Why The Financial Services Sector Hires Consultants?

Financial services firms operate in an extremely dynamic business environment – aggressive competition, sudden changes in regulatory procedures, rapid innovations in the technology space & the pressure to keep evolving their service offerings. Add to this, the war for quality talent. Given their pursuit of business growth and keeping abreast of the daily peaks & troughs of the financial market, several financial services firms choose to partner with financial services consulting firms to manage the ever-evolving business tides.

Globally, the consulting industry market size stood at approximately US$ 132 million in 2020, a significant revenue drop from the previous year on account of the Covid pandemic. Banks, insurance companies, asset managers, and other financial services institutions account for about a 20% share, in terms of consulting spending. A significant portion of this spending is with the booming ‘professional gig economy.

One of the major reasons that financial services clients hire consultants is to seek help with staffing. Due to the shortage of quality talent amid changing labor & hiring laws, availability of specialized skill sets, shift to new age professional pursuits, the rise of the gig economy, regular burnout & rapid attrition rates, the financial services sector partners with Staffing Consultants to compensate for headcount improvement or to augment below capacity workforces.

A second big reason why consultants are asked to work with financial services firms is to partner with them to explore new digital technologies or improve their existing technologies. With digital transformations being the new drive across industries, the need is especially urgent for financial services to keep a competitive pace. Hence the need to engage consultants to deploy, train & manage new systems & processes.

Regulatory changes frequently impact the way banks and financial services firms conduct business & these firms look to hire consultants to help them navigate the ever-changing regulatory environment. While this is not a major reason for consultant hiring as many firms deploy and use RegTechs to help them manage new regulations more seamlessly, however, this remains amongst the top reasons for consulting hires.

Several times, financial services companies admit to not having the skills needed for a particular project and, hence, partner with consultants to help them access the requisite employee capital they need. Rather than force-fitting internal talent to straddle specialized job roles, financial services firms rely on staffing augmentation specialists to fill the gaps.

Given the new ‘ongoing pandemic reality, that has redefined most things, including the way organizations work, independent consultants and boutique firms have been gaining popularity, given their propensity to drive down pricing, and provide quality, specialist work in short periods of time. Unsurprisingly, the need for flexibility has been the chief driving force for the preference of small firm consultancies over large firms, directly a result of the growing trend towards flexibility in business models. This trend is absolutely in keeping with the usual trinity of factors that are cited when tapping independent or boutique firm consulting expertise.

EZDynamic is a boutique management consulting firm, with an entrepreneurial spirit that is driven by results. We provide client-centric solutions for Financial Services firms, helping them achieve their business, strategic, and technology goals. EZDynamic works in the areas of Business Strategy, Technology, Regulatory Implementation, Change Management, and Staff Augmentation.