It is hard to escape the conclusion that the past year has not been good for retail banking and financial services. The sector seemed to hurtle from one crisis to the next, with the Libor-fixing debacle and well-publicised money-laundering scandals landing some of the major players with hefty fines. On top of this, uncertainty continues to surround the future of the banking landscape given the likelihood that retail banking will be ‘ring-fenced’ from investment banking under proposals outlined in the 2011 Vickers Report.
Last year the retail banks embarked on large-scale organisational redesigns with a focus on cutting costs. This restricted their hiring in many functions since managers were unable to get headcount approval where there was uncertainty as to whether a position would survive restructuring. It also meant that when managers did recruit, they tended to turn to temporary rather than permanent resource. But some good opportunities did exist in certain functions such as procurement, where IT category managers were hired with a remit to make substantial savings.
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Compliance with regulation is a priority for the retail banking industry and banks have grown their compliance divisions to meet the requirements of the Financial Services Authority. This year banks are bracing themselves for the FSA to split into two organisations – the Prudential Regulation Authority and the Financial Conduct Authority. Going forward, banks will have to report to the two separate entities so demand for compliance professionals is set to intensify.
The upheaval in retail banking has inevitably created capability gaps and going forward banks face significant succession and retention risks. For the remainder of 2013, they will increasingly be focused on effective talent management and will hire HR business partners to support them with this.