Financial services sector employers require recruits who can bring experience and expertise to the company from day one. AIFMRM Director, Professor David Taylor believes that through consultation with industry and focused postgraduate education, academic institutions can produce such graduates.
Commerce faculties and business schools are not sufficiently focused on producing graduates with relevant knowledge and holistic business skills in order to be “Day One Ready” for the complex and difficult financial services sector. This is according to Director of the African Institute of Financial Markets and Risk Management (AIFMRM) at the University of Cape Town, Professor David Taylor.
Taylor was addressing delegates at the Fintech 2020 industry day in Johannesburg, held on 14 April 2016, about the need for focused education for financial services and risk management.
In his presentation, titled Educating at the edge of chaos, Taylor outlined the challenge faced by graduates from commerce faculties and business schools today. He said a recent survey by AIFMRM revealed that the majority of roles within financial services companies required broad financial services experience, with specific product knowledge within the relevant sub-sector, be that retail banking, investment banking, long-term insurance, short-term insurance or asset management. They also needed a holistic understanding of processes, procedures and the interconnectedness of the different business areas in the relevant type of company.
“Firms are essentially looking for maturity of mind and attitude in new recruits. They need recruits who do not need a year or more of post-employment immersion to begin to contribute in a meaningful way,” he said.
But, graduates of this calibre are in short supply. As a result, financial services firms have started looking for recruits in other fields. “Interestingly, a number of companies interviewed said that they were increasingly employing engineers in senior roles due to the strategic process-driven thinking that an engineering education instils. For a variety of reasons, including transformation, the vast majority of graduate opportunities are for 4th-year graduates,” he said.
“As it stands, the technical sophistication of modern Financial Services roles, the speed at which the environment can change, and the breadth of knowledge and abilities it requires to be truly useful is beyond an undergraduate education.”
Taylor called for a new and more sophisticated approach to postgraduate education, arguing specifically for specialised Master’s programmes that are structured as apprenticeships and are coordinated by both industry and universities “as a matter of course”.
“In order to be truly useful, universities should view specialised financial services education as having four key ingredients: student selection from diverse backgrounds; the acquisition of technical skills coupled with a comprehensive understanding of the future work environment; an apprenticeship ethos throughout the degree; and a determined focus on ‘job readiness’,” he said.
Taylor added that this thinking informed the launch of AIFMRM’s Master of Commerce degree in Risk Management of Financial Markets this year. The new degree has been designed to plug this skills gap and was developed in consultation with industry. He said that, despite the challenges the industry faces, there is reason to be optimistic.
“Postgraduate programmes in financial services related disciplines have increased in number in the last decade. Institutes such as ours have found favour with donors from the banking and insurance sectors, and talented students are being drawn into financial services careers.”
In 2016, AIFMRM and statutory body, BANKSETA, signed a Memorandum of Agreement that will see BANKSETA provide over R2.5 million to sponsor students enrolled in the new degree.
Download a full copy of David Taylor’s talk.