Historically, the financial services (FS) sector has been one of the biggest users of interim and other short term resources. A number of City institutions have long retained an element of non-permanent resource within their overall headcount to allow them to respond more efficiently to the changing nature of the business challenges they face – and no environment has been more challenging than right now. The aftermath of the spectacular failures in the sector that have deepened the global recession has increased demand for interim managers in finance. The demand is on for interim managers in finance with quite specific skill areas and this demand shows few signs of abating. What are some of the factors increasing this demand?
Why Are Interim Managers in Financial Services So Important?
The burden of regulation has increased significantly since 2008, not only in terms of content but also in terms of regulator scrutiny. The pure volume of new legislation and compliance measures introduced across both banking and insurance has left many institutions struggling to keep up. Interim managers in finance are being brought in to lead or support the programmes that will enable them to transition effectively to the regulatory regimes.
Responding to the explosion in claims for Payment Protection Insurance (PPI) miss-selling has seen a large number of lending institution assemble significant teams of multi-level interims and contractors to work almost on a case by case basis either to accept or defend the claims. This has required programme and process specialists rather than large numbers of people with subject matter for expertise. In contrast, defending against claims relating to alleged interest rate derivative miss-selling for which banks are already building up contingent resources are likely to require deep subject matter expertise as well as strong process and programme management skills.
Separation & Integration
Banks, building societies and insurers are changing shape rapidly. Whether it is through mergers and acquisitions, anti-competition driven sell offs, rebranding or the prospect of separation of retail and investment banking arms, this complex change management arena is also demanding of the sorts of expertise and skill sets unlikely to be deeply embedded in an organisation and will undoubtedly create further opportunities for interim managers in finance.
Aside from their own internal struggles and changes, many high street banks now have to deal with the emergence of new challengers - some of the big retailers, Metro Bank, Virgin Money and a larger Co-op, who bring a different set of brand values to the market and collectively if not individually could be seen as a threat to the main institutions. This development requires a fresh approach to competition inside the FS sector as the new players are growing fast, encouraging an already familiar public towards their trusted brand – and trust is perhaps the biggest advantage of all.
So, while there is an unimaginable amount of heat in the financial services sector, especially in the areas mentioned, the market for interim managers in finance remains well placed to help provide both the capability and capacity to support a difficult transition for the industry. Better processes and practices do have their place, but better people – whether permanent or interim – will be a key success factor for financial services in 2013.