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Financial Services: Make or break?

By Sally Tarbit 25 Jan 2010.
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What’s really going on inside the financial services industry? It's weathering some of the toughest challenges it's seen in years, but will that be its making – or its breaking? We spoke to some friends of The Team who are right in the thick of it, and asked them their views on our ‘Big 5’.

1. What’s been the biggest business challenge over the last 12 months?

For many, it's simply surviving. Some significant mergers and acquisitions, such as Lloyds and Halifax, have meant a long tail on the true impact of these changes, with job losses and ‘rationalisation’ still hitting the headlines.  For others, it's been how to read a complex market. Emma Mallinder heads up marketing at one of the UK’s largest global asset managers: ‘For me, it was knowing which way to jump. We all knew that a recovery was on the way, but where, when and how were the immediate questions. It felt like there was profit to be made, but no one knew where it would be found. It was like the crowd dispersed and no one knew which way to go’.

2. Are we through the toughest period?

The sense is that ‘yes, we are through the worst.....probably’. There is a definite optimism with generous bonuses being paid out in some quarters, the media reporting that the economy is strengthening and a good level of spend on the high street, but there is still a cautious undercurrent to any real recovery. Going forward, how this tempers attitude to risk or how confident financial institutions want to be seen (through brand or advertising) remains to be seen.

3. Are employees engaged, motivated and loyal?

Based on ‘City Boy’, Geraint Anderson’s infamous column, money sits at the heart of how satisfied employees are with their lot, right? Not so for everyone. There are a vast spectrum of people working in the financial services industry who are not all high rollers, where a bonus is only part of the story. For many middle managers, who’s rewards have previously constituted shares, they are – in some cases – sitting on Portfolios worth a fraction of their original value. But with the sector shrinking in terms of the amount of available jobs, where do they go and is there anything that can be done to make them feel motivated, engaged and happier with their lot? The Internal Communications Director at one of the Uk’s biggest banks summarises the challenge in a nutshell: ‘We cant change what has happened, but we’ll reward where and when we can and communicate to employees in an open and honest way. Then its up to them to decide. There will always be ups and downs in this market which is why its crucial to be consistent with our behaviour and communication and do our best to help everyone look to the future’.

4. What are the guiding principles for maintaining customer satisfaction and loyalty?

Customers are cautious and many unsure where to turn or who to trust, with stalwarts of the market no longer delivering what could once be expected. The sound advice from those in the driving seat: ‘maintain a steady ship – with no surprises and as much reassurance as we can give them’. Not necessarily that exciting for those working within the industry, but very necessary for consumers and clients.
 
5. What’s the future for financial services?

Emma adds: ‘We’re suddenly talking about risk management processes, which would have been unheard of before the crisis. Transparency, honesty and consistency will also be crucial.’ So with fingers burnt, it’ll be interesting to see how the financial services industry responds.  Will the situation be regarded as an inconvenience with added process curbing entrepreneurialism or conversely, does this create an opportunity for some inspirational solutions that could herald a new financial dawn? Only time will tell – but I’m remaining optimistic.