In a world of automation, what does the future hold for UK financial services workers?

Published On : 10/26/2021

By James McLeod, VP EMEA, Faethm AI

The UK has a rich history when it comes to financial services (pun intended). From the issuance of the first ever British banknotes by goldsmiths back in the 17th century, to the present day where the UK sits atop the pile as the largest exporter of financial services in the world, we have clearly come a long way. Employees in the financial services (FS) sector account for a huge portion of the UK’s economy, and occupy a huge range of roles that help people and organisations make, invest and manage money;whether they’re exchanging currency and stocks, granting loans to small businesses, or providing insurance cover.

As a nation, we’ve long been one of the leading innovators globally when it comes to finance technology, and this dominance looks set to continue thanks to the recent development of and investment in pioneering, industry-disrupting technology. The fintech era has arrived in big fashion, with online-first banks like Monzo and Revolut rapidly gaining market presence. As cryptocurrencies work their way into the mainstream too, it’s clear that technology’s influence on the industry is only growing.

Yet despite this, there remains a sense of apprehension from FS workers in relation to the rise of one specific technology: automation. In many instances automation technology is already capable of undertaking significant portions of financial services workers’ roles, because it can quickly and efficiently handle repetitive, process-heavy (and often administrative) tasks that humans often struggle with at a much faster rate. In productivity terms this is great news, but the trade-off presented is that the development of such tech threatens to displace a number of employees in the near future. In the short term it could lead to an unemployment crisis, and in the long term in could also create a huge gap between the skillsets demanded of human workers by employers and the actual skills possessed by prospective employees, which is a concern.

The pressures of technology

This apprehension amongst workers in the FS sector, including insurance, is understandable, as this sense of pressure on their roles is underpinned by data. Our research indicates that a huge 20.8% of all roles in FS/insurance in the UK are potentially automatable before 2026, whilst 13.6% could potentially be augmented by automation and technology over the same period. Whilst potential doesn’t always necessarily equate to actualisation, these figures still raise alarm bells for those working in a sector that has persistently turned to technology to drive productivity and growth.

In fact, we’re already seeing this adoption of automation technology come to fruition in some financial organisations, such as the FSCS. It recently made the decision to begin implementing AI and automation to reduce the time spent on claims handling, a lengthy process that tech can handle far more swiftly and effectively than humans. The results were impressive, with the body reducing the costs associated with claims handling by £9m as a direct result of the use of automating technology.

It’s a scenario that reflects a common reality – that organisations have to take decisions that make the most business sense. The question however is how they account for the possible human cost of such decisions.

Finding a solution for employees through planning

Whilst the current situation may have FS and insurance workers ruminating over a dystopian, sci-fi-esque ‘technology takeover’, we must remember that the human touch will be just as important as technology to both industries in the future. Firms such as EY for example are encouraging an approach of “intelligent automation”, combining the strengths of Robotic Process Automation (RPA) and AI with innately human capabilities such as creativity, problem solving and strategic planning. For all that automation technology can offer it’s these skills through which true innovation flows, and it’s fundamentally important that employees in FS are encouraged and given the means to remain and work alongside technology, rather than be replaced by it.

The main question right now is, does the industry have the skills pipeline and the innovation mindset needed to fully embrace this transition? With the battle for talent in finance and the UK in general heating up, a concerted investment into reskilling and retraining the workforce is imperative if employees in the industry are to retain employability.

This investment should be focused around workforce planning and skill development, with a dedicated strategy that fully equips FS firms to deal with anticipated future demand for skills, and proactively identifies and develops talent to fulfil the associated roles, an urgent priority. Data analysis should form a key part of this strategy, so businesses have insight into what skills their employees are lacking when compared with the skillsets that are set to be in-demand in future. That way, they are empowered to draw up and implement a strategic and informed programme which helps employees reskill in the competencies needed for those roles, ensuring they have a consistent pool of appropriate talent as their technology adoption increases.

The UK’s FS sector has been defined by a number of different eras, and the current technology boom and the rise of automation is the latest of many. But one thing that will always remain is the importance of employees in upholding the industry, pursuing innovation and providing that human touch that technology simply cannot replace. The onus lies with businesses to take action – they have the tools at their disposal to ensure a technology takeover remains the stuff of fiction, so now’s the time to start building a workforce where humans and automation work side by side rather than at the expense of one another.

Jessica Weisman-Pitts

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.