Training Could Be a Nice Problem to Have, But it Still Needs Solving

As the UK comes out of recession, the financial services industry is proving to be one of the main beneficiaries. You don’t have to believe me though. Take a look at the last few quarterly CBI Financial Services Surveys and see for yourself.

It’s not been plain sailing all the way, but the general picture across all sectors of the industry over the short to medium term is pretty bright.

For example, in the last survey, taken until the end of June 2014, optimism remains strong in the banking, general insurance, securities and investment management sectors. In each of these, the focus is on increasing business volumes, whilst at the same time maintaining and steadily increasing profitability. And even in those sectors which appear to have had a more difficult quarter, such as life insurance and finance houses, key indicators, such as business written, are expected to bounce back.

So, what does all this mean in practice?

Taken at first glance, it looks as if everything is coming up roses and we can all sit back and enjoy the ride. But every silver lining has its clouds, even in our industry.

It’s when you dig a little deeper into the surveys, and in particular, the supplementary questions that firms are asked, that you get a picture of the fears the lurk behind the outward success. Let me take a look at some of these and what they mean in practice.


Whenever an industry thrives, you always get the situation where newcomers want a piece of the action. And that appears to be the case here. Certain sectors, for example, general insurance, are particularly concerned about new entrants posing a threat; businesses that don’t currently operate in financial services.  

So, what is the key challenge that competition brings? Anyone coming into the insurance market is going to need competent, experienced staff to help start up their operations in a market where skills are perceived to be in short supply (more on that later). So staff retention gets brought into sharp focus.

In this situation, you could argue that there’s no point training employees if they’re going to take their skills elsewhere. But actually the reverse is true. A well-coordinated and planned training programme can be an aid to retention if it’s structured in the right way. And after all, how is a firm expected to fight off competition if its staff aren’t operating to the best of their abilities?

Labour Supply

People talk about skills shortages a lot, in many different industries. But in financial services, enough firms now believe this is a real issue that needs to be tackled head on.

Generally, this isn’t a problem if a business has enough people to run its operations in their current state. But when strong business growth is on the cards, this is often accompanied by the need to grow headcount – sometimes quickly. At the moment, this appears to be the case for both the insurance broker sector and for securities traders in particular, as they see their business volumes rise confidently.

But how do you recruit extra numbers when there aren’t that many people out there to choose from who have the necessary skills? You could poach them from other firms but everyone will be trying that one. So if you can’t do that, the alternative is to take on people who have what it takes to succeed, and then train them up.

Often, time is not on the firm’s side as it needs employees to be “skilled up” quickly, so there’s pressure to get this right. That way, the business can position itself confidently for growth, whilst at the same time making sure it doesn’t get any unnecessary attention from the regulators.


This had to come in eventually. But I’m not going to state the obvious about greater levels of intrusion from regulators, and having the staff to deal with that. Many firms state that they’re planning to invest further in their sales, distribution and marketing functions, all of which are key risk areas from a regulatory perspective. Also, the investment management sector in particular appears to keenly appreciate the need to stay compliant, with investment set to increase to ensure this risk is mitigated.

This all leads to a greater demand for compliance staff, and again, if these can’t be sourced from the pool of experienced people, then once more, training takes centre stage. Regulation does appear from the survey responses, to be seen as a major constraining factor on expansion. In which case, firms need compliance staff who are able to steer them through the regulatory minefield, whilst allowing the business to grow and for profits to still be made. That’s a particular blend of skills which firms either have to acquire or develop internally.

Back to the Problem

So why do I say training is a nice problem to have? Because in periods of business growth, firms are more willing to invest across a number of areas, including infrastructure, product development, and of course, people. Budgets become a little easier to secure and business cases easier to make. But firms still need to keep operating costs under control, as evidenced by the latest survey. The risk is that training programmes don’t deliver value for money and don’t get right to the heart of individual needs. And as you can see above, if this isn’t managed properly, training can become a constraint on future growth.

The Solution – Or the First Part of It

One of the major obstacles to overcome has always been not knowing what programmes of study or training resources are available. Thankfully, this is now a lot easier, partly due to new training providers, more qualifications being available, and more ways to learn than before, thanks to developments in technology.

So, whatever you need to do to solve this problem, make life easier for yourself by starting here.


Martyn Oughton    

By Martyn Oughton a Professional Member of the International Compliance Association (ICA).  Martyn now writes a regular blog for Industry Events Online focusing on the importance of training in all aspects of compliance. Read Martyn's other publications at Martyn's Writers' Residence website.

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