Viren Patel | Senior Industry Advisor | Financial Services & Insurance | Workday | mail me |
Conversations about the talent competition in financial services have persisted for many years. Competition to attract skilled individuals has always been intense, with high demand for talented professionals. This competition has intensified recently as hiring activity accelerates to meet today’s significant challenges.
In 2020, McKinsey’s report on the Future of Work in Europe predicted job growth of 6% in financial services and insurance by 2030. This prediction largely holds true today. However, the industry has undergone substantial changes since 2020, redrawing the battlelines in the ongoing war for talent.
A rapid pace of change
The financial services sector has faced relentless change over decades. Economic headwinds, government policies, regulatory upheavals, and mergers and acquisitions have significantly shaped the industry.
In recent years, seismic shifts, such as the global pandemic, have accelerated flexible working practices and altered consumer behaviour. Now, the sector is transforming even more rapidly, driven predominantly by technological advancements.
The impact of technology
The COVID-19 pandemic spurred the adoption of digital banking, shifting many consumers to online and mobile platforms. This transition has led to heavy investments in digital infrastructure and cybersecurity, creating an acute need for skilled professionals to maximise returns.
Open banking regulations, such as PSD2, have also catalysed innovation. These regulations allow third-party providers to access customer-approved bank data, fostering the next generation of financial services.
Fintech companies have emerged as key players, offering innovative solutions like digital wallets, peer-to-peer lending, robo-advisors, and blockchain services. These companies are solving real-world problems, uncovering opportunities, and disrupting a previously staid sector.
Fintechs are generally more attractive to highly skilled, creative professionals than traditional financial service providers with less inspiring visions for the future.
AI – the great disruptor
Artificial Intelligence (AI) is reshaping financial services, particularly in how data is used to address business questions and enhance customer solutions. AI is also changing how skills are deployed.
While AI can replace repetitive tasks like reconciliation, new skills are essential for leveraging AI’s potential and planning for long-term organisational success.
Professionals skilled in AI often prefer fintechs over traditional financial institutions. Fintechs are seen as technology companies, making them more appealing to tech-savvy talent.
What does talent competition in financial services mean for hiring?
Navigating these changes requires a new hiring strategy focused on skills rather than roles. This shift represents a significant mindset change for financial services organisations.
Instead of considering broad talent needs, companies must identify specific skills required for future growth. For instance, they must ask: What skills are missing in a team or function? What technological skills will be essential to achieving long-term goals?
Hiring for skills ensures agility and flexibility, which are critical for competing with technology-driven market entrants and meeting evolving customer needs. This approach also positions organisations to adapt to the unpredictable skill demands of the future.
