From a pandemic that shut down trade for nearly two years to talks of a looming recession ready for rollout in 2023, the financial services industry is intensifying with challenges that will test companies on varying levels from the services provided to technological innovations utilized. But the biggest issue concerning financial firms for years to come? The talent shortage of qualified professionals such as financial analysts and client managers.
Regardless of how financial organizations improve their products and services, human assets will be a critical investment for the coming year so they can stay on top of competitors, remain relevant among rising fintech firms and drive innovation. So how exactly does a financial services industry prepare for this? Let’s discuss the best moves for bridging the skills gap within the financial industry including:
- Diversifying and Expanding Talent Options
- Reskilling and Upskilling Financial Services
- Embracing and Adapting Technology
- Enabling Learning Teams to Take Action
1. Diversifying and Expanding Talent Options
We’re probably preaching to the boardroom here, but it’s no secret that to be successful in the world of finance, professionals need to be comfortable understanding complex fiscal topics and investment types. Veteran employees are more than likely to have specific licenses depending on their specialty. For example, Certified Financial Planners normally hold several licenses from FINRA, while insurance brokers may be required to acquire specific licenses depending on their scope and location served.
In the past two years, banks and investment firms have lost talent to companies in the big-tech and fintech spaces where their skills have been more sought after in a rapidly changing financial landscape. With traditional finance companies hemorrhaging talent due the great resignation, financial firms should see the predicament as an opportunity in reassessing their recruiting process.
As noted by the Harvard Business Review, broadening the scope of talent when hiring has become more of an accepted hiring trend as opposed to something taboo. HR teams should not place financial acumen as a top skill for new recruits, but they should search based on other soft skills that are much needed in the diversifying world of finance. Companies in the financial sector can draw talent from professionals from different educational and work backgrounds as well as junior or senior-level employees that have worked in an entirely different industry. The goal of breaking away from the standard recruiting model is that it allows organizations to get a fresh perspective on how the company can improve on all levels, from how management is run to how services can be better sold to their prospective clientele.
2. Reskilling and Upskilling
With the popularity of retail investing and mobile investment apps available at anyone’s fingertips, providing financial knowledge that is accurate and of value will be paramount for professionals at all levels. Now more than ever, training managers will play a more pivotal role in keeping their teams sharp on the industry’s key topics as noted in studies by both PwC and McKinsey. Pertinent subjects to be discussed in the financial services’ continuing education will range from maintaining job knowledge proficiency to leveling up to understanding critical topics emerging in the digital space.
With new technologies come new problems. FINRA and the Financial Services Skills Commission (FSSC) have both noted that reskilling will play an important role with new financial technologies and are expecting firms to have more emphasis on financial professionals having a base level of digital literacy in addition to knowledge of anti-money laundering, issues in senior investing, insider trading, and cybersecurity. Nonetheless, financial firms are expected to invest more in qualified trainers despite an instructor shortage to equip their team with the knowledge to operate tech stacks built for a new generation of investors.
Lastly, firms should seek additional training courses in soft skills including behavioral awareness, critical thinking, as well as mentoring and coaching. Emphasis on investing and technology skills may be key to the job but the reliance on skills in human interaction will be just as paramount as the ones listed above. Adding more of the “human element” to the investing professional’s skill set will start developing empathy and consideration for both clients and colleagues. The nurturing and practicing of soft skills within firms will lead to more collaboration, open discussion on strategy, better client communication, and even develop more leaders internally—with or without an MBA.
As we move into the new year, firms are expected to have their teams not only develop an iceberg-deep level of financial knowledge but a whole new skill set that wasn’t on the training officer’s radar ten years prior. As a result, L&D teams of financial firms and training companies will expect to have more specialized instructors and courses within their Training Management System to manage a comprehensive program.
3. Embracing and Adapting Technology
Economists are well acquainted with the parable of the luddites where cotton mill workers in the 19th century destroyed the machinery that was aimed at replacing them. In the same sense, emerging technologies have been seen as a potential replacement for investment analysts and even bankers and insurance brokers. With artificial intelligence and robotic processes taking control over daily duties and investment strategies, the line between tool and employee is slowly becoming grayer than ever before.
While AI may have a more pronounced role in leading investment strategy and customer decisions, that doesn’t mean that financial analysts and brokers have to take the backseat entirely. In conjunction with upskilling, firms must also broaden the expertise of their team so they can better understand how the technology they’re using will more efficiently serve their needs as well as their clients. In a sense, employees need to think like mini-product managers as they ask questions on how their platforms and tools powered by AI and robotic processes can continually improve customer experience and in turn loyalty to their financial advisors. Given the expansion of finance teams across the globe, companies must not only prepare to integrate new tech stacks in their processes but also adapt their training protocols to schedule training courses for both continued education and onboarding for the new financial tools of the trade.
4. Enabling Learning Teams to Take Action
Whether it’s organizing one informational session or planning a series of training seminars, providing quality learning to financial employees is a lot easier said than done. Employee pushback and managerial red tape have usually found themselves to be the culprit in preventing any kind of employee training program to take full effect. Between stymied employees and disgruntled managers who don’t see continued training providing an ROI, preventing this all too common scenario lies in upper management giving their training department (internal or external) full control in developing the training program to achieve its full potential.
Second, C-suite executives must equip their training administrators with the right tools to provide in detail how the training program will be planned and executed. The most seasoned training professionals in the financial industry are familiar with utilizing a Training Resource Management System (TRMS) to map out course schedules with the right instructors. But planning for continued education in the financial industry in 2023 is a different beast that’s neither a bear nor a bull.
2023 will place employees as the primary investment for financial firms. Yes, even more than the next big stock. The reason? Filling the financial talent gap will require training experts to be more precise than ever in providing extensive research to personalize employee training that delivers results to management from the bottom up. Instructors and training managers will need to map out training that addresses two challenges. One is the training to match new strategies used by fintech firms and their competitors and the other is training that fulfills the employee’s valuation in the company and growth as a professional.
When employees feel that the training mandated by their company is reciprocal—that is the training provided will be beneficial to them in their role currently and in the future—it creates more incentive for employees to continue to learn (and grow) with their company. Via a TRMS that can show a positive correlation between the upskilling/reskilling, training budget and employee performance in training, learning experts can better prove to management teams the benefits of a robust training program are nothing but compounding.
With 2023 just starting, the financial industry will need to foster an all-inclusive approach toward addressing the talent shortage and skills gaps faced in investing, banking and insurance. However like a bull amidst bears in a recession, financial firms shouldn’t view this dilemma as a challenge but more so as an opportunity to revamp their training protocol to be better prepared for the future of finance. Companies will soon realize by adapting to more robust training programs that they will not only be setting their employees up for continued success, but their new operations as well.
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