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AGILE RECRUITMENT IN THE FINANCIAL SERVICES SECTOR

Alistair Collier, Regional Director at Sanderson

 

In many sectors, a combination of technology and changing social expectations has now enabled agile working practices to become standard. It seems that the financial services sector has been somewhat slow on the uptake, however, with just a third (36%) of businesses in the industry offering flexible working. At the same time, competition for skills is heating-up, from both other sectors and from fintech start-ups that have been founded with flexibility in their DNA.

In recent years there has been a cultural shift away from pay being the main driver of job choice to a more holistic view; the full package, including working environment and work life balance now drives applicants’ career decisions. So much so that that one in four UK professionals have quit roles to find greater flexibility. We have increasingly found that candidates are not interested in even tentatively applying for roles with companies that are not offering an agile approach – it is now a ‘must have’, rather than a ‘nice to have’.

For those financial services businesses that have successfully developed a flexible working culture, the issue they often face is actively communicating their values and working practices in such a way that engages prospective candidates. In a candidate-short market, businesses that can showcase modern ways of working through their recruitment process are most likely to attract and retain the best talent.

 

Candidate comms

Finding the right balance might not be as distant a reality as perceived though. This is where recruiters can add real value – acting as an advocate for companies by articulating their values and demonstrating flexible working propositions through the recruitment process itself. There are several ways to do this effectively, from using websites and social media as a shop window into life at the firm, to more elaborate events targeting prospective candidates.

For example, if a financial services company is struggling to attract millennial professionals due to an inaccurate or outdated perception of ‘corporate’ culture, hosting events which give people a chance to see their office space and culture could be the perfect remedy. This is a tactic that has worked well for technology firms and fintechs – there’s no reason such networking events wouldn’t have a similar impact in other areas of the financial services sector without appearing to be pushing for a hard sell.

 

Thinking outside the box

Communication alone isn’t enough to solve the issue – greater agility within the recruitment process itself is vital. This has benefits for panels as well as candidates. It’s common for key stakeholders in financial services companies to be dispersed across the UK or even internationally, so time spent physically working in the same place can be at a premium. Recruiters that understand such complexities will adapt the process, making best use of technology so time isn’t wasted.

A streamlined interview process can be introduced which suits the needs of the company while highlighting flexible working processes to candidates. It may seem daunting at first, but one of the first habits to break might be the idea that all interviews need to take place face-to-face. Recruiters can develop a shortlist of candidates, then record interviews using previously agreed questions before sharing with key stakeholders to review remotely. This replaces the traditional first-round of interviews. This would be followed by a benchmarked competency test – only a candidate which passes both of these elements would be put forward for a face-to-face interview, significantly streamlining the process and making it much more agile and cost-efficient for time-poor financial services executives.

In order for this to be effective, a trust-based partnership needs to be developed which allows recruiters to gain an in-depth understanding a business’ values and proposition. This will ensure that recruiters with outsourced responsibility can act as an extension of the business, knowing intrinsically what to look for in a candidate.

 

Focus on candidate experience

Getting it right can not only save the company time and money but also to enhance their reputation. If the candidate experience is fluid, positive and informed but isn’t successful, they are likely to form a positive perception of the business regardless. The result could be them applying again in future but also sharing their experience with their peers, which in turn increases awareness of the brand and its values, all while helping to steal a march on the competition.

Conversely, getting the process wrong can be extremely damaging to both a business’ reputation and finances – the Recruitment & Employment Confederation estimates the cost of a bad hire at middle-management level is more than £132,000.

The UK’s financial services market is a key element of the country’s economic growth and the reputation of the businesses within the sector is central to its success. It’s therefore vital that companies ensure their recruitment processes and external communication highlight the agility and flexible working practices at the heart of their businesses. With this in place, the sector will continue going from strength to strength.

 

Finance

‘MOVE FAST BUT DON’T BREAK THINGS’ – WHY FINTECHS WILL COME TO LOVE REGULATION

move fast

Alex Johnson, Director of Portfolio Marketing, FICO

 

The guiding ethos of fintech is move fast and break things. It’s the fundamental advantage that disruptors have over the incumbents they’re disrupting — the ability to move quickly and make mistakes, learn from them and deliver innovative services to customers. Generally, this ethos is presented as a virtue. Banking is ‘broken’ so any investments in improving it are both notable and noble – even if there are bumps along the way.

Conversely, anything that stands in the way of this ‘march of progress’ is generally cast as a villain.

The most prominent villain for fintech companies is regulation. From their perspective, it’s a competitive moat, based on rules written for a different century, that protects banks’ ability to make money without needing to innovate and offer more or improved services to their customers.

So, it’s easy to see why a fintech company — believing fully in the virtue of its mission and faced with a litany of illogical and intractable regulations — might just say ‘we’re doing it anyway.’ That’s what Robinhood co-founder Baiju Bhatt reportedly did when his company tried to roll out a checking and savings product that it claimed was insured without confirming that with regulators first.

The problem is that while we may mythologise the ‘move fast and break things’ ethos in the abstract, consumers don’t love it when their stuff breaks in the real world.

And when fintechs and challenger banks aren’t constrained by regulation (as they mostly are in the U.S and Europe) the harm caused by this ‘move fast and break things’ approach can be much more severe than a service outage or a false claim of deposit insurance.

 

Stories from overseas

In China, online P2P lending exploded in popularity, with the number of P2P lenders growing from 50 in 2011 to 3,500 in 2015. Then the whole industry imploded when it was revealed that 40% of P2P lending platforms were Ponzi schemes.

In India, online lending companies raised a record $909 million in venture capital last year (the third-biggest market behind the U.S. and China). And those lenders are now using personal data from borrowers’ mobile phones to make lending decisions – which although illegal, is reportedly ignored by Indian regulators.

In the Philippines (another emerging market where venture capital dollars for online lending are pouring in), the National Privacy Commission is investigating hundreds of complaints from consumers about lending apps leveraging their personal data to shame them into making their payments.

 

A prediction for the decade to come

In the 2020s, I believe fintech companies will come to love – or at least quietly appreciate – regulation for two primary reasons:

 

Brand protection

Fintechs and challenger banks understand that brand recognition and affinity is key to their long-term success. Building their brands will be a challenge. A recent survey of 2,000 Brits found 40% don’t trust challenger banks at all and 67% said they are more likely to do business with banks that have branches on the high street. As Zach Bruhnke, co-founder and CEO of U.S. challenger bank HMBradley recently said, ‘We’re going to have to grow by word-of-mouth and doing the right things for our customers.’

Fintechs and challenger banks focused on the long-term task of building brand affinity and trust will, over the next decade, come to despise bad actors that skirt the rules and dress up get-rich-quick schemes in the same language they use to describe their own firms. Regulations that constrain and/or shut down these bad actors will be increasingly appreciated by legitimate market participants.

 

Disruption-friendly regulations 

In the 2010s, we saw the beginning of a trend that will strengthen in the 2020s — regulations designed to foster competition between incumbents and new market entrants. To date, such regulatory action has run the gamut, from vague (innovation sandboxes and special-use charters) to hyper-specific (U.S. regulators’ cautiously approving the use of alternative data, or the Bank of England considering giving non-banks access to its 500-billion-pound balance sheet). Perhaps, most promising, has been the work done by the Competition and Markets Authority (CMA), which has been proactively driving the adoption of rules and standards around Open Banking for past couple of years. O

ver the next decade, through careful management of public perception and increased investment in lobbying, fintechs and challenger banks will further reshape the regulatory environment from a competitive moat to a more level playing field.

 

Reaching fintech maturity

’As a licensed broker-dealer, we’re highly regulated and take clear communication very seriously. We plan to work closely with regulators as we prepare to launch our cash management program’.

This was the statement issued by the chastened co-founders of Robinhood shortly after they backed away from their plan to launch a checking and savings product without government insurance. And here’s the crazy part — that’s exactly what happened! Less than a year later the company announced a new deposit product, this time insured by the Federal Deposit Insurance Corporation (FDIC).

As fintech companies mature in the 2020s and the focus of their strategic objectives shifts from growth to profitability, regulation will play a vital role in transforming the ethos of those companies into something a bit more sustainable. Call it ‘Move fast, but don’t break things’.

 

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Finance

HOW TO MERGE YOUR FINANCES AS A COUPLE?

Finances

By Nelisiwe Ndlovu, Certified Financial Planner at Alexander Forbes

 

There is never a good time to discuss finances with your partner, married or unmarried, and one key issue that needs to be discussed is whether you should merge your finances.

Joining all your money matters can seem overwhelming at first, so you don’t have to combine every bank account and credit card from the get-go.

 

Start by having an honest discussion with regards to your individual money management and financial commitments before deciding to merge or co-manage your household finances while deciding if you want to fully merge all your finances. Detail all individual income, expenses, and all your financial commitments. The best way to achieve this would be to first take your individual budgets and combine them. This will tell you what you can and cannot afford as a couple. If one partner does not usually budget, this is a chance to start doing so as this will ensure that your household finances are under control.

 

Nelisiwe Ndlovu

Before you think about merging your finances, be open and honest about:

  • How much you earn – what is the income that you will bring home? What is the frequency of your income? Are you permanently employed or a contractor?
  • What are your current individual expenses and financial commitments? List your assets and your current debt.
  • Your individual financial goals and money management techniques – don’t worry if you might have not figured this out at the time of merging your finances – the important thing to do is to be open and honest so that you both build a stronger money foundation
  • Disclose your financial obligations, this becomes very tricky if left until too late and may cause unnecessary tension in the relationship
  • What are your goals as a couple – what is the purpose for merging your finances?

Married couples can formally or informally merge their finances as detailed above where household expenses are split between the couple (the split could be 50/50 or any fair split agreed upon by the couple, which could be based percentage-wise depending on one’s income). Some couples tackle finances by adopting the ‘pick a bill’ approach, where one couple pays the water and electricity while the other covers the food.

Being married does not mean necessarily that you need to have one joint account. You may also just want to open one joint account where you each deposit money to pay just your monthly household expenses.

 

The top five things to remember when merging finances as a couple:

 

  • Have the ability to manage your own finances before expecting another person to merge their finances with you.
  • Be mindful of your potential spouse/life partner’s money management behaviour and skills so that there are certain things you can address together before considering merging your finances
  • Always keep an open line of communication – honesty is the best policy
  • Set a money limit which you can each spend without having to consult each other
  • Don’t forget to change your wills and beneficiaries on pension or provident funds as required.

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