Anthony Sherick, MD of specialist jobsite, Technojobs, assesses how banks are competing with Fintech companies for the best technology talent – but is there enough to go around?
Monday revealed new research showing firms in London’s financial district created more than 3,030 new jobs in March 2015, 25 per cent more than the same time last year, as banks continue to look to enhance their technological capabilities and strengthen their deals teams amid strong M&A activity.
One of the main reasons for this upturn in hires is the decision by investment banks to increase investment in technology staff, in order to strengthen their own tech divisions and to replace the staff that have moved on in favour of London’s growing financial technology sector. The latest figures from Accenture released last week revealed global investment in financial technology ventures tripled from £2.72 billion in 2013 to £8.18 billion in 2014, with Europe spearheading the trend as the fastest growing region in the world. The reason London has become the global Fintech capital is partly down to the fact that people in the UK are quick to try new services and trust online services, as well as its strong financial services sector.
However, over the last few three years or so, the investment banking sector has faced a number of challenges, impacting its ability to attract talented graduates. These banks continue to find it difficult to secure a pipeline of talent through the company because of the number of people staying in the role for a limited time, before potentially being attracted to life in a tech start-up. The banker is no longer the coolest person in the room – it’s now the one who can say they work for a tech start-up, which may afford them the more tangible possibility of quick progression and proximity to management.
There is no doubt that investment banks and Fintech companies are locked in a war for the best technology talent, desperate to invest in IT to keep up with the digital revolution. In this sense, the technological advancements are impressively advanced in financial services, which is both an opportunity and a threat for banks. As Accenture’s MD, Julian Skan, overseeing the FinTech Innovation Lab London, recently said, “Fintech is empowering new competitors and start-ups to move into parts of the banking business but, paradoxically, it is also helping banks to create better, more convenient products and services for their clients.”
But while Fintech is to an extent inspiring cooperation between traditional banks and innovative start-ups and technology businesses, there is only so much IT and technology talent to go around, and this is where the problems lie. More than 44,000 people are now employed by FinTech companies across the UK, and in order for the growth we’ve experienced in the last two years to be sustained over the long-term, it is imperative that businesses have access to the top talent. The IT sector is suffering from a skills shortage as it is, so we have an already depleted selection of candidates being picked off by hungry banks and a growing number of Fintech companies – a real issue of supply and demand.
For CEO’s desperately searching for talent, the most important consideration for them is to think ahead and aim to future-proof their business. In the scheme of all the decisions a CEO has to make on a daily basis, it’s fundamental to have a forward thinking plan in recruitment to ensure your business is not missing out on the best talent available to grow your company.
This is where companies can to an extent help themselves – it is much easier to grow your own talent than it is to parachute someone in with no experience of your company culture, or wait for the perfect candidate to come along. Ideally, businesses need to hire at an earlier stage if we are to solve the current shortage. Banks and Fintech companies alike should seriously consider taking professionally-competent individuals and training them on the job, rather than waiting for the right experienced hire and throw them into the job with no practical experience. Even if companies do decide to wait, the war for talent will see demand continue to outweigh supply, so I advise decision makers to address the issue by hiring capable IT people and moulding or even re-training them up in specific skills, even through mentoring or apprenticeships. The initial costs for businesses are slightly higher up front and the training process does require effort, but the investment is well worth the reward you’ll receive in return. Fundamentally it is the people alongside the technology that will provide the long term competitive edge for any business.