We often kick off our discussions highlighting some key changes within the regulatory space and discussing their impact on business leaders, especially those operating within Financial Services. The latest FS HR & Compliance Network Webinar began no differently. James Turner, Associate Director at Osborne Clarke, provided insight into two recent publications from the FCA: the ‘FCA Perimeter Report’ and the ‘FCA Regulatory Initiatives Grid.’ Extra commendation is given to the second half of James’ talk where he performed a technological feat and shared his screen on a zoom call!
James suggested firms operating in any market segment to read the 2020/21 FCA Perimeter Report. The report reflects the FCA’s current thinking on the regulatory perimeter and this year’s report is an “embodiment of some of the changes in approach that Nikil Rathi is bringing to the FCA.” The FCA is looking to extend the current regulatory perimeter through regulatory reforms to Insurance, the Appoints of Representative Regime and of course, Crypto-assets. We highly recommend listening to James’ full overview of the report on the recording of the recent session, as well as reading the report itself which embodies how the FCA “do not regard themselves as a passive observer of the perimeter, but very much a stakeholder driving perimeter discussions”.
Following James risking it all technologically and sharing his screen, he demonstrated how we can all benefit from using the phenomenally helpful ‘FCA Regulatory Initiatives Grid’. The grid displays all the upcoming regulatory changes for the next few years and the likely impact assessment on the industry – if you have not seen the grid and you think people in your organisation would benefit from seeing this, we recommend listening to this introduction to the grid from James.
Having set the scene with a regulatory update, we then moved on to discuss digital transformation in the back office itself. Catherine Hammon, a specialist Digital Transformation Lawyer at Osborne Clarke who was named as one of The Lawyer’s Hot 100 Disruptors for 2019, opened by highlighting findings in a recent BEIS report that suggest, contrary to popular belief, that
digital transformation won’t lead to mass technical unemployment, however, it will see the work that we do shift and change.
Pointing out that by 2030, 7 million people in the workplace are predicted to be under skilled, Catherine suggested that handing over menial cognition tasks to robots and AI machines can lead to less tedious and more creative tasks being completed by the workforce. Catherine’s particularly important insight was that the organisations that tend to succeed with digital transformation are the ones that power forward to achieve better results and actively implement digital transformation strategies. On the other hand, the organisations that tend to fail following digital transformation are the ones who engage passively with the process and strategy, perhaps only opting into the transformation as a result of falling behind competitors or the industry. Fundamentally, it is organisations that are proactive in keeping up with technologies that will benefit most from the tools and features that they can offer.
Tom Holmes, Founding Director of Veran Performance, drew the audience’s attention to the fact that while in many areas of life we already engage with AI (such as website chat bots), we do not see this across all industries, suggesting perhaps that some are more willing to accept the change than others. Following on from this, Cairene Gilbert, Head of D&I at Handelsbanken pointed out that digital tools can give greater accessibility within important HR areas such as D&I and expand the pipeline of talent as well as reduce the social factors that may prevent an employee from succeeding in their role. Cairene offered a fantastic quote that she had recently heard:
‘We need to view diversity as our digital age superpower’.
Whilst Cairene highlighted some fantastic benefits to D&I as a result of the digital age, Tom called on Olivia Sinfield, a Partner at Osborne Clarke with over 16 years’ of experience in the industry, to explain the legal ramifications of digitalising back-office functions and how this could potentially hinder diversity in the workforce. Specifically, Olivia explained how investment into monitoring and facial recognition of employees due to the Covid-19 pandemic has highlighted the inaccuracy of technology’s ability of recognising different skin colours. Utilising a statistic from the Economist to further illustrate the point, Olivia highlighted that from a gender perspective, for every 1,000 female grads only 24 have an ICT degree and only 6 go on to digital jobs. Subsequently, women in technology related roles leave more frequently than men due to limited opportunities. As such, Olivia posits that organisations need human communication to take responsibility for the circumstances where technology cannot achieve the desired aims – hopefully, reducing exclusion of some people in the workforce from certain jobs.
Tom then went on to outline what is, in his mind, the most difficult challenge to digital transformation: what we describe here at Veran as ‘the change to a SaaS mindset’ – the mindset that allows your workforce to embrace a digitalised future and a future where things are changing all the time, more easily.
Our panel offered their practical experience of addressing the switch to a SaaS mindset. Catherine finds lessons from the American novelist Ernst Hemingway can be applied to Digital Transformation as the transformation process happens “Gradually, and then suddenly”. Catherine made a great observation how a lot of the technological change we experience now happens in small, regular increments, unlike the largescale technological updates we experienced in the past. This can make the process less daunting than it seems at first.
“Digital change will end up being transformative. But on a day-to-day basis it can be much more digestible than it might perhaps at first seem.”
Olivia provided a fantastic example of how a change of mindset can drastically improve your front and back office technological capabilities. If you have not heard this story before, we would recommend you tune in to hear Olivia’s explanation of how Levi Jeans harnessed talent through transforming internally.
Cairene discussed her experience of change in practice and how Covid has accelerated the digital way of working. At Handelsbanken, they have used a blended learning approach to enable their employees to develop in a way that suits them.
We rounded off our discussion with Catherine and Olivia who considered upcoming regulatory and legal changes in both the UK and the EU. We recommend you have a listen to their fantastic discussion of the potential effects of Artificial Intelligence on the wellbeing of the workforce and mental health pre and post Covid-19.
Finally, following the session, Tom asked each panellist what we should be doing to get started with digital transformation, and they were:
1. Working on your digital literacy – aiming to learn something new every week, whether that’s discovering a new option in software you use regularly, or exploring a new app or tool, or reading an article about transformative digital technology. 2. 'Popping the social bubble' - meeting someone new every other week; a new connection on LinkedIn, heading to the office or even attending an in-person event. 3. Gazing into the crystal ball - preparing for and being a step ahead of future inevitable regulation by addressing issues around ethics, transparency, accountability, and proportionality now.