Chancellor Rachel Reeves will announce a new skills compact on Tuesday that commits major financial firms including Barclays and Lloyds to retrain thousands of UK-based workers for the rise of artificial intelligence. The government-backed initiative, timed for what is likely Reeves's final Mansion House speech to City bosses, responds to fears that generative AI could automate large numbers of back-office and processing roles across the sector.
Signatories and scope
Nearly 20 initial signatories - among them the London Stock Exchange, Nationwide, Fidelity, Standard Chartered, Yorkshire building society, Lloyd's of London, and online bank Zopa - will begin drafting rolling three-year plans. Each firm will identify up to five critical skills, with AI mandatory, and commit to training and certifying their UK workforce in those areas. Progress will be reported to the Treasury and the Financial Services Skills Commission every year, and at least one senior executive at each firm must oversee the internal programme. The current signatories cover roughly half a million City workers.
The pressure to act
Claire Tunley, chief executive of the Financial Services Skills Commission, said the compact is the most notable sector-wide skills strategy since the construction industry launched its training board in the 1960s. "It's very significant," she said. "I don't think we've seen the likes of this in a generation."
The urgency stems from the pace of change. "What's different is the scale and speed that we're seeing change happen, driven by Gen[erative] AI," Tunley said. "This is throwing up a lot of challenges for employers." Research from Morgan Stanley last year estimated that AI could put more than 200,000 European banking jobs at risk by 2030. Standard Chartered's decision to cut 7,000 roles, partly because of AI, brought the issue into sharp focus earlier this year.
Training rules and reporting
All training must take place during working hours, and firms cannot count graduates or apprentices toward their training targets. Workers will be upskilled through professional courses, qualifications, certificates, or digital learning. The first reporting deadline falls in November, when signatories will confirm which key skills they are tracking and how they will build them across their workforce. Tunley stressed that the motivation is not just about mitigating job losses. "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. "We've proven that investing in upskilling your existing workforce is the fastest and most efficient way to get the skills you need."
Why this matters for HR professionals
The compact places a significant operational burden on HR teams, who will be responsible for designing training pathways, tracking skills data, and meeting annual reporting requirements. It also signals a broader shift: employers are moving from reactive hiring to internal upskilling as the default response to technological disruption. For HR leaders who need to understand how AI intersects with workforce planning, resources like AI for Human Resources provide a starting point. HR managers who want to lead these initiatives effectively can benefit from an AI Learning Path for HR Managers. The message from the City is clear - the skills gap is no longer a long-term concern; it is a near-term operational priority that demands structured, measurable action from HR teams.
Your membership also unlocks:
