100,000 financial services jobs predicted to move overseas

The Times reports today that a UK financial services consultancy, Troika, has predicted that 100,000 UK financial services jobs in banking and insurance will be lost overseas to countries such as China and India. This spells further bad news for freelancers who specialise in servicing these market sectors.

According to Andrew Stewart, MD of Troika, up to 20,000 back office jobs have already been lost to India – which represents less than 5% of the back office staffing in areas like life and pensions, general insurance, retail and investment banking and mortgage and credit-card processing.

Stewart predicts that a further 40,000 jobs in these industries, plus 60,000 in banking are likely to go in the next seven years. Stewart blames much of the pressure on costs on the Government’s drive to get the financial services industry to limit costs to 1% of fees and premiums. He cites the typical cost of processing a policy as being £10 in countries like India and South Africa compared to UK costs of £30+.

However even these savings are dwarfed by the potential savings if these operations are moved to China, where Troika say costs are likely to fall to nearer to 50p per policy in the next five years.

One thing seems inevitable. It is highly unlikely that the UK Government will stand, Canute-like, in the way of the businesses accessing cheap labour for services in the world marketplace. At best we can only hope that we use our skills to keep ahead of the game in terms of developing new services and products to sell in the world’s markets and that our Government ensures that we have equal access to higher skill opportunities abroad.