After 68 days of hearings, 134 witnesses and countless hours of media debate and articles about the likely outcomes, the Banking Royal Commission was released on February 4th, leaving the vexed question of “what next?”
For all the debate surrounding the key topics examined as part of this process, including; mortgage broker commissions, the enforcement of criminal charges for executives of organisations guilty of misconduct, transparency of information and accountability of both customers and organisations and the impact of the conflict between duty and financial interest, one point seems to be irrefutable: the broader financial services landscape in Australia will be challenged ongoing as a result of the Royal Commission.
With regards to talent, we’ve witnessed a surge in Risk and Compliance job adverts in the last year (this is on top of strong rises in preceding years). Job adverts in other disciplines have seen marked drops as a result of the need for organisations to reallocate resources to appropriately manage regulatory response. Seek.com noted a 13% increase in candidate searches containing the criteria “compliance” and “risk”, however, significant shortages in filling roles in these spaces were recorded across Sydney, Brisbane, Perth and Melbourne, suggesting a skills and/or knowledge gap is present between those hiring for the roles and those interested in moving into the discipline. Seek also quoted a 17% rise in advertisements Jan-Oct 2018, in technology roles with a specific focus on compliance, conduct or risk, responsible for the bulk of this rise.
When examining the existing workforce within Financial Services, there have been calls to base recruitment and promotions more on adaptability and morality, as opposed to traditional technical skills and qualifications. With the banking and broader financial services sectors employing over 450,000 people, at a total cost of around $70b, the commission insisted that organisations must develop new systems in identifying staff attributes that would help repair tarnished reputations. These traits were identified as being; wisdom, courage, adaptability, morality and resilience. What financial and productivity impacts this will have on a sector that already solidly relies on costly psychometric and personality profiling modules, remains to be seen.
While there was an emphasis on analytics as a skill set before the commission, there will now be an even greater fight for talent in this domain where the larger financial services players seek to get a better handle on customer, risk and efficiency data.
The struggle for data science experience will be fought by the blue-chip tech titans, as well as, a raft of new, emerging Fin-techs who are now looking to secure a share of the Australian retail, business and superannuation markets.
While those weary of the complex maze of products and service offerings that the financial services market has become might welcome the arrival of the findings, and look forward to seeing what action is taken in the imminent election, it seems clear that it wont be a quick transition from agitation to virtuous. It’ll be the effectiveness of the tactical and operational transformation within our financial services providers that determine the success and speed of this journey, and, at the heart of this journey will be the organisation’s people.
At a top level, it seems Risk, Compliance and Technology are the “buzz” disciplines that will headline the shift in industry reputation. Titles aside though, it’ll no doubt be those who are adaptable, noble and empathetic to the customer, that will standout most as the industry labours forward.
If you're interested in exploring opportunities within the Financial Services sector, please contact Corey Babich for a confidential discussion.
