Banking and FinanceIssue 01 - 2024MAGAZINE
GBO_ banking's tech skills

Addressing banking’s tech skills gap

Although banking is widely seen as a highly lucrative industry, money cannot solve this issue on its own

According to research conducted by Deutsche Bank Research, the financial services industry is being held back by a persistent talent gap and a lack of digital skills. The financial services business is perceived by 75% of its employees as being ‘held back’ by gaps in the workforce and a deficiency of digital capabilities.

This is supported by recent data by FDM Group, which discovered that 75% of respondents thought their company had trouble filling positions needing digital skills. Furthermore, over 90% of employees think that having better digital abilities will help their company’s adoption of new technology.

In order to find out how the much-discussed skills deficit in the broader digital sector is affecting the financial services business, FDM Group polled 250 decision-makers at UK banks and financial institutions. Despite the problems that still exist, a large number of respondents expressed satisfaction with the work their business was doing to find a solution: 86% of them agreed that staff training and digital skills are a top priority for their company, a percentage that rises to over 90% among female respondents. The FDM Group also noted that around 58% of financial services staff believe they’ve been denied a promotion due to a lack of digital skills, and around 70% of younger staff those between age 18 and 24 feel particularly neglected.

Tech skills essential right across financial services

“Tech skills are essential across all industries, especially financial services with the increasing adoption in areas such as AI and analytics. A lack of tech proficient staff is holding back the industry from effectively implementing new technologies and is ultimately stunting the growth of many financial services institutions,” Sheila Flavell, Chief Operating Officer of FDM Group said, FinTech reported.

“While workers may believe their organisations prioritise training, clearly more must be done to support those wishing to gain new skills and a new approach should be taken to ensure individuals are being trained, skilled and reskilled in the necessary areas. Technology can provide huge benefits to organisations, allowing processes to be made easier, services to be made more efficient and operations generally to become more seamless. For the UK to achieve its goal and cement itself as a global science and technology superpower, government and businesses must come together to re-think their approach to both educating and training the nation in digital skills in order to maximise the benefits of the technology that is available. Providing access to greater training and upskilling, through means such as outsourcing or graduate programmes, can offer a wider pool of staff the opportunity to improve their skills and plug the skills gap within the industry,” Flavell added.

What’s leading to this tech skills gap?

The fact that there are many other industries vying for these recruits—including consultancy, IT, aerospace, and even the automobile sector— and experts think this may be the primary contributing cause. Experts discovered that just 13% of all unique job advertising for tech expertise is related to consumer banking. Professional technologists can find many different businesses to work in these days, and some may find these options more exciting or fast-paced than jobs in the banking industry.

Furthermore, engineers frequently leave banking jobs quickly after accepting them. For example, experts discovered that the majority of technologists who leave the tech sector to work in banking eventually make their way back to the tech sector. In actuality, 7,098 people left banking to rejoin the tech industry, despite 7,356 people moving into consumer banking over the previous five years. This high turnover rate for tech workers in banking demonstrates how a major problem that is contributing to the skills shortage in this area is employee retention.

Moreover, although banking is widely seen as a highly lucrative industry, money cannot solve this issue on its own. There are currently too few qualified applicants willing to switch to banking, despite consumer banks’ high compensation packages (there is a 36% year-over-year increase in advertised salary post-pandemic paired with a 19.5% uptick in similar salaries compared to other sectors).

Strategies to close the tech skills gap

What can you do as a leader in your field to close the skills gap in digital technology? Check out some of the strategies.

Encourage current workers to upgrade their skills

Executives understand that the most effective way to close the skills gap is through skill development. By offering professional development opportunities, you can give your team the financial and technological know-how they need to be competitive for a very long time. For example, you could fund cybersecurity training for staff members in every department to make sure everyone knows the fundamentals and can help maintain the security of your data. Implementing such measures will not only improve the security of your organisation but also cultivate a climate of safety and trust.

Increase output while maintaining retention

Creating a feedback system that promotes candid communication of ideas and suggestions is one method to raise output without negatively impacting job satisfaction. Furthermore, you could encourage staff members to take charge of their own professional growth and education by providing rewards for reaching predetermined targets. Their abilities will grow as a result of this strategy, which will also encourage engagement and a sense of autonomy, increasing satisfaction and loyalty.

Understand the priorities of job candidates

If you want to attract top talent, it’s critical to evaluate what your rivals are offering and comprehend the objectives and priorities of the candidates you currently have on board. Flexibility, including the option to work remotely and on their own schedule, is highly valued by today’s job seekers. Offering distinctive benefits like plenty of vacation time, generous family leave policies, and flexible work schedules that meet the demands of modern employees can help your business stand out from the competition. By fostering a positive work atmosphere, these benefits not only aid in luring in the top applicants but also raise retention rates.

Accept diversity and inclusion

You’re losing out on excellent opportunities if the candidates in your hiring pools are limited to one particular kind of applicant. Don’t restrict your candidate pool to the usual resources you may have previously employed. Consider interacting with new audiences as an alternative. Finastra organised a global hackathon in 2021 with the goal of eliminating AI bias in lending, and it encouraged teams led by women and people from diverse backgrounds to take part. Nearly 80% of the 600 hackathon teams from over 50 countries were headed by female participants. It takes proactive measures to find and interact with such talent. By actively seeking them out, you can convey to potential employees that your organisation respects different viewpoints and is probably a safe place to work. The results can be invaluable in terms of innovation and employee satisfaction.

Above all, it’s critical to keep up with the latest developments and trends in the financial sector. The unpredictability of disruption will put unprepared businesses at a significant competitive disadvantage. One can start addressing the skills gap and make sure one won’t lose out in a competitive landscape by remaining connected to the business’s current needs and knowing where talent is and what it wants.

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