It’s a good time to be considering a move into financial services consulting. The recent boom in the sector looks set to continue and the demand for the right talent and experience is high.
Last year, members of the Management Consultancies Association earned £1.4 billion in fee income from the sector, up 50%, from £912m, on the year before. The boom so far has been strongest in banking and insurance; work from the banking sector grew 65% on 2004 and within the insurance sector by 35%.
This activity is down to changes in the way the insurers sell their products, changes in the pensions business, the recent frenzy of mergers and acquisitions, the imposition of a raft of new compliance regulations and the continued march of outsourcing.
The boom isn’t over yet, according to Andrew Power, financial services partner at Deloitte. “There are tremendous opportunities out there,” he says. “Any time you get change in a sector, it tends to be good for consultants and advisory companies, because clients are not working with the norm.”
As the insurance business evolves, those able to help insurers manage the changes happening in the sector’s distribution channels — away from sales through brokers and towards sales online and through supermarkets — are also in demand, he says.
The scramble to implement new regulations is creating, and will continue to create, opportunities for those with the right experience and skills to prosper in consulting, according to Geoff Booth, financial services practice director for Parson Consulting.
New governance regulations continue to create work and opportunities for newcomers to consulting in the financial services sector. “There’s a high demand for people and skills in this area,” says Booth. “Delivering the compliance calculations for these has been tougher, and has taken longer, than expected, so there’s still demand here for quantitative skills and statistical modelling, as well as IT and system skills around data integration, collection and management.”
Once these schemes have been set up, there will also be a demand for consultants able to create efficient ways to manage compliance (those, for example, with solid budgeting and forecasting experience) and consultants able to identify new business opportunities arising from all the data gathered as a result of the new regulations.
“There’s scope for people who can get extra value from compliance, people who can help a business gain competitive advantage, for example by using the data gathered to create a more sophisticated approach to credit modelling,” says Booth.
The evolution of outsourcing is another trend offering opportunities across the financial services sector to consultancies and those able to offer them the right mix of skills and experience, he says.
The sector is moving beyond the outsourcing of functions such as call centres into a more ambitious phase, says Booth. “Today, companies are more comfortable outsourcing more complex areas of their finance functions, such as the consolidation of large shared service centres to create economies of scale.
“There’s demand for business folk with IT awareness who can provide the bridge between business and IT project management, people who can do process mapping, advise on how to site and deploy shared service centres, or advise on IT system selection and implementation.”
While technical, sector-specific knowledge can be important, having skills that apply across a range of businesses and the right personal attributes for consultancy is also important, says Power.
“If you only understand one technical issue, you’re not likely to offer enough to us. We tend not to hire people with very narrow and very deep experience.”
The emphasis on exactly how much specific financial services sector experience consultancies look for does differ, however. Some, such as Impact Plus, hire individuals who have proved themselves in the sector, according to Jon Male, a manager with the consultancy. “We look for people who have got their hands dirty managing a sales team, for example, people with line management expertise, managing contact centres, people who know what it’s like to run a collections unit.”
Why should senior managers, either inside or outside the sector, make the move into financial services consultancy? There are several reasons, according to Booth.
“The appeal of working in the financial services sector is the competitive nature of the market, its global flavour and the international nature of the teams working in it. The financial rewards are also there for people who deliver good results.”
Career mobility is another reason, according to Ed Wilson, consulting director for LogicaCMG’s financial services division.
“There’s a lot more fluidity. It’s no longer the case that senior managers in banking and insurance go into consulting five years before they retire. Our clients, particularly the banks, are increasingly hiring ex-consultants.
Working with a range of clients in consulting offers them the opportunity to learn new things and to gain a depth and breadth of experience before going back into industry with more confidence and a better ability to cope.”
Small wonder
BEFORE he went into consulting, Jon Lott, a managing consultant at Troika, had plenty of opportunities to innovate. Two of the most prominent projects he oversaw were the launches of motoring website Jamjar.com and insurance site Directline.com.
However, as Direct Line’s parent, the Royal Bank of Scotland, grew, Lott found that opportunities to drive innovation became rarer. “What I had always enjoyed was doing big things to a business, working with senior people to make big changes. I felt that process slowing up as the organisation became bigger,” he says. “I soon realised I did not want to work for a really large firm where entrepreneurialism would be stifled.”
While the financial rewards in consulting are broadly comparable, job satisfaction is far higher, he says. “You work with a constant flow of interesting projects and there’s very little of the routine Monday morning meetings and very little of the staff management you need to do working for one business. What attracted me to Troika was that it was a small, entrepreneurial consultancy that hired people with a wealth of industry experience rather than recent graduates.”
