Retail ring-fencing could present a huge challenge for Britain’s banks in terms of resourcing investment banking and retail talent, according to Dawn Nicholson, HR consulting partner at professional services firm PwC.

This week a draft report from the Independent Commission on Banking, while stopping short of calling for banks’ retail and investment arms to be split, called on Britain’s big banks to ring-fence their retail banking divisions to help ensure no bank is too big to fail.

Speaking to Recruiter, Nicholson said the draft report was unclear on how ring-fencing will operate and to what degree investment banking and retail banking divisions need to be split. She explained it does talk about transferring all intellectual property, the staff etc into a retail ring-fenced entity.

“All of these organisations have been dealing with huge amounts of regulations and changes being driven by regulation over the past 24 months. I think it does place quite a lot of pressure on back office people who will be responsible for looking at employment-related issues in terms of whether you have to put people into separate subsidiaries, do you have to look at their terms and conditions? That puts pressure on lawyers and HR.”

In terms of the back office functions, Nicholson questioned what that means if these functions work across these organisations. “How is a firm going to respond to that? If someone has been multitasking and able to work across both areas, will banks have to say ‘you now have to become dedicated to the retail bank and I will have to hire someone in to replace you on the investment side’?.

“There are a lot of unanswered questions. There is a lot of work to be done on the potential changes depending on how defined the two entities need to be from each other and then look at increasing our workforce if we are not going to be able to leverage our workforce across all elements of the organisation.”