Financial Services
Graduates 'Banking' on a Career
When is a bank not a bank? The answer is
easy: when it is a financial services provider!
 The
last ten to fifteen years have seen major upheavals in the
financial services sector, particularly retail financial services.
The major 'banks' in the UK for example have been facing fierce
competition from building societies that have converted from
mutual status to public limited companies, and from insurance
companies, supermarkets and other 'financial services providers'
that have begun to offer 'banking services'. At the same time,
'banks' have started to offer a wider range of services than
those traditionally associated with the sector. Many have
dropped the word 'bank' from the title.
Another critical issue is that of increasing regulation.
The Bank of England's role as regulator for banking services
has passed to the Financial Services Authority, a newly formed
body that also takes responsibility for regulating retail
investment business, such as the sale of pensions and insurance,
investment management, and trading in stocks and shares. Areas
currently unregulated - mortgages, for example - are unlikely
to remain so for long.
Technology has had a major impact on the world of financial
services, just as on other areas. 'Plastic cards', with all
their convenience to customers, have superseded cheques in
many instances; the growth of ATMs (automated teller machines
or 'cash-points'), 'call centres' offering telephone banking
24 hours a day, 365 days a year, and 'PC' or internet banking,
has reduced the need for customers to come into branches when
they can undertake transactions like paying bills or checking
balances themselves. Effectively, banks have 'outsourced'
many of their traditional functions - to the customer! The
increasing automation of the old 'banking' functions has also
led to greater levels of specialisation within banks.
The last ten years have also seen a radical shift in staffing
patterns. One impact of the accelerating use of technology
has been the 'downsizing' of staff in the UK banks, whilst
increasing focus on customer service in the face of competition
from new players has seen a move to critical or part-time
workers.
The picture in developed countries is very similar to that
in the UK: with the launch of the Euro, the problems of converting
currency within the member States will vanish, with benefits
to trade. Developing countries and those changing over to
market economies will undoubtedly follow similar patterns,
in order to ensure that they have a financial services industry
robust enough to be able to meet the demands of the next millennium.
.
So where does this leave the graduate seeking employment
within the retail financial services industry? Certainly not
at a disadvantage! The industry, particularly in the UK, has
to a great extent dispensed with 'tiered' recruitment for
its potential management staff. There is a greater emphasis
on recruiting graduates or short-term contract staff.
Training and development policies within organisations have
one thing in common: they are all focused on the bottom line.
One of the key qualities sought by recruiters, in this fluid
and swiftly changing industry, is the ability to cope with
and manage that change. Recruits are also generally put through
an induction programme - a mix of formal and on-the-job training.
Many companies also have special programmes for the 'high-flyers'
destined to become the senior management of the future.
But increasingly, staff are responsible for managing their
own career - the old 'job for life' of the traditional bank
is long since dead. The upside of this change, however, is
empowerment; bargaining power for bright recruits who demand
the highest quality development, and a wealth of opportunities
for focused graduates to move around within or without financial
services, taking a 'portfolio' approach to managing their
careers.
There is a wide range of qualifications and training opportunities
available to help staff do this. One of the leading providers
of financial services education, in both the UK and overseas,
is the ifs School of Finance, which develops and
delivers a range of qualifications. These
qualifications include a Diploma in Financial Services Management,
and a BSc (Hons) in Financial Services and Associateship awarded
jointly by the Institute and UMIST (the University of Manchester
Institute of Science and Technology). These qualifications
give students a broad understanding of the financial services
industry, and management topics such as marketing, accountancy,
information systems and management, whilst also offering electives
that allow specialisation.
Holders of post-graduate qualifications in the UK are generally
treated in the same way as first degree holders. However,
the situation is likely to be different in other countries,
where greater emphasis may be placed on higher degrees.
The wider issue is: what challenges face the financial services
industry in the next millennium? Competition, both on the
national and international fronts, will no doubt result in
more mergers and take-overs. Increased regulation in order
to protect the consumer and the industry will be a necessity.
The European Union has already chosen Frankfurt, Germany as
its financial centre and as the EU increases its membership
over the coming years, the Euro will be on a par with the
US dollar as a benchmark currency.
Technology has already placed its indelible mark on financial
services. Cheques are likely to become a thing of the past,
together with individual currencies. SMART cards, the Internet,
credit and debit cards, and home shopping all contribute to
a 'cash-less' society - the convenience of being able to have
your money on a plastic card in your wallet or purse is now
a reality.
Graduates able to thrive on this diet of intensive change
will find a career in retail financial services both challenging
and rewarding.
Author:
Rachel Gosling, ifs School of Finance
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