According to a report commissioned by the UK’s Treasury, Britain’s financial services system is experiencing an existential skills crisis. Why? As digital start-ups have moved quickly to offer desirable working benefits such as flexible hours or learning and development opportunities, financial institutions have been comparably slow to react to new workplace demands. As such, they have failed to shift a reputation for being ‘slow’ and ‘stuffy’ which stands against them when hoping to fight off competition for technology talent.
To make up lost ground, those in financial services have been re-positioning themselves as ‘technology-first’ to remain relevant and attract talent. JPMorgan Chase were the first to kickstart the trend in 2016, but have been closely followed in recent years by ING, Citi and Barclays. This move is both an attempt to find a solution to the skills shortage and a recognition that without a digital strategy, upstart banks such as Monzo and Starling may steal their lunch.
However, a crucial point to note is that it’s not just the financial services industry that is experiencing a shortage of technology professionals. Retail, manufacturing, IT and healthcare are all fighting to recruit from the same narrow pool. Amidst this competition, financial services must find a way to stand-out and create an enticing home for technologists to bring their talents and skills. Otherwise, they could face a decade or longer in the wilderness of innovation, or more existential threats.
Adopting the right mindset
A global study conducted by CNBC and Randstad found that just 10% of millennials and Gen Z are interested in a career in finance. Therefore, before banks and financial institutions jump into recruitment strategies, they need to evaluate why graduates, and more importantly those with a background in technology, are shunning the financial services industry.
According to CNBC’s survey, graduates are looking instead towards technology companies for their innovative project work, ‘can-do, fail-fast’ mindset and purpose-led culture. It’s understandable, therefore, why banks such as Citi or ING have moved to brand themselves as technology companies with a ‘banking license.’ A good first step for individual companies, but the industry as a whole needs to go further. It needs to embrace a culture that encourages creative autonomy and digital side-projects, while accepting and learning from failures.
Such a mindset leads to a ‘daring to fail’ environment that completely detaches the industry from its reputation for endless compliance paperwork and processes. Instead, it suggests that it’s ready to embrace new ideas and provide space for technologists to be innovative and make their mark on the company. It’s also a sign of trust. As found by the University of Birmingham, workers given greater agency and support in the working environment positively impacts job satisfaction. It’s here that financial institutions can champion technology talent and become an appealing career prospect.
Learning is a key differentiator
A staggering 42% of employees believe that learning and development is the most important benefit when deciding where to work; it even ranks above private health schemes and flexible working allowances. Yet, just 54% of UK organisations believe they will spend more on workforce training programmes over the next 12 months. This presents a unique opportunity for those in financial services to differentiate themselves from other markets and promote learning as a selling point.
That being said, learning and development needs to be implemented correctly for successful returns, but it can often cause in-house confusion over remit and responsibility. Traditionally, human resources handles these types of activities, but in the context of digital transformation and appealing to technology talent, this needs the committed engagement of the CTO and CIO and their technology teams. They are more likely to understand how technology can play a critical role in the future of financial services and the opportunities that new talent will be looking for. So it’s crucial they are internal champions of technology skill development strategies.
Many IT leaders will not have experience in best practices to support internal training and skills development and how to ensure its success. This is where external, technology partners, like Pluralsight have a critical role to play. We spend a lot of time educating and advising on creating a healthy ‘culture of learning’ that engages employees in bettering themselves. In a partnership forged between HR and technology, we can act as a trusted consultant.
Broaden your criteria
In the war for talent, most industries are so focused on recruiting from such a narrow technology pool that they miss a trick. While it remains true that industry professionals often have a background in computer science, maths or physics, this doesn’t mean that talent with an education outside these areas should be ignored. In fact, as they are digital natives, they are just as likely to be interested and capable. These employees will just need careful nurturing and development, guided by accurate measurement tools and sustained investment by their employers. For financial institutions, this can be a key weapon in their armoury and a competitive differentiator.
Moreover, from looking at the most popular technology skills on our platform, it’s clear that companies are finding success in this approach. In 2019, it’s the foundational skills which continue to come up, be it Java in software development, HTTP in IT operations or CISSP in security. This shows that not only is there an interest in learning these skills from those with a non-technical background but it’s proving a successful vehicle for digital innovation. Nomura Bank, for instance, used rudimentary Python to build and transition to a cloud-based system, helping its team deliver a more efficient customer service.
In a competitive environment where multiple industries are recruiting from the same talent pool, those operating in financial services can no longer afford to carry a ‘slow’ and ‘stuffy’ image. As shown by the Treasury’s commissioned report, it’s caused an existential skills crisis that may hinder innovation and lead to underwhelming financial performances.
Banks and financial institutions still have an opportunity to make themselves stand-out and appeal to the talent they desperately need — those with a background in or passion for technology. Firstly, they must recognise that the working environment needs to change. Technology talent is demanding creative autonomy and room to fail. While this might sound daunting, innovation often arises from failed experiments.
Second, learning can be a competitive differentiator. Not only does it align to what new joiners are asking for in working benefits, but it can help upskill non-technology talent to deliver on digital projects. For those in financial services, it’s a win-win and a chance to put themselves back on top.