the process, I didn't have any in-person interaction with my lender, not face to face, on the phone or on video call.  All interactions with my lender were conducted via a virtual platform. This is in stark contrast to my experience just 19 years ago, when I was sat in my local high street face to face with my mortgage lender when purchasing my first property. I am still not sure which option I prefer. But either way, the skills needed to process my mortgage today significantly differ from the skills required to complete the paper-based process I encountered in 2003.

This example illustrates the changes facing the entire industry.  Technological disruption and digitisation are forcing change at an ever-increasing rate and skills must keep pace with this.  A report by the House of Commons identified that nearly 30% of the UK's financial services workforce - over 200,000 employees - are a risk of displacement.  However, the remaining 70% are not immune.  All jobs in the sector will require new skills as tasks are automated and business functions reshaped. 

We also need to consider the demographic changes at play here. Increases in life expectancy and retirement age are changing not only the mortgage market, but also who is in the workforce and how they want to work.  Andy Haldane recently emphasised how skills drive productivity and profitability at a roundtable we held with PWC and industry leaders.  In the last two years we have seen the trend for ever increasing numbers in the workforce go into reverse.  Older workers are leaving the workforce and migration trends mean further pressure on labour supply.  With a tight labour market, we cannot rely on recruitment alone to address the skills challenges.

So, how do we ensure that employees have the necessary skills and expertise to handle my mortgage requirements now and in the future, against the backdrop of hybrid working, tech and digital transformation?

If we look forward to 2030, 80% of the people who will work in the sector are already employed and have left full time education.  Our sector needs to regularly and continually upskill existing staff to meet emerging skills gaps and to prepare them for roles that may not exist for another few years.

However, our track record on training is poor.  Financial services has one of the lowest levels of investment in training of any sector, spending around third of the amount per trainee that construction spends.  We are also a heavily regulated sector, so around half of training that is provided is on regulatory or compliance matters, leaving even less time for new skills that are so critical.

The business case is clear.  Our research shows over a four-year period a company with 30,000 employees could potentially save between £75 million and £115 million by upskilling current employees rather than pursuing a redundancy and rehire option. Many firms have reskilling programmes underway and are reaping the rewards.

We all have a collective responsibility to ensure our people have the right skills to perform their roles effectively. We can agree the case for reskilling is compelling but how do determine what skills are needed at what time?

Working with NatWest and EY we have produced a Future Skills Framework - published last year and endorsed by the CIPD.  The Framework is an online architecture providing organisations with a uniform set of 8 essential industry skills and behaviours including cyber security, adaptability and relationship management for individuals currently working in, or aspiring to work in, financial services. Our Framework enables businesses to prioritise their investment in skills.

Just as the industry continues to evolve, we are not standing still.  In two weeks, we will publish the latest set of skills and behaviours the industry has identified as business critical for the future.  We are also undertaking work to understand how ESG is impacting on skills required in the sector.

Whilst our focus is on reskilling the existing 1million people working in the sector today, attracting talent into the industry and retaining the talent we have is also part of the picture.

I am the careers lead governor at a local secondary school and when I speak to students, very few identify financial services as a future career.  However, I am not sure many of us in this room would have identified the job we are doing today as our aspiration whilst at school.  However, the students do talk about wanting to work with people, helping people, solving the big problems facing the world today and working for a responsible employer.  These are all things that financial services has a positive message on, but our image as a heavily regulated, complex sector where you have to be good at maths to get a job does not attract people to financial services.  Working with our member firms we are emphasising the skills that people need to work in financial services - empathy for example - and helping to reshape the messaging about our sector.

Retaining staff is also important.  Data on diversity and inclusion in financial services makes uncomfortable reading - echoed in AMI research published last year on the mortgage industry.  Our work aligns with the recommendations in this report.  Last year we published an inclusion measurement guide supported by the regulator which enables organisations to gain deeper insight into how inclusive their working culture really is.  Research published in partnership with the Financial Services Culture Board 3 weeks ago, shows whilst a majority of employees are positive about their managers efforts to promote an inclusive culture at work not all employees feel the same.  There are important findings around stereotyping, fear of speaking up, fairness of progression, reward and workload.  Managers and firms need to pay attention to these areas otherwise they risk losing staff. 

I will mention another M word today. No not mortgages, but the menopause. We need to break this taboo.  The menopause is one of the factors impacting the female talent pipeline in financial services.  We published research last year with Standard Chartered Bank and the Fawcett Society, which showed a culture of silence around menopause is blocking female career progression and talent retention. We found that one quarter who are currently experiencing the menopause said it made them more likely to leave the workforce. This means the sector could lose 29,000 women.  We cannot afford to lose this talent.  I know UK Finance is supportive of this initiative and many firms are taking action to support employees with menopause transition. 

Many of you in this room are already on your skills journey, but there is still more to be done. I would like to ask you to think about three questions when you leave today:

  • how can your business build its investment in skills,
  • how can you lead your team to improve its skillset, and
  • what areas can you as an individual upskill in?

All of the skills challenges and work I have spoken about are directly linked to ensuring the UK remains one of the most globally competitive financial centres in the world. We have our work cut out for us but through collective action, we take the necessary steps together.

Thank you all for having me today.

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