Key facts
- Chancellor Rachel Reeves is launching a City "skills compact" to commit financial firms to retraining staff.
- The initiative requires employers to improve workers' skills to adapt to technological changes, particularly AI.
- Nearly 20 initial signatories, including major banks and asset managers, will develop three-year training plans.
- Training will focus on critical skills, with AI being a mandatory component for upskilling UK staff.
- The program aims to ensure the UK's financial sector remains competitive and addresses fears of AI-driven job losses.
Chancellor Rachel Reeves is set to announce a new "skills compact" for the financial sector, aiming to commit firms to retrain thousands of employees in areas like artificial intelligence. This initiative is designed to help the UK's financial services industry, a significant contributor to the national economy, remain competitive amidst rapid technological advancements that raise concerns about potential job losses.
The compact, to be launched on Tuesday, will see nearly 20 initial signatories, including major banks like Barclays and Lloyds, the London Stock Exchange, and asset manager Fidelity, pledge to develop rolling three-year plans. These plans will focus on training and certifying UK staff in up to five critical skills deemed essential for future job security, with AI being a mandatory component. Progress will be reported annually to the Treasury and the Financial Services Skills Commission, with senior executives overseeing internal programs.
Clare Tunley, CEO of the Financial Services and Skills Commission, described the compact as a significant sector-wide skills strategy, unprecedented in a generation. She highlighted that while skills gaps are not new, the current challenges are amplified by the scale and speed of change driven by generative AI, which threatens roles in processing and oversight.
Research from Morgan Stanley estimated that AI could put over 200,000 European banking jobs at risk by 2030. Standard Chartered, a founding signatory of the compact, recently announced 7,000 job cuts, partly attributed to AI. Despite potential job displacement, Tunley emphasized that the primary goal of the compact is to build necessary capabilities within the existing workforce, which is seen as the fastest and most efficient way to meet skill demands and drive innovation and growth.
Signatories are expected to begin data gathering for their first report in November. The training must occur during working hours, and graduates or apprentices will not count towards the firms' training targets. The current 17 signatories represent about half a million City workers, with hopes to expand participation across the entire sector.