Transcript Document
13 October 2006
3 rd BANKSETA International Conference 11-12/10/2006
Critical and scarce skills concerns in the financial services sector - and how the sector can support ASGISA and JIPSA
Andrew Paterson
Aims
• • • Critical and scarce skills concerns in financial services How the sector can support • • Accelerated and Shared Growth Initiative SA and Joint Initiative on Priority Skills Acquisition International referencing • • Financial services convergence and Comparative international skills patterns and flows
Critical skills and generic skills
• • • • • Shift from a product driven industry to a customer driven industry Workers with more wholistic skills sets (incl. generic and technical) Industry focus on securing highly qualified workers to ensure core accreditation skills in place - ad-hoc approach to other skills development needs Strongest demand is for generic skills: “Yet development of these skills may be left to the individual whiles the industry focuses on its accreditation and regulatory needs ” Need to ‘update’ the accreditation system to include broad based competence
Financial sector convergence
• • • Regulation and supervision – • SA Activities overall restrictiveness 10 on a scale of 5-20, same as average for high income countries. (lower middle =13) (/55 countries) Global technological - convergence new delivery channels Distintermediation of delivery channels competition – non-traditional • • • Clients – increased expectations Narrower margins & more emphasis on earning from fee based activities Raises definition of what is a banking product where similar financial products are offered in different financial services industries
Enterprise positioning and market strategy
Skills needs increase in number and complexity Global Continent al National Local Specialised product/services ‘Supermarket’ of product/services
Scope of product/service offerings
SOC 1.1 & 1.2 2.1 & 2.4 3.1 & 3.3 4.1 4.2 7.1 & 7.2 9.2 Related
Occupational and sector mapping of the financial services sector
Sub-sectors
Occupation Banking and finance Insurance Professional services
Corporate proprietors managers & administrators finance specialists insurance/ actuarial accountants/stockbro kers/fund managers Professionals Associate professionals finance /ICT specialists ICT specialists insurance/ actuarial/ ICT specialists ICT specialists accountants/stockbro kers/fund managers ICT / technical specialists Cleric al call centre operators (ICT users) support call centre operators (ICT users) support Support (ICT us ers) support Secretarial Sales occupations Other elementary agents / brokers other support call centres agents / brokers other support call centres NA other support accountancy and financial intermediation
Soc 1.1 & 1.2 2.1 & 2.4 3.1 & 3.3 4.1 4.2 7.1 & 7.2 9.2
Key trends across main occupations in financial services (UK data) Sector
Occupation Bank & Fin Insur Prof serv Change Similar driver(s) across three sectors Corporate managers, proprietors & administrators 8 12 13
↑
• Dynamic skills needs Professionals Associate professionals Clerical and administrative Secretarial Sales Elementary 2 4 53 9 3 6 4 18 30 8 8 3 14 11 15 12 NA 7
↑ ↑ → ↓ ↓ → →
• Technical content increase • Risk management • Regulation • ICT • Technical content increase • Intra & Internet • Data management • Growing focus on client • Centralised customer service – competition and margins • Move away from product-based approach • Call centres • Automated systems reduce need • Cost-cutting driver • Internet & Call centres not substitutes for face-face • Reductions in 4.1 & 4.2 sustain need – replacement demand
ASGISA and JIPSA
ASGISA
• • • • • Accelerated and Shared Growth Initiative of South Africa (ASGISA) Initiatives to promote accelerated and shared economic growth and labour absorbtion with the long term aim of addressing the fundamentals for sustainable growth and development. Heart of ASGISA - R372bn infrastructure development programme which will require particular skills. MTEF planning.
Wide implications across entire economy, but targeted sectors have been targeted - tourism, business process outsourcing (BPO), and biofuels. Other sectors targeted in the medium term include: creative industries, mineral beneficiation, chemicals, agriculture and forestry
The centrality of the financial system
• • • Prior to 1990s, view was that economic growth lead financial sector growth which responded to demand Recent research has focused on the possible causal connection between the development of the financial system and overall economic development (Barth Caprio Nolle, 2004) Industries more dependent on external financing tend to grow faster in countries with a higher level of financial system development (Rajan and Zingales,1998) • • Key indicators SA banks lower middle income economy (55 countries), • Concentration - bank assets foreign owned 5% (rank 43), government owned 0% (51) • Competition - bank assets in top three banks 57%(22 mid); Net interest margin as a % total assets 2.93(32) (interest rates charged against own interest expenses) Concentrated banking markets > less lending at higher costs to borrowers especially smaller firms > negative effect on economic growth
•
ASGISA – opportunities for finance sector support
Attention to legacy of a fragmented spatial economy & constraints on job creation and growth prospects of small enterprises, informal traders and emerging farmers • Stepped up investment in the residential and local built environment prioritised (housing, community services, water and electricity) • Broadening of economic participation: • Expanded public works programme - labour intensive methods many areas of infrastructure maintenance and public service delivery • Community investment aimed at accelerated delivery & consolidating local development initiatives • Strengthening of public health care and education such as: • Upgrading and revitalising hospitals, equipment and ICT • School building and facilities • Investment in facilities and equipment for the FET colleges recapitalisation
JIPSA
• To address the question of constraints and inefficiencies in the existing legislative and regulatory frameworks and institutional arrangements for the delivery of skills.
• Immediate short term deliverables • Intermediate skills for infrastructure development • ICT strategy • Unemployed graduates • JIPSA has been directed to focus on five priority skills areas: • engineering and planning skills for the ‘network industries’, • city and urban and regional planning & engineering • • • artisanal and technical skills - infrastructure development, management and planning in education and health mathematics, science, ICT and language competence in public schooling
Considerations
• • • •
SETA coordination for financial sector Critical skills - NB Scarce skills – less NB Financial services ASGISA and JIPSA
•
Service providers skilling sector human resources
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