3 essential skills financial services leaders need to stay ahead

25 Nov 2021

3 essential skills financial services leaders need to stay ahead

Financial services continues to contend with exceptional levels of uncertainty, disruption, and change.

Both intrinsic and extrinsic forces are affecting talent supply, productivity, and competitiveness. And most importantly, skills gaps are emerging on the board, in the executive committee, and at the level below. For financial services organisations, understanding these gaps is likely to mean the difference between success and failure. It is because of this that Odgers Berndtson and the Financial Services Skills Commission decided to survey 80 leaders from across the financial services ecosystem. Their insights have helped us to identify skills gaps and suggest ways to address them.

These have all been included in the 'Staying ahead in a changing world: the skills leaders in financial services need' report. Targeting three peer groups: board, CEO and executive committee, and emerging leaders, the report details both the technical and human skills gaps across all three levels of leadership in financial services.

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Staying ahead in a changing world: the skills leaders in financial services need

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While the report reveals distinct nuances for each peer group, there are a number of big-ticket items that span every level of the leadership spectrum. A keen absence of digital acumen and the ability to make informed decisions based on data was felt by all respondents. Likewise, they all saw a gap of understanding in both environmental, social, and corporate governance (ESG), and specifically in equality, diversity, and inclusion (ED&I).

And, they believed a new style of leadership – centred on empathy and inclusivity – had emerged, calling time on a more directional approach.

Individually, each group had its own unique concerns surrounding skills gaps. Board directors cited a shortage of governance, risk, and regulatory expertise, linked to the number of first time NEDs joining boards. Board members also viewed the lack of diversity in revenue generating roles as a critical risk. In this regard, they lamented the comparatively small pool of creative people in a sector overflowing with numbers-oriented professionals.

The executive committee members we spoke to were concerned about technology-specific skills, pointing to the demand for leaders with AI, cybersecurity, and data analytics expertise. In particular, the ability to sift through volumes of data and pull out actionable insights was considered to be in short-supply, particularly in established incumbent businesses. A lack of basic management skills – exacerbated by lockdowns – was also a cause for concern among this peer group.

Emerging leaders – typically one or two levels below the executive committee level – focused on the shortage of ESG expertise and the impact this would have on front-line customer service. They also had strong views about the characteristics of a good leader, arguing that ‘conscious inclusivity’ was now a must have skill for commercial success.

What’s more, many argued that leaders who were more personable, empathetic, and informal were needed to build cultures where people could truly ‘be themselves’.

In addition to identifying the skills gaps, the report details how financial services leaders believe they can be addressed. Measures include novel approaches to training, increasing efforts to recruit new skills from outside the industry, and significant restructuring and reskilling efforts. Collaboration as a means of upskilling was a recurring theme among all peer groups, particularly when it came to ESG and ED&I deficiencies.

When it came to creating more values and purpose-based leadership, hiring based on breadth of experience and potential at senior levels rather than deep specialism, was seen as a necessity in today’s hybrid working world.

While financial services companies can go to great lengths in bridging skills gaps, they also need to be companies that great leaders want to work at. Based on the responses from all participants, the way to achieve this appears to be by focusing on a clear articulation of purpose. Financial services businesses are uniquely placed to help people and solve many of society’s problems. Embedding this narrative into the very fabric of a company’s culture and employee value proposition is how many leaders in the sector believe they can attract the best talent.

The full report provides an extensive breakdown of these skills gaps and our recommendations on how they can be approached.

For more information, please contact Anne Murphy, Head of the Financial Services Practice.