By Paul Kelly
London has for decades been a world leader in the financial education and training of young people, its universities and business schools equipping them with the skills needed for a successful financial services career. Preserving the capital’s status as Europe’s leading financial centre demanded a guaranteed supply of talent which was duly delivered. Brexit has meant major City names like Goldman Sachs and JPMorgan have established European hubs outside the UK to achieve regulatory compliance. Will these rival banking centres pose a threat? The quality of a London education and the City experience are expected to withstand the challenge.
Covid has generated higher student demand for qualifications in commerce, particularly those focused on accounting, coding, business and data science. The changeable job market the pandemic caused left many students opting to stay in full-time education rather than taking their chance in the tumultuous employment world. Specialist masters in finance degrees, whose graduates are particularly sought after by large multinational employers, saw a 78% increase in demand worldwide in 2020 and a huge 90% in Europe.
The dominant providers of these elite programmes have historically been the European schools, especially London. According to Tim Mescon, executive vice-president and chief officer for Europe, Middle East and Africa at AACSB, the business school accreditation body, Brexit has created “extraordinary opportunities” for institutes in Paris, Berlin, Amsterdam and Dublin. With graduates now able to pursue banking jobs outside London, preserving the City’s standing will depend on “their legacy relationships with the global banking players, internships, research by professors, and commitment to recruiting the very best students.” Programmes that offer students access to both the City and other European markets will outshine the competition. France’s ESCP Business school’s syllabus caters for an EU context in Paris and for the UK in its London campus.
Preparing for a finance career involves more than formal study of a relevant subject, of course. The pandemic has emphasised the value of a traditional mentor/mentee training model in the workplace, highlighting how much it’s been missed. Educators shifted teaching online during Covid and embraced digital innovation to maintain standards. They developed techniques whose benefits will endure after in-person lessons resume. New starters, even highly educated ones, gain enormous advantage from watching and learning as they work, however, observing their colleagues doing deals and performing tasks under supervision. Industry events and client meetings provide great networking opportunities. Kunal Shah, global head of emerging markets at Goldman Sachs, believes it’s far more difficult to ask a junior to help with a job when everyone’s working remotely. Many of Goldman’s junior traders have opted to go back to the office following relaxation of restrictions “because they learn from that apprenticeship culture.”
While technology has undoubtedly permanently changed how we work, online meetings are inadequate replacements for face-to-face training, especially for traders, “There’s a reason that trading desks have evolved as a centralized hub at the heart of investment teams,” says Tom Stevenson, head of EMEA equity trading at Fidelity International. “You can’t get away from the fact that doing it virtually is perhaps not as productive as being all together physically.” Although Brexit has made visas more difficult to arrange, London hasn’t lost its attraction in an employment or an educational setting. Philippe Thomas, academic director of the masters in finance degree at ESCP Business School concurs, “objectively, the concrete consequences are limited.”
And, London’s energy and bustle will always be a magnet for the young. Although Ernst and Young reported in March that 43% of companies had moved jobs totalling 7,600 out of London, this is a tiny proportion of the capital’s 300,000 total financial service positions. A trickle rather than a flood. Recruitment specialists Morgan Mckinley and Vacancysoft recently told Reuters demand for new recruits was the strongest it’s been for years. In the first three months of 2021, 429 internships were advertised in London, the most per quarter since 2018. In an educational and professional context, finance in London is buoyant. The city’s vibrancy, its academic excellence and the richness of its in-person mentoring create an indomitable force unlikely to be diminished by alternatives elsewhere in Europe.