The UK is at the forefront of global financial technology. Second only to the US, the UK has an estimated 1,600 active firms in the fintech sector. And it’s growing. By 2030 the number of UK fintechs is set to double.
The Treasury commissioned, Kalifa Fintech Review published in 2021 cited that fintech jobs were a critical component in helping to maintain the UK’s position as a disruptive leader in global fintech.
The report estimated that the Fintech sector’s direct GVA contribution to the economy would be £13.7bn by 2030, with job creation contributing to 70% of this.
Achieving this means ensuring that UK fintech has a sufficient supply of domestic and international talent. Not only this, but we must also create an infrastructure that has the means to train and upskill our current and future workforce.
Employers agree. 67% of the UK’s fastest-growing fintechs consider talent to be a high priority.
As financial services organisations are embracing digital transformation and adopting new innovative technologies, the fintech sector requires a workforce capable of harnessing this potential.
The skills gap across all areas of tech and digital is well known. Research from the Korn Ferry Institute in Los Angeles suggests the skills shortage across the global tech industry will reach 4.3 million workers by 2030.
In Fintech though, these candidate shortages have been described as ‘chronic’. Some published reports have even described the problems of employee attraction and retention as a “plague” for fintech organisations.
Not only does the fintech talent shortage road-block organisational growth, but it also threatens the UK’s position as global fintech leaders.
Explaining the Fintech talent shortages.
Brexit and Immigration.
For many years, tech organisations have had the option to look abroad for fintech talent. The EU and India in particular, provided rich hunting ground for fintech organisations.
Brexit created regulatory uncertainty in many areas relevant to fintech. Talent was one of them. Firms must navigate the new immigration system for EU talent – whilst competing nations are aggressively legislating to welcome tech talent in.
The Great Resignation.
FinTech Magazine highlighted the Great Resignation of 2022 as one of the factors that had worsened the skills gap across the fintech sector.
What can fintech do to address the skills gap?
There needs to be a two-pronged approach that marries organisational reform and governmental support.
It has been suggested that businesses need to look inwards to address the fintech ‘skills gap’.
Embrace digital solutions.
The drive for improved business efficiency has been accelerated by recent global events. The development and adoption of technology, automation, in particular, is an important asset.
Automation improves processes, reduces costs, and saves staff hours of labour. It is also a key player in addressing the opportunities and threats in both fintech and Regtech processes.
For example, the UK Government has labelled financial crime as a ‘multi-billion-pound problem’. Automation can help banks and other financial services organisations play their part in addressing this global problem. The KYC (Know Your Customer) process automation can identify suspicious activity and risks sooner and with greater accuracy, than manual processes.
A growing number of businesses are embarking on transformation journeys. Training staff around these new technologies is essential for improving day-to-day engagement and outcomes.
Generative AI is making its way into many industries. Organisations must prepare for more roles to become an integration of humans and automation.
Address organisational diversity in fintech.
Research from EY and Innovate Finance reveals that women are being overlooked for top FinTech jobs. And if women reach these top spots the gender pay gap in the industry currently stands at 22 per cent.
Tech Nation reports that although ethnic diversity in fintech has increased from 12% in 2011 to 20% in 2021 the proportion of Black people working in fintech has remained static, at 3.1%. The growth in these numbers has been led by people from other underrepresented groups; professionals from Asian backgrounds in particular.
Breaking down barriers and ensuring greater inclusion within fintech must be supported and led by progressive workplace policies and activities. Bespoke training programmes and flexible working strategies, for example, encourage people from all backgrounds into the sector.
In turn, this will contribute to broadening the talent pool that organisations have to recruit from and increase the number of skilled workers in the industry.
Attraction and retention.
Employee experience has become an increasingly important factor in recent years. Many initiatives and policies can be implemented to create a better staff experience. Ensuring the implementation of a set of policies that benefit all staff will serve to attract new fintech candidates and retain the ones you have.
Personnel development through upskilling and reskilling should form another focus for businesses wanting to attract and retain employees. staff should be offered the means to work towards achievable progression.
Salary and reward.
The 2023 Pay Trends in the Fintech Industry report revealed that 2022 saw the highest salary budget increases in nearly 20 years. Despite this, companies are still struggling to fill key roles at every level.
However, economic uncertainty could lead to lower investment levels and economic growth this year. This will force organisations to review their workforces and be more cautious about increasing salaries.
Organisations will need to look beyond pay and take a holistic view of total rewards to create employee experiences that attract and retain the talent needed to drive UK fintech forward.
What does the UK government have to do to address the fintech skills gap?
The second arm of addressing the UK fintech skills gap lies in the hands of lawmakers.
The Centre for Finance, Innovation and Technology has warned that UK Fintech cannot rely on a stream of talent to flow into the country from overseas. Instead, the UK must be proactive in attracting overseas skills to the UK.
It’s warned that the talent battle is no longer just a race being run by UK firms. It has become a global race. We are up against people who want to hire our talent from places such as the US, Asia, and Europe.
The former Minister for Tech and the Digital Economy, Chris Philp remarked it was vital that the best and brightest from around the world can quickly and easily come to the UK. He said that in addition to the suite of visa routes available to digital businesses, the government are introducing new High Potential Individual and Scale-up visas. This will enable UK digital businesses to easily recruit from anywhere in the world.
Research, development, and skills.
In a speech at the beginning of the year, Rishi Sunak committed to increasing public funding in R&D. He pledged £20 billion to enhance the UK’s world-leading strengths in AI, life sciences, quantum, fintech and green technology.
This funding is to ensure that the UK has access to the skills and funding it needs to innovate, develop, and grow. The Government will work with schools, universities, further education providers, and businesses to deliver the digital skills that the economy needs. This includes apprenticeships and skills training throughout people’s careers.
The Department for Digital, Culture, Media and Sport is already funding 1,000 PhDs in artificial intelligence and 1,000 scholarships for master’s degree conversion courses in AI and data science.
The growth of the UK fintech sector is reliant upon those who work within it. The research reveals that there needs to be a joined-up and proactive effort by organisations and the UK government to harness the economic potential within the fintech sector.
We must focus on creating a pipeline of fintech talent by supporting young people with access to employment opportunities within this exciting sector.
Meanwhile, we must retrain and upskill the current workforce by ensuring access to blended learning courses at high convenience and low cost to employers. Fintech has the potential to create new jobs across the UK, but support will be needed for the current workforce to access knowledge on emerging technologies.
We must welcome incoming global talent and nurture those already here. Foreign talent represents around 42% of UK fintech employees. To remain a global leader in fintech, the UK needs to strengthen its position on immigration or risk more losses in its human resources.
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