Banks need human upgrade to remain competitive — study

FOR ALL THE reorganizations the financial services industry has undertaken in recent years, it won’t achieve long-term success unless it dramatically changes the way new managers are hired, consulting firm Oliver Wyman said in a report.

In a survey on the state of finance released on Tuesday, Oliver Wyman found that a “gnawing sense of concern” was afflicting the industry even though it enjoyed a strong 2017.

“Much of the regulation has been absorbed, global prospects are better, valuations have improved, and interest rates have begun to turn,” according to the report. “We don’t encounter a celebratory mood, however, in conversations with bankers and insurers around the world.”

Oliver Wyman researchers found that growth in the financial services industry significantly lagged global technology firms, which have done a better job in meeting customer demand. The industry also fell behind its historic performance. In addition, the long- standing models that once supported profits and returns in banking and insurance have also deteriorated, the report said.

Financial firms still had time to “bridge the customer value gap” and fend off “tech usurpers,” according to Oliver Wyman. The key: bringing men and women with deeper backgrounds in science, technology, engineering, art and math.

Organizations will have to adopt “a dramatically different human capital model, fully integrated business experts with a new set of skills, and spearheaded by business-building, entrepreneurial leaders,” it concluded.

The survey included input from 4,000 customers from the US, UK, France and Australia, and a digital focus group of 100 mass-market customers in the US. — Bloomberg