Business First Issue2 Vol5 CH3:Layout 1 23/10/2009 15:57 Page 22
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Ulster Business School
Your financial services
industry needs you!
by Claire McCann, lecturer in Finance, and course director of the BSc (Hons)
Financial Services, at the Ulster Business School
T
he events of recent times challenges to face and improvements to be made which
have gone a long way to surely can only bring benefits for the industry. Richard
breaking down the Saunders, Chief Executive of the IMA, has spelled out how
common perception of the financial services industry as the FSA’s Retail Distribution Review promises to reshape the
being conservative and not creative, or even innovative. regulatory landscape, and how the Treasury has reformed
Amid these turbulent times the pictures usually conjured up tax considerations in relation to investment funds. These
- of the traditional bank manager sitting behind a desk ready reforms are creating new product opportunities and
to say no to every request, or of saving for that long away facilitating innovation in the industry.
day of retirement – have been dispelled, and much has In addition, the 2009 Walker Review of corporate
been done to affirm the idea that the financial services governance in the financial services sector proposes
industry is not to be trusted. tougher regulation, and makes 39 recommendations on the
Over many years we have witnessed scandals and improvement of corporate governance in financial services
debacles, from the mis-selling of pensions and endowment firms. These recommendations include ensuring that the
mortgages, to fraud, to the sub-prime crisis and the credit non-executive directors of boards in such firms have a good
crunch. Moneywise reported recently that it is felt by the knowledge and understanding of the business, and that the
Financial Services Authority (FSA) that, in the short-term, the board has the relevant experience to allow it to run
current turbulence has encouraged the public to become effectively.
more aware and involved in their use of financial services, The emphasis these recommendations place on skills and
but in the long term it is likely to lead to disengagement experience highlights the fact that the sector will need to be
from and distrust of the industry. more stringent in its expectations of its employees in these
The financial services industry and the FSA will have to regards.
work hard to overcome this lack of trust. The FSA’s Financial One of the attractions of the UK financial services industry
Risk Outlook report (2009) advises that ‘rebuilding consumer is its highly skilled workforce. And, in the future of the
confidence and trust in financial services will require industry, its skills will become increasingly important as the
concerted action from firms, regulators and the sector seeks a way to increase trust. Many new employment
government’. opportunities will be created in an industry that will be
The public’s confidence in the industry must be improved reshaped, dealing with increased regulation, and driven to
as a strong, reformed financial services sector is essential to cultivate innovation and secure a way forward in the global
UK recovery in this recession. Trust is a necessity for the economy.
sector to work at its optimal best, and public trust is at a low. Northern Ireland is well placed to deal with this new
So what form might this ‘concerted action’ take?
environment. On offer is a location that allows entry to the
financial services centres of both the UK and Ireland, along
In a recent report to HM Treasury on the future of UK
with Europe, on a reasonable cost basis. Add to this a
international financial services, it is suggested that one
talented, young workforce, the support of InvestNI, the
strand in improving trust will be to ‘reaffirm the UK’s
Financial Services Skills Council, as well as the Department
reputation for competence, responsibility and
for Employment and Learning Northern Ireland’s Financial
trustworthiness’, and it is widely accepted that regulation
Services Future Skills Action Group, and Northern Ireland is a
must be improved.
good prospect.
Also in this report, UK financial services leaders suggest
Ongoing collaboration between the sector’s professional
that the foundations of past successes and cross border
bodies, such as the Securities and Investment Institute and
investment in the sector must be maintained. Regulation,
the Chartered Insurance Institute, and Northern Ireland’s
tax, skills and an innovative environment are identified as
Higher Education, chiefly the University of Ulster, should
core success factors in reinforcing the UK as an important
mean the skills and qualifications on offer in the country
financial services environment.
continue to respond to the industry’s needs.
The Investment Management Association (IMA), in their
This will increase the attraction of its workforce further. If
seventh annual survey of their member firms, agrees with
Northern Ireland keeps pushing forward, gaining inward
this view - although the industry has gone through a
investment, it should be in a strong position to take
difficult time, the UK remains an attractive location.
advantage of all the opportunities available in the future UK
Nonetheless, the recent period has shown that there are still
financial services industry.
22
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