Technology
Is There a Way to Fix the TechSkills Gap in Banking?
Published by Jessica Weisman-Pitts
Posted on September 14, 2023
5 min readLast updated: January 31, 2026
Global Banking and Finance Review
Company
Published by Jessica Weisman-Pitts
Posted on September 14, 2023
5 min readLast updated: January 31, 2026
Consumer banks need to digitalize, but face a shortage of the technology skills needed to do so. Stella Ioannidou of The Josh Bersin Company shares extensive research pointing to possible answers
Consumer banks need to digitalize, but face a shortage of the technology skills needed to do so. Stella Ioannidou of The Josh Bersin Company shares extensive research pointing to possible answers
Right now, traditional banks are struggling—and not just with the lingering effects of the global pandemic, high levels of inflation, and a very mixed global economy.
They’re also struggling, despite their best efforts on this during the pandemic, to fully digitize and offer the same level of digital and mobile-first experiences that their challengers have now made standard.
And it’s not because of a lack of commitment to achieving this, nor a lack of investment. Main St (and even some Wall St) banks are hindered by their reliance on legacy enterprise technology, and a lack of people with the next-generation tech capabilities needed to oversee transformation in-house is fast becoming their most pressing concern.
The shortage of tech skills
As part of the Josh Bersin Company’s Global Workforce Intelligence project, we’re compiling and carefully sifting through data from a range of sources to give a complete view of the workforce. These include our own data banks; eightfold.ai’s constantly updated talent intelligence platform; and Lightcast, a labor market insights platform with data derived from official government sources, enriched with additional figures from online social profiles, resumes, and job postings.
This deep dive showed us that in the last six years within consumer banking, there were (on average) over 216,000 newly posted job openings every month for next-gen technologist profiles. However, only 144,000 were filled.
What’s driving this tech skills shortage?
Perhaps the main factor is that banks simply aren’t the only ones chasing these recruits; competition is fierce from many other industries including consulting, IT, aerospace, and even automotive. We found that consumer banking accounts for only 13% of the total unique job postings for tech talent. Nowadays, skilled technologists have a wide array of job opportunities across various industries, and these alternatives may be perceived as more appealing or fast-paced compared to positions within the banking sector.
And when technologists do take a job in banking, they often don’t stay for a long tenure. For instance, we found that most technologists who pivot from the technology sector to banking eventually return to the tech industry. In fact, while 7,356 individuals made the transition into consumer banking in the past 5 years, 7,098 left banking to return to the tech sector. This high turnover of tech professionals in banking highlights how employee retention is a colossal issue here driving the skills shortage.
And whilst banking is thought of as a very well-compensated field, money alone isn’t the answer to this problem. Consumer banks are offering high compensation packages right now to get people on board (we see a 36% year on year increase in advertised salary post-pandemic allied with 19.5% uptick in similar salaries compared to other sectors), but there just aren’t enough suitable candidates willing to pivot into banking out there.
What can be done?
Our research, bolstered by ongoing dialog with the banking organizations that are the best-performing in this area, suggests a few clear solutions:
Understand the competitive landscape. Consumer banks’ first steps should be to analyze job transitions of competitors, adjacent sectors, and other industries. They can then use this intelligence to attract and retain top technologists, ensuring a sustainable talent pool for the bank’s digital transformation efforts.
Develop targeted recruitment strategies by examining job posting volumes, hire speed, and posting intensity ratios. By identifying tech roles with high posting intensity ratios and longer posting durations, a bank can develop tailored recruitment approaches that incorporate attractive compensation packages and ample career growth opportunities, and so more effectively compete for top tech talent.
Design a skills-based organization. Understand that more and more highly skilled technologists are looking for completely new skills, career pathways, employment models, organizational structures, and HR practices. A bank should ensure this demand is met throughout their company culture and ways of working.
Seek out talent in nontraditional talent clusters. Texas, New York, and California are hot spots for hiring the tech skills needed—but midwestern states have lower competition and a relatively smaller pool of job postings. Banks should identify and target the markets that align with its most pressing current talent needs.
And last but not least, foster sustainable careers by addressing the discrepancy between skill demand and salary prospects, aligning salary progression with skill development, organizational purpose, and career advancement. So, focus not only on designing skill-based career pathways, but also on ensuring that career progression corresponds with salary increases—providing a fair and immediate incentive for technologists to stay committed and motivated.
Simply hiring new employees will not resolve the talent gaps that banks face. To address this challenge, it is crucial that leaders integrate recruiting, retention, development, pay, goal-setting, and leadership into systemic talent strategies.
The author is Director of Research atThe Josh Bersin Company, a research and advisory company focused on HR and workforce strategies. For more on these themes, see the new report, ‘Consumer Banking Under Siege: Addressing the Digital Capability Gap’
Digital transformation refers to the integration of digital technology into all areas of a business, fundamentally changing how it operates and delivers value to customers.
Tech skills are the abilities and knowledge needed to perform tasks related to technology, such as coding, data analysis, and IT management.
Employee retention is the ability of an organization to keep its employees and reduce turnover, often through engagement, compensation, and career development opportunities.
Explore more articles in the Technology category
