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Top 10 challenges for investment banks in 2016: The workforce of the future

Beat Monnerat, Senior Managing Director of Financial Services for Asia-Pacific, Accenture | Dec. 11, 2015
For the eighth consecutive year, Accenture outlines 10 of the key challenges facing investment banks. Here's the first challenge.

Read: Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7Part 8 | Part 9 | Part 10

Beat Monnerat, Accenture
Photo: Beat Monnerat

The types of people banks need to hire in the future are changing. In the search for differentiation and a drive to digitise the industry's value chain, the nature of banks' work is changing — along with the skills required to deliver those services.

For example, the traders of tomorrow will be responsible for supervising largely automated trading activity, overseeing asset liability management and maintaining client relationships. As self-service trading continues to grow in popularity, the need for specialised traders is expected to decline. Equity traders will need to become proficient in dealing with related derivatives, and those trading corporate bonds will require expertise in municipal bonds.

Significant change is expected in technology workforces too. As the lines between IT and the front office blur, the front office will need to develop skills in analytics, machine learning, electronic trading and alternative messaging protocols.

Meanwhile, the number of commodity IT roles will decline in favour of cloud computing, but new IT roles will emerge in service integration, and cloud and client relationship management — roles where softer skills and the quality of personal interaction will be considered more important. At the same time, banks must determine how to deal with legacy technology that is still mission critical — a problem complicated by the fact that legacy technologists are retiring and being replaced by millennials who have a different technology literacy.

As with other industries, most banks are currently relying on an ageing workforce that will need to be replaced with millennials whose early career goals often do not align with the business models of banks. Accenture research shows that among MBA graduates from two top U.S. business schools — the University of Pennsylvania and Columbia University (both of which have historically had a strong finance focus)—investment banking as a career choice fell by nearly 50 percent between 2008 and 2014. During that same period, the percentage of MBA graduates who chose careers in the technology industry tripled.

Today, between 60 and 65 percent of employees are older than 40, with millennials accounting for a majority of the remainder. In three to five years, those percentages will flip. To retain knowledge walking out the door, banks should be digitising training programs. To attract and retain millennials who are drawn to small, agile companies, work will have to be organised into bite-size projects with multiple internal clients, since millennials want a variety of professional experiences early in their careers. That means, banks will need to offer young professionals a career network rather than a career ladder.

 

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