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The Overwhelming Tech Talent Shortage in Financial Services

Handwriting Talent Needed on notebook with laptop keyboard
December 22, 2016
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Why Can’t the Financial Sector Find Tech Talent?

The Financial Industry Is Challenged to Find the Right Tech Talent

Few businesses in the financial sector feel that finding and hiring qualified IT staff is an easy task, and the viewpoint is supported by industry data.

76% of financial businesses have created new IT roles in the last two years, but the chore of finding the right talent continues to be arduous. 50% of bank and insurance provider CIOs report that hiring qualified IT staff is challenging, according to the Peak 10 Financial Services and IT Study: Tackling the Digital Transformation.

There’s a noticeable tech talent shortage in the financial industry, and the trend is persisting. It’s not that banking and insurance aren’t working on interesting tech initiatives; mass digitalization is dominating both markets as online portals, mobile apps, and big data projects support the financial industry’s ambitious goals for growth.

Unfortunately, most other industries participate in technological innovation at a significantly faster pace than the financial industry, which is more attractive to the typical IT professional motivated by new technologies and interesting career opportunities. Other industries are absorbing the bulk of qualified IT talent, leaving the financial sector shorted.

The good news is, we expect financial services to catch up. The rate of innovation, given global digitalization, will have to increase, and with the right cultural positioning and continued efforts to modernize, the financial sector can find and keep quality tech talent.

Why IT Professionals Aren’t (yet) Jumping at the Chance to Work in Financial Services

There are a few reasons why hiring and retaining IT talent in the financial industry is not always an easy feat:

  1. Candidates may feel that other industries have more to offer by way of innovation and exciting career opportunities.

    It is difficult to entice tech enthusiasts with roles that may deal with legacy technologies and do not necessarily guarantee hands-on experience with new solutions. The financial industry manages longstanding technologies that support day-to-day operations, such as core systems—many of which are aging and being phased out, but the criticality of their functions make them necessary. Technology professionals don’t typically view dealing with old technology as an exciting job function, especially given the rate of innovation in the overall tech world today.

    Further, the tech world is being dominated by companies like Google and Facebook, known for their flexible, forward-thinking cultures and innumerable opportunities for innovation. Pitted against organizations like these, recruiters may feel hard-pressed to make financial services IT positions seem inspiring for tech professionals on the hunt for a job.

  2. Compliance requirements make IT adoption take longer and reinforces a lengthy approval process.

    There are some really exciting initiatives taking place in the financial services industry that are truly transforming the customer experience—but adoption in financial services tends to move relatively slowly.

    Greater, and ever-increasing industry and government regulations, coupled with a very complex approval process, can make getting anything done at a financial organization rather challenging. All projects have to be done in compliance with regulations, and all changes have to undergo approval from a long list of decision makers.

    While the financial industry is learning to embrace mass digitalization and all of the projects it comes with, not all tech candidates want to contend with a comparatively slow adoption process, or jump through hoops to work with new technology.

  3. There’s too much to do and not enough people.

    The overwhelming amount of work to be done where financial services is concerned is somewhat of a dichotomy when considering the slow adoption rate. To grow, the industry has to continue to develop digital systems for every aspect of business operations, from customer portals and apps to digital marketing, data analytics initiatives, and business intelligence (BI); everything must go digital. But for everything to go digital, the financial sector needs brilliant tech experts and faster adoption.

    The need seems to be taking the form of a vicious cycle—the approval process is long and complex, yet financial organizations need to successfully execute a myriad of IT initiatives. Their list of goals and objectives are growing faster than they can be approved, and the IT professionals who are working in finance can’t keep up with demand.

Nailing Down IT Talent—and Keeping It

While data does confirm that the financial industry is having some difficulty attracting and retaining qualified IT talent, that doesn’t mean the future isn’t bright. A number of exciting industry drivers are taking place which are sure to make the industry a more appealing option for tech experts.

Emphasizing the influence digitalization is having on the financial sector and the resulting technology projects to potential candidates will be a step in the right direction:

  • Mass digitalization

    Financial consumers want information at their fingertips, and they have a long list of demands. Banks and insurance companies must be technologically innovative enough to meet those demands successfully, so online portals, mobile apps, and data-driven capabilities are taking over. Mobility, online portals, data analytics, robotics and automation are all key initiatives IT leaders are using to help transform their business.

  • Making technology enhancements

    The prevalence of core systems and legacy technology is starting to take its toll. The financial industry is beginning to phase out aging systems for more robust, flexible infrastructures, which means that making technology enhancements is becoming a key initiative. Access to state-of-the-art technology is a surefire way to a tech enthusiast’s heart.

  • Building new applications

    Given the dominance of online portals and mobile apps, financial organizations are more commonly writing their own applications in-house, which means two things:

    1. There is, and will continue to be, a need for developers.
    2. More innovative technology solutions, such as cloud solutions, will begin to make sense for financial organizations.

    These are the kinds of projects that make IT roles interesting: creating apps that truly make an impact and having the opportunity to work with leading-edge technology that will support new apps are big motivators for IT talent.

Digitalization as Motivation for IT Experts

Innovation may have been slower in the financial sector historically, but that trend is changing, and financial organizations will continue to offer interesting tech roles. Emphasizing all of the innovative changes taking place in the industry will be an important objective in shifting the tide of attracting tech talent, as well as creating and exhibiting progressive, responsive company cultures.

More Financial Services Feedback, More Knowledge

Peak 10’s Financial Services and IT Study: Tackling the Digital Transformation generated considerable amounts of feedback on IT talent and future plans for the financial sector, as well as considerations for every conceivable area of IT. Find out what your peers are up against, and how you can apply current trends to improve your IT organization. See the Peak 10 Industry Spotlight: Financial Services and IT. Or contact us today at www.peak10.com/contact-us or (866) 473-2510 to speak with one of our experts.

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