Transforming the Wealth Operations Workforce for the Future

Financial Services is big business with over 2.5 million people in the UK working in financial and related professional services in 2023 which accounts for 7.5% of total UK employment.¹

To continue to be a major player in the future we look at the wealth industry from the perspective of firms and their operations function at a human level, how it services customers’ needs and what it must do to future proof. As technology and consumer behaviour continue to advance, firms and their employees must adapt to meet these changing demands.

We look at critical areas where the wealth industry can align its operations workforce to ensure future success.

1. Embrace and innovate technology to take it from disruption to enabling solutions
2. Fostering a best-in-class Employee Experience with the right culture, and attracting the right talent
3. Meeting evolving consumer demands, elevating customer journeys to holistic financial well-being
4. Build an agile operations function that is flexible and resilient in an ever-evolving landscape

From disruption to enabling.

As Europe’s leading fintech ecosystem, the UK is looking to grow into a global leader of the digital economy by digitalising financial market infrastructure and operations. To achieve this, it needs to balance support for new technologies with protection of the UK’s globally recognised regulatory and legal frameworks.

Increased consumer demand for digital services has given rise to technological advancements with the industry undergoing massive digital disruption with digital platforms, apps, e-commerce and digital trade becoming the norm.  Driven by the digital transformation, the fastest declining jobs are administrative, clerical and data entry roles and the most in demand are tech jobs roles such as Data Analysts and Scientists, Big Data Specialists, and Business Intelligence Analysts with Financial Services expecting high growth in these roles, predicted at 31% from 2023 to 2027.²

Reliance on artificial intelligence (AI) to automate back-end operations such as administrative tasks and data processing alleviates pressure put on employees to complete straight forward day-to-day tasks. Whilst AI will speed up journeys and reduce the need for people to do basic tasks, it does not mean AI will replace the workforce but support people to deal with complex queries and to oversee critical situations.

In the wealth industry we have seen how consumer data can show disproportionate spending on gambling sites, speech analytics can flag irate customers that may lead to a possible complaint, or alert to language of any mentions of domestic abuse. Humans will still be needed to intervene and interact with the customer with compassion, empathy and emotional intelligence.

Technological innovation is here, and the focus will be on how humans decide to use that technology. The wealth operations workforce will need to transform to be able to create, innovate and use these tools to meet evolving customer needs. Firms needs to identify and install the talent needed to fully exploit digital transformation.

Right Culture. Right Talent.

2.5 million people in the UK work in the financial sector with over 1.1 million in financial services (FS) and 1.3 million in related professional services sector producing 12% of total economic output.³ With low unemployment and changes to the way people work, competition for skills and talent is high. Financial services has the second highest density of skills gaps reported with the highest increase from 2% in 2017 to 7.7% in 2022.⁴

The highest internal skills gap reported shows technical and practical skills at 70% according to financial services employers, with lack of ‘specialist skills or knowledge’ and ‘solving complex problems’ being common. The softer less tangible skills categorised as people and personal skills, showed that staff lacked ‘self-management skills’. This includes ‘time management and task prioritisation’ skills combined with the ability to ‘manage one’s own feelings and handle the feelings of others’.⁵

The current redundancy and re-hire approach that some firms adopt is a costly one and focus on reskilling and training is a step towards lessening the skills gap and reducing costs of buying in skills. Employee training has been seen as a low priority for companies in the UK compared to other markets according to The City of London & HM Treasury’s State of the sector: annual review of UK financial services 2023.⁶  The wealth industry has acknowledged this is a gap but time will tell on how this will be addressed.

Our sector is more exposed to AI than any other sector with early career employees with higher levels of qualifications, are typically in occupations more exposed to AI.⁷ Combined with the current trajectory of an aging population with increased life expectancy leading to the extension of working lives. The generational divide poses several challenges for firms that they must address. This includes how they train and reskill in the right areas. Older workers will need to maintain and/or update their technical skills, and the younger generation, the digital natives, will need to develop social and emotional intelligence (EQ) skills.

Training and reskilling is only part of the Employee Experience (EX). Wealth firms have a multitude of challenges to attract and retain talent. With the rise of Gen Z, employers are re-examining and rethinking compensation, flexibility and company culture. Traditionally organisations use external rewards to motivate, most notably pay and reward, but also prestige and status to attract talent. This is changing and it is no coincidence that all the companies in Glassdoor’s Best places to work 2024 have a purpose-driven culture at the top, with reviews heavily citing ‘work-life balance’, ‘strong culture and values’ and ‘flexible environment’ attributing to high scores.⁸ There is also evidence that Gen X, millennials and Gen Z want ‘gradually decreasing hours’ as the most desired way of retiring. They want to fit work into their lives, rather than their life into their work and some may not be able to afford to retire at traditional retirement ages.⁹

There are some areas of disconnect between employer priorities and what employees want. Organisations have prioritised health benefits, mental health support and inclusion and diversity. Whereas employees place higher priority on long term financial security, career development and flexible working.¹⁰

Wealth firms will need to attract the right talent. A workforce that can meet changing technological advancements and have the skills to meet the relationship needs of customers. They also need to retain employees by meeting their needs and nurturing an environment and culture they want to be a part of.

From customer journeys to holistic financial well-being

Consumers now expect integrated services and are diversifying their financial services relationships seeking convenience, trust and seamless interactions across their providers. Modern customers are not satisfied with basic applications or on-call support as customer preferences for all industries, FS included make it clear that ‘target audiences expect services to be tailored to their needs’.

Demand for technological change within the sector is also driven by the digital skills of consumers. Many, if not most of the operational processes in wealth are not seen by consumers but can be felt if their customer journey isn’t a seamless one, regardless of the mechanisms of their interactions be it digital, manual, online or ‘in person’. Consumers’ relationships with their wealth providers are becoming increasingly impersonal and even as digital channels function correctly, they are emotionally devoid. Simplify Consulting’s own research shows that there is clearly still a market for human interaction and a clear majority of people demanding 24/7 services.¹¹

The wealth industry must strengthen customer connections with life-centric solutions and better engagement to turn transactional relationships into genuine human connections. Wealth operations can use technology and AI to understand customer’s circumstances and motivation. Humans can leverage that knowledge, connect with customers to enable advice that’s relevant, solve specific and complicated problems and offer holistic services.

Building a resilient business.

Business agility is key in wealth operations. Often referred to as the ‘engine room’, operations are crucial to all businesses, and arguably more so when the product is a financial one, ranging in complexity, governed by risk and regulation and carries the economic fortunes of all those it touches.

There are distinct characteristics of wealth operations that makes it stand out;

• Interchangeable products and the use of technology to digitally transport and reconstitute those products
• High volumes of customers and transactions with diverse customers across the spectrum of circumstances, needs and demographic
• Long term contractual relationships between customers and firms
• Customer’s sense of well-being is closely intertwined with its offerings
• Use of intermediaries and not solely direct-to-consumer offerings

Oiling the operations machine and to service these distinct differences, are the people. They work to keep the vast quantities of data, money and products flowing through the millions of transactions processed every day to serve the demands of millions of customers.

The wealth industry must balance investing and implementing technology to streamline and enhance efficiency and deliver superior customer experiences, cultivate a workforce culture to attract and retain top talent by providing opportunities for skills development and career growth and respond to market dynamics and regulatory requirements.

What sets wealth operations apart is both its super-power and its kryptonite.

Summary

The wealth industry has the opportunity to make a huge difference to customers and their lives by making the right decisions along the way. As technology and consumer behaviour evolves, so must the firms and their people evolve to meet those demands.  Acceleration in digital transformation and converting customer insight into innovative solutions is as much about people, culture and organisational design as it is about systems and technology.

Can wealth operations meet their obligations, move with technology, motivate their workforce and satisfy their customers? And at what cost?

..