Foreword

It is an unsettling time for banks. Public opinion of banks has not recovered since the onset of the financial crisis, as scandals such as Libor rate-rigging and sanctions violations continue to assail the sector. This has led to intense regulatory scrutiny, levelling the playing field between banks and non-banks. Banks are now competing with innovative tech giants, such as Google and Apple, and a growing financial technology ('fintech') industry looking to disintermediate the banking value chain.

These non-bank challengers now pose a significant threat to the banking business and banks need, at the very least, to respond. But it is clear that the most appropriate response is to embrace innovation and implement intrinsic cultural change in order to fight off all the challengers and remain relevant. A vital way for banks to do this is to attract, recruit, develop and retain a wide talent pool of innovative and ethically-minded talent.

Deloitte has used data collated by Universum once more for this year's Talent in Banking study. Deloitte analysed data from 211,000 business students in 30 markets in an attempt to answer the following questions:

  • How popular are banks in comparison to other industries with business students?
  • What are the top career goals and aspirations of business students considering a career in banking?
  • What do banking-inclined students expect from a career in the sector, and does this align with their aspirations?

The findings make for unpleasant reading for banks. The popularity of banks among business students has been in constant decline since 2011, while that of software and computer services, the sector most likely to encroach upon the banking value chain, has been on an upward trajectory since 2010. Fast moving consumer goods (FMCG) remains the industry of choice for business graduates. At a time when attracting the best talent is more important than ever, banks find themselves choosing from a dwindling talent pool.

Of perhaps even greater concern is that the talent attracted to banks does not value innovation or ethical standards. Compared to their peers, banking-inclined students are less concerned with being innovative or with cultural attributes such as 'ethical standards' and 'support for gender equality'. Furthermore, banking remains an industry that continues to put off women. With innovative, ethical talent more attracted to other industries such as software and computer services, it will be difficult for banks to compete and to transform culturally.

These findings should be a wake-up call for banks. In this report, Deloitte outlines the key talent issues facing banks, and provides suggestions as to how banks can improve both their talent propositions and their internal organisation in order to tackle the challenges ahead.

It is not too late for banks to act.

Executive Summary

1. Banks have failed to arrest their decline in popularity

Having enjoyed the undisputed leadership of global industry popularity among business students between 2008 and 2013, banks remain in second place, behind fast moving consumer goods (FMCG), for the second year running. Software and computer services continue their relentless upward march. This has been happening at a time when web-based tools make it easier for job-hunters to find out about a variety of industries, and to advertise themselves to potential employers.

Banks' decline in popularity may be due in part to the bad press around past and potential future layoffs in the sector. The constant stream of news about job cuts may be weakening the appeal of banking among business students.1 This highlights the importance of brand association and trust for banks among customers and employees.

FMCG ranks number one or two in 18 out of the 30 markets surveyed,2 but has slipped by 1.3 percentage points in popularity over the past year, and is now just ahead of banking in the popularity stakes.

Software and computer services, conversely, is an up-and-coming challenger. This sector increased in popularity in 203 of the 30 markets surveyed in 2015, and now holds third position globally. The sector's attractiveness is mainly driven by a few global giants. Google and Apple, for example, are among the top five most popular employers for business students in 244 and 105 out of 29 markets for which data is available respectively,i displaying consistency in their employer brand positioning across the globe.

2. Banks fail to shake off "men in suits" image

Despite efforts to increase diversity, banking continues to be less attractive to female business students than to males. While 61.1 per cent of business students surveyed globally were female, just 51.7 per cent of banking- inclined and 44.0 per cent of investment banking- inclined students are female, representing 15.4 and 28.0 per cent drop-offs respectively. This suggests that the "men in suits" perception of banking persists.

Banking-inclined students care less about 'ethical standards', 'corporate social responsibility (CSR)', 'support for gender equality' and 'acceptance towards minorities' than do their fellow business students, according to Universum data. They also rank 'serving a greater good' as a less important career goal than their peers.

3. Banks are attracting conservatives, not innovators

Banking-inclined students value 'innovation', creativity and dynamism less than the average business student. By contrast, they value 'financial strength' and 'high future earnings' significantly more than their business school peers.

This could be due to banking not being perceived as an innovative business, with just 27.6 per cent of banking- inclined students surveyed expecting to find 'innovation' in banking. It is also worth noting that any creativity in core banking in recent years has been associated with negative developments such as rate fixing or mis-sold bundled products, e.g. payment protection insurance.

Banking-inclined students expect 'financial strength', bonuses and 'high future earnings' from banking. The qualities they expect the least from banks are 'innovation', 'attractive services' and creativity.

4. Are banks ready for millennials?

Banking-inclined students continue to value 'work/ life balance' and 'job security' above other career goals, such as being 'competitively or intellectually challenged', although the former two goals have dipped in importance. These two also top the career goals list for all business students, and to an even greater extent, showing that these are clear priorities for this generation.

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Footnotes

1. 'city jobs lost in spite of upbeat outlook', financial times, 30 march 2015. see also: http://www.ft.com/cms/s/0/3738225c-d60f-11e4-a598-

2. the 18 markets where fmcg came first or second were: austria, belgium, brazil, czech republic, denmark, finland, france, germany, ireland,italy, mexico, middle east, netherlands, poland, spain, switzerland, turkey, uae

3. 20 markets where the software and computer services sector increased its popularity were: australia, austria, belgium, brazil, china, denmark,france, germany, hong kong, mexico, netherlands, poland, singapore, south africa, spain, sweden, turkey, uae, uk, us

4. the 24 markets where google was among the top five most popular employers for business students were: australia, austria, belgium, brazil,canada, czech republic, france, germany, hong kong, india, ireland, italy, mexico, netherlands, poland, russia, singapore, spain, sweden,switzerland, turkey, uae, uk, us

i. Excludes Middle East (data not available)

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