Banks have had trouble luring IT talent over the past several years due to a national labour shortage that has been made worse by the pandemic and the “big resignation tsunami,” according to Poorani Jeyasekar, director at consulting and investment firm Klaros Group. However, Jeyasekar added that traditional financial institutions now have a great opportunity to hire fresh candidates with tech and finance abilities due to the recent wave of fintech layoffs.
A slowdown in venture capital funding into the fintech sector has led to a wave of layoffs over the past few months as a result of high interest rates, rising inflation, and falling stock market estimates. According to Fast Company, online mortgage company Better.com has eliminated 5,000 staff since December. After its initial round of layoffs conducted over Zoom went viral in December, the company faced intense backlash.
According to a business spokeswoman last month, Amount, a Chicago-based provider of banking technology that aids banks in facilitating buy-now-pay-later financing, has reduced its personnel by 18%. The decision to reduce staff was made in response to the present macroeconomic environment, according to Amount CEO Adam Hughes.
In a statement about the layoffs, Hughes stated they have chosen to make certain pro-active modifications to safeguard Amount’s capacity to prosper for years to come. The workforces of PayPal, Klarna, Bolt, and Coinbase, among other fintech and payments businesses, have been reduced recently.
In light of the layoffs, Jeyasekar advised banks to think about employing engineers with expertise in artificial intelligence, machine learning, and data science. She continued, FI’s are sitting on a wealth of data that resides within segregated business units today. Bank CIOs may have a fantastic idea, but they may not always have the talent to carry it out.
Fintech’s have created data models for a variety of purposes, including anticipating client behaviour, operating efficient processes, and credit underwriting. CIOs can take advantage of this chance to appoint AI and ML talent to carry out their plans.
Banks should take into account the customer knowledge, staff with fintech experience may bring to a bank as more fintech talent becomes available, according to Jeyasekar. She claimed that traditional financial institutions have lagged behind in terms of personalising financial services and products. The grasp of client pain areas and customisation by fintechs is outstanding. Strong product executives that pay attention to customer behaviour and pain issues while collaborating with the technology team to create individualised solutions are the key to the success of the fintech industry.
According to her, traditional banks can take advantage of this chance to hire professionals who have a thorough understanding of millennial and Gen Z consumers and who know how to tailor goods to their needs. Banks should think about integrating fintech expertise into their innovation teams in order to help the organisation find more effective working practises, according to Jeyasekar.
As per her, the majority of traditional financial institutions have established distinct innovation teams to develop brand-new goods and services that compete with fintech’s in the market. The innovation team is divided into two groups in order to separate the traditional methods of working from the innovative ones, to allow teams to freely explore and gain, and to foster an inventive culture. Talent in the fintech industry is accustomed to working in teams that are collaborative and inventive, where new methods of doing things are valued.