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As banks look to promote greater diversity, there is a case for adding academic diversity to the list.

Tim Skeet headshot

Investment banking has always been a challenging, yet fascinating career choice. This said, the finance world I fell into several decades ago was a different place to the one today, as were the routes into it.

The material difference in the profile and academic background of new joiners to the industry today is striking. International diversity has increased, while other areas of diversity have diminished, including educational diversity. As I look back over the highs and lows of the business, I suspect that the changes in who and how we recruited have had a direct impact on the industry’s decision-making and contributed to ‘group-think’ across the industry. This, in turn, played its part in the great financial meltdown of 2008.

By today’s standards, my own degree choice (modern languages) is all ‘wrong’, although it was completely unremarkable back in the day. Indeed, I owe some of my career longevity to skills honed in the dense pages of the German bildungsroman. However, the financial services sector has become a world dominated by those with degrees in science, maths, economics and business. Entry into the industry has become an arms race, with nuclear physicists sitting alongside students of ballistics and aeronautical engineers. Pack in economists and mathematicians, and the picture is complete for explosive outcomes and occasional meltdowns.

Of course, the technical nature of the industry also changed significantly. Technology, barely available in the early 1980s, has become pervasive. Greater technical and numerical skills certainly became increasingly necessary in some parts of the business, and particularly as trading across fixed income markets and derivatives grew to engines for revenues and growth.

As technology began to play a bigger role, the UK banking industry also came to be dominated by more aggressive and demanding American banks. These came armed with their own views on recruitment and academic background, with a bias towards numeracy and more ‘technical’ backgrounds. One side-effect seems to have been that liberal arts students were calculated out of the industry. Now, as we look to promote greater diversity, there is a case for adding academic diversity to the list.

Rather than viewing subjects such as classics, languages and history as irrelevant to financial services, they should be viewed as contributing towards rigorous diversity of thought

Arguably, not enough has been done to promote the strengths and uses of a rigorous, high-end liberal arts education — not just in the UK, but internationally. The term ‘liberal arts’ encompasses a broad range of academic, ‘soft’ subjects. However, soft topics teach hard capabilities and cover a range of vital analytical, critical-thought and people skills, which are relevant to running businesses and indeed desirable in financial services.

Studying liberal arts topics is a question of aptitude and interest. Not all bright, talented people take to science like a duck to water. Rather than viewing subjects such as classics, languages and history as ‘soft’ and irrelevant to financial services, they should be viewed as contributing towards rigorous diversity of thought, as well as bringing much needed robust, analytical and communications tools to the table.

People working in this quirky industry are generally highly intelligent, but can also be somewhat dysfunctional. They are prone to group-think, linear thinking and poor communication skills. This led to collective myopia in the lead up to the financial crisis. For all the big job titles, ample salaries, self-belief and vast resources poured into forecasting, the industry did not see the impending meltdown. Weak leadership, poor, fair-weather management, coupled with insufficient critical thinking, played a part in the ensuing drama. Moreover, the brilliant rainmaker deal-doers at the pinnacle of the industry often turned out to be hopeless people-managers and communicators. Running numbers is one thing; running people is another.

The academic discipline and rigor of critical analysis and the intuitive search for evidence that underpins many liberal arts subjects certainly has a place in the City of London today. Strong communications skills, critical thought, a questioning approach to received wisdom and strong people skills are just some of the attributes of ‘soft-skilled’ graduates. The armies of financial gurus, techies, quants and strategists might well have benefited from some lateral thinking, liberal arts types to question all those models and algorithms. Human panic in the face of collapsing values blew the financial models up. Perhaps a good study of literature or history would have been insightful, rather than blinkered reliance on a compendium of historic data.

The good news is that in recent years there have been signs that recruitment practices are changing in the industry. There appears to have been a move away from online numeracy testing, which proved the Achilles’ heel of many a classicist. Diversity of thought and background is recognised as the cure for group-think. Attracting a variety of talent and acknowledging the need for people skills will contribute towards the future success of the financial services industry, and make it a better place to work.

Tim Skeet is a career banker in the City of London.

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