Announcing the AIBF's prospective merger with the Securities Institute of Australia: strategic renewal: responding to rapid change and consolidation within financial markets

Journal of Banking and Financial Services, April-May, 2005 by John Unkles

One of the most fundamental issues facing all organisations and businesses in today's rapidly changing world is survival through strategic renewal.

For banking institutes, what this means is repositioning ourselves and refocusing our resources and strategic objectives as our customers' needs evolve.

There are four main issues that I would like to address in relation to this key theme:

* The structural changes occurring within the financial services industry that are driving the need for strategic renewal;

* The importance of repositioning ourselves to stay relevant;

* Identifying and leveraging our key strategic advantages; and

* The exciting new strategic direction that we are taking at the AIBF.

Structural change within the financial services sector

As those in the industry are all very much aware, structural changes and new technologies are redefining the operating environment and competitor landscape not only for financial institutions but also for institutes as providers of education and training services to the financial services sector.

Financial institutions are undergoing rapid consolidation and organisational and cultural change, in response to increasingly sophisticated, complex and competitive markets.

Our client base is broadening and changing quickly with many new entrants to the industry as well as new suppliers. New products and services are continually emerging. Consumers are more demanding and regulators are more interventionist. There is also an increasingly wide range of professionals working in securities, banking and financial services, and they are better educated and have greater needs and expectations about their professional associations.

This ongoing consolidation and convergence within the financial sector means that institutes will also need to evolve and some level of consolidation may also be inevitable.

The path that we have chosen at the AIBF is consolidation through a merger with the Securities Institute of Australia to take effect following a membership ballot to be conducted in June this year. This will enable us to strategically reposition ourselves and develop the necessary scale to meet the education and training needs of our members.

I will give more details on this later. But before I do, let's look at some of the other strategic issues driving this need for consolidation within financial services industry associations and the importance of repositioning ourselves to stay relevant.

We must stay relevant

With change going on all around us, institutes cannot simply rely on our longstanding relationship with the industry to attract membership and create an ongoing demand for our services.

As any business school graduate will tell you, an organisation that wants to maintain its competitive edge must anticipate change and respond effectively to changing market conditions.

In addition to the structural changes that I have already identified, we are all facing a number of strategic challenges such as:

* The significant costs associated with new e-learning technologies;

* Strong competition from large providers of business education and training and other industry associations;

* The need to keep pace with new skills requirements, security of employment issues and the increasing mobility of our members; and

* Ensuring that we add value not only for our individual members but also for our corporate clients facing reduced training budgets and pressure to deliver fast results.

To meet these challenges we need to reconfigure our own competencies and take a more strategic approach to our service delivery, ensuring that we leverage our competitive strengths. In doing this, we may also develop new forms of competitive advantage that will help to ensure our sustainability.

Identifying and leveraging our key strategic advantages

One important strategic advantage for institutes is the growing community and regulatory expectations about ethical and professional conduct within the industry. In this environment it is a distinct advantage to be affiliated with a respected professional body of like-minded individuals signifying member subscription to high ideals and shared values.

Our main competitive advantage resides in the talent, and the networks within our own membership base. But, even more important is the role that we can play in assisting our members to develop their own key strategic advantage--the intellectual capital of their employees.

Faced with a shortage of talent and operating in global markets, Australian financial institutions face significant challenges in attracting and retaining the best and brightest employees. But, by ensuring their employees have opportunities to access excellent education and professional development, employers can not only redress some of these labour market pressures, they can also improve their retention rates and enhance their competitiveness.

The AIBF is acutely aware of the importance of skills development and lifetime learning, both for employers seeking well-educated and well-trained personnel and for the diversely skilled employees throughout the industry.