Finance Minister Rachel Reeves is set to announce the city’s new ‘skills deal’, with companies including Barclays and Lloyds pledging to reskill thousands of financial sector workers for the AI revolution.
The Financial Services Skills Deal is expected to be announced on Tuesday in what is likely to be Mr Reeves’ last Mansion House address to city leaders before Andy Burnham is expected to take over as Number 10. The government-backed initiative promises to help employers improve the skills of their workers and “keep abreast” of significant technological changes that have raised concerns of mass layoffs.
In the coming weeks, around 20 early signatories, including the London Stock Exchange, Nationwide Building Society and asset manager Fidelity, will begin drafting a rolling three-year plan aimed at training and certifying UK employees in up to five key skills, including AI. These skills are considered essential to securing future jobs.
Their progress is then reported annually to the Treasury and the Financial Services Skills Board, with at least one senior executive from each company overseeing the internal program.
The deal aims to help the UK’s lucrative financial sector, which is a key part of the government’s industrial strategy, remain competitive amid rapid developments in key technologies that could otherwise threaten large swaths of the financial and professional services workforce.
The UK’s financial and related professional services industry accounts for around 11% of gross economic product and employs around 2.5 million people, according to industry body TheCityUK.
Clare Tanley, who helped spearhead the compact as chief executive of the Financial Services Skills Board, said it was the most notable sector-wide skills strategy to be rolled out since the construction industry set up training boards in the 1960s. “It’s very important,” she said. “I don’t think we’ve seen anything like this in a generation.”
Tanley said that while the skills gap is not a new problem for the city, “what is different is the scale and speed of change we are seeing.[erative] love. This poses many challenges for employers. ”
The boom in AI is raising concerns about the job security of city employees, particularly back-office staff whose jobs AI platforms say can be automated, such as processing and monitoring.
A study published last year by Wall Street bank Morgan Stanley estimated that AI could put more than 200,000 banking jobs in Europe at risk by 2030, representing about 10% of banking roles across the continent. Standard Chartered caused a stir in May when it announced 7,000 job cuts due in part to AI, prompting an apology from its boss Bill Winters, who described the move as “in some cases the replacement of low-value human capital”.
Standard Chartered is one of the founding signatories of the scheme, alongside Yorkshire Building Society, London insurance and reinsurance market Lloyds and online bank Zopa.
Only UK-based workers are covered by this commitment.
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While some of the AI-related job losses may eventually be offset by the Skills Compact, Tanley said that’s not the main reason companies are focusing on government-backed programs.
“We need capabilities, and if we don’t build them, we hinder innovation, growth, and competitiveness…And we’ve proven that investing in upskilling our existing workforce is the fastest and most efficient way to get the skills we need.”
Each signatory will begin collecting data for the first reporting deadline in November, at which time they will also confirm which key skills they will start tracking and upskilling their entire workforce. At least one of these skills must be AI, and employees must be trained through specialized courses, qualifications, certificates, or digital learning. All training must be conducted during working hours and companies cannot train graduates or apprentices.
The current 17 signatories of the agreement cover about 500,000 city employees, and Tanley hopes the entire city will follow suit. “Whether we like it or not, this is where the economy is heading,” she said.
