No, this isn’t a call to arms, comrades.
Ignoring the controversy surrounding his choice of words, the deputy governor of the Bank of England thinks that the UK economy is “past its peak and no longer so potent”. He compares the current slowdown in growth to the post-steam, pre-electricity dip experienced towards the end of the 19th century, arguing that the productivity gains the UK has seen from the digital revolution are waning, awaiting the next big breakthrough; perhaps the fourth industrial revolution.
ONS figures certainly back up his assertion that productivity – the amount of wealth produced by each worker – is not rising, with a 0.5% fall recorded in Q1 2018 and the rise in Q4 2017 put down to a dip in hours worked rather than an increase in output. Economists are divided on the cause, but politicians and business leaders agree that a solution must be found.
In much the same way that the industrial revolutions of the 18th and 19th centuries saw a significant shift in the employment market, tomorrow’s technological advances are expected to have a similar effect. The retail impact is already becoming apparent; we’re now used to scanning our own shopping in the supermarket or ordering it online. Fast food fans will be aware that your Big Mac involves an interaction with a touch screen rather than a McJobber. Contact centres are expected to be next, with a recent report forecasting 32,000 jobs will be shed across the UK by 2021 as a result of automated digital channels and the usage of self-service.
Investment within the financial services sector since the crisis of 2008 has been largely driven by regulation. Retail Distribution Review, Client Assets regime review, EMIR, MiFID2, PSD2, Solvency II, GDPR; the list goes on seemingly endlessly, each requiring significant investment (an estimated €2.5bn for MiFID2 alone). But as we emerge from almost a decade of regulatory change, will the next stage of investment drive automation, and what could that mean for career prospects?
Consumers almost certainly will shape this decision. In a world used to access “now” – whether it’s shopping on Amazon, watching boxsets on Netflix or reading breaking news on Twitter – there is an increased demand for instant access to financial information. But, as robo-advisor Nutmeg recently acknowledged, clients “want to speak to a human” when it comes to dealing with their financial security.
As with other technological revolutions, rather than spawning mass-unemployment, expect a shift in roles to those that add additional value to the client journey. The complexity of Financial Services, and the absence of any significant curricular financial education in the UK, mean that demand for advice and guidance – whether individual or generic - will remain for the foreseeable future. In terms of longevity of career, employees need to ensure they continue to develop their industry and vocational skills to stay relevant in a changing landscape. Personal development has never been so important.
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