financial services at a turning point: what trends are shaping the future of the sector?

June 18, 2015

As an advisor to leading institutions in the banking, capital markets and insurance industries, Nol van Vliet, Global Director of Randstad’s Financial Services, discusses:

  • what trends are impacting the financial services sector;
  • why the sector should reinvent the way they engage customers;
  • why HR leaders should rethink the set of skills and competencies business needs to stay competitive;
  • and most importantly, how to put all of it into practice.

from your perspective, what’s the #1 trend that’s shaping the financial services sector?

Overall, the financial services sector is now ready to pick up pace in pursuit of growth. We’re seeing a lot of interesting things across all segments of the industry globally. But I think the rise of financial technology (FinTech) entrants who are eager to provide financial services is the #1 trend impacting the industry, and should be closely watched in the coming years. For example, social media giant Facebook is in the process of obtaining an e-money license so they can operate online banking and money-sending services worldwide. Last time I checked this social network passed 1.3bn monthly active users. I personally find it hard to imagine what’s not possible when you own such a vast trove of user data. Similar trends can also been seen in China, where internet companies like Tencent and Alibaba are racing to turn their sites into mobile payment platforms. These are just a few of the companies that are redefining what a financial services provider looks like.

should the financial services sector worry about this trend?

Due to high costs and stringent regulations, “outsiders” will find it incredibly difficult to make inroads into financial institutions’ turf, and I think tech enterprises like Google actually have little interest in doing this. Through offering financial services, FinTech companies’ strategy is to introduce themselves into the commercial lives of their users and capitalize on purchase behavior insight. In other words, they don’t need to be banks to win over customers from traditional financial institutions. Many bank executives I’ve spoken to say that their biggest competition in the coming years will be from the likes of Google, Facebook, and Amazon instead of other institutions.

how is the sector responding to the increasing competition from FinTech companies?

Recognizing the changing face of today’s customers, some financial companies are embracing digital transformation – closing down branches, introducing mobile banking, and leveraging social media – in an effort to attract younger customers. However, that’s just the tip of the iceberg. A paradigm shift is underway to evolve financial institutions from “product-driven” to “customer-centric”. The bar keeps on rising. Seamless integration, ease of use, 24/7 accessibility, personalization, are just a few of the things customers expect from service providers nowadays. In short, traditional financial institutions need to develop a deeper, holistic understanding of their customers and improve their value propositions.

what implications does this trend have for talent acquisition?

In the past a lot of focus was placed on competencies that help companies manage assets, such as quantitative skills to handle number crunching and financial modeling. To drive exceptional customer experience, the financial services sector needs an injection of people with a strong customer-centric mindset. We’ve noted an increasing demand for candidates who are able to quickly develop a great sense of what customers are really thinking and experiencing, and anticipate their needs instead of bombard them with product offerings.

When it comes to customer-centric skills and competencies, industries like hospitality and retail whose business heavily relies on delivering exceptional customer experiences have a much higher concentration of service-minded profiles. To acquire the new set of skills and competencies the financial services sector needs, I suggest HR looks beyond the sector and taps into talented candidates from different industries and backgrounds.

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