A financial professional will be a buzz of information

Luxembourg For Finance (LFF), the Market Development Agency, notes that the transformation of the financial sector is accelerating. a study It was published in collaboration with Mckinsey on October 20. While financial services were until recently capped at 20-year lifecycles, they now tend to shorten to 18- to 36-month cycles. Driven largely by innovation and technology, this transformation has a direct impact on the talent sought in the financial sector.

According to the LFF, automation is emerging as a key driver of change and therefore expects job losses in some areas. “Highly skilled personnel with the ability to work closely with technology or develop and implement automation technologies will be in high demand,” the study said. Thus, financial professionals spend about half of their time collecting and processing data. As technology advances, it is expected to help increase the volume and improve the quality of these activities.

Taking the example of mortgage applications, LFF explains that it is a process that can be “heavily” automated. “Automation can dramatically increase mortgage processing speed while reducing default risk and eliminating processing inconsistencies,” as well as “increasing customer satisfaction through instant pre-approval.” In this way, automation frees up time for high-value-added tasks such as advising customers, handling unusual requests, or handling exceptions. Many tasks require both experience and human judgment.

All segments are concerned

The rise of automation doesn’t mean bankers can do without acquiring data management skills. The expected skills will be even higher and more demanding. In this regard, LFF is determined: “Serving clients in this new data-driven environment will require the bankers of the future to become increasingly technologically savvy, knowing how to model rich data sets.” For this, the banker of the future will have to adopt artificial intelligence (AI) and machine learning techniques to, for example, predict market movements or even identify client risk profiles.

Apart from the banking sector, all financial services are witnessing automation-driven transformation. The wealth management segment, for its part, notes a shift in its business toward a “remote economy,” particularly due to its “increasing reliance” on digital channels and the establishment of omnichannel services.

On the asset management side, “the power of data and the emergence of new technologies are fundamentally changing investment identification, portfolio management, allocation and client interactions,” LFF emphasizes. In this sense, quantitative analysts with advanced training in statistics and mathematics will be in great demand in the labor market.

Old and new professions

Insurance companies are no exception to this trend. Insurtech, the emergence of a la carte auto insurance models, blockchain-based insurance solutions, and the development of cyber insurance offerings that must take into account data protection requirements are signs that the insurance industry is already on the train of digital transformation.

In addition, traditional professions such as legal and regulatory compliance functions are also undergoing metamorphosis. As financial services processes become digitized, corporate lawyers and compliance officers have no choice but to base part of their analysis on data mining. This development is even leading to the roles of data protection officer (DPRO) or IT compliance officer. And not surprisingly, emerging professions, e.g ESG analysis rolesOf course, they have data management as their core business.

Ultimately, all these developments in the financial services profession favor professionals who can add value to their employers in complex matters that require human judgment and expertise. Given the talent shortage currently affecting the financial sector, both in Luxembourg and internationally, these ongoing developments highlight the need to adapt academic training to new labor market demands. And regardless, if these changes are related to the increasing importance of data, they are still necessary strengthens the level of maturity financial institutions in this field.

This article is from the Paperjam + Delano Finance newsletter, a weekly meeting to follow financial news in Luxembourg. You can subscribe by visiting this link.

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