Chancellor Rachel Reeves is set to announce a new City 'skills compact' that will commit major financial firms such as Barclays and Lloyds to retraining thousands of workers for the AI revolution. The initiative, launching on Tuesday during what may be Reeves' final Mansion House speech to City bosses before a potential change in government, aims to help employees 'keep pace' with technological changes that have sparked fears of mass redundancies.
Details of the Compact
Nearly 20 initial signatories, including the London Stock Exchange, Nationwide building society, and asset manager Fidelity, will begin drafting rolling three-year plans to train and certify UK staff in up to five critical skills, including AI. These plans are designed to future-proof jobs amid rapid technological advancement. Progress will be reported annually to the Treasury and the Financial Services Skills Commission, with at least one senior executive at each firm overseeing the internal programmes.
Impact on the Financial Sector
The compact is intended to keep the UK's lucrative financial sector competitive. According to TheCityUK, the industry accounts for about 11% of total economic output and employs approximately 2.5 million people. Claire Tunley, CEO of the Financial Services Skills Commission, described the initiative as the most notable sector-wide skills strategy since the construction industry's training board in the 1960s. 'It's very significant. I don't think we've seen the likes of this in a generation,' she said.
Addressing AI-Driven Job Fears
AI has raised concerns over job security, particularly for back-office staff performing processing and oversight tasks that AI can automate. Research from Morgan Stanley estimated that AI could put over 200,000 European banking jobs at risk by 2030, about 10% of industry roles. Standard Chartered, a founding signatory, announced 7,000 job cuts in May partly due to AI, with CEO Bill Winters apologizing for describing the move as 'replacing, in some cases, lower-value human capital.'
Commitments and Reporting
Only UK-based workers are covered by the compact's commitments. While AI-related job losses may be offset, Tunley emphasized that upskilling is primarily about driving innovation and growth. 'We need the capabilities. And if we don't build them, we are going to be held back with innovation, with growth, competitiveness,' she said. Each signatory will start gathering data for the first reporting deadline in November, confirming which key skills they will track and upskill. At least one skill must be AI, with training through professional courses, qualifications, or digital learning during working hours. Graduates or apprentices are not counted in training targets. The current 17 signatories cover about half a million City workers, and Tunley hopes the entire City will follow suit.
