May 19, 2020

Banking on digital talent: the fintech skills crisis

David Rai
4 min
Banking on digital talent: the fintech skills crisis

A 2016 study by KPMG and H2 Ventures revealed London hosts 17 of the top 50 international fintech firms. $564 million of funding was invested in British fintech start-ups in the first few months of 2017 alone. Despite the Capital’s impressive position, much of the talent employed by fintech companies still comes from outside of the UK. With Brexit looming, the London tech scene is expecting a mass exodus of its talent that will significantly widen the skills gap and make it hard for fintech innovation to sustain in the UK.

Demand and supply

A decade ago people were still stashing money around their house for “safe keeping” and it was rare for someone to use mobile and online banking. Ten years on and technology is transforming finance at a pace many organisations are struggling to keep up with – but must catch up to. With companies like Amazon providing customers with a frictionless retail experience, and Airbnb doing the same for tourism, consumers demand seamless services in every part of their lives. Banks included.

JPMorgan Chase is one of many world-leading financial firms toallocate a significant proportion of its IT budget to digital transformation. For its 47 million customers – responsible for $5 trillion of daily payments – the firm is constructing software platforms that cut across the company's retail, wholesale and investment banking businesses. The strategy, including APIs and microservices, will produce virtual assistants and introduce Artificial Intelligence (AI) to improve customer service.

With banks and financial services firms across the UK kickstarting similar large-scale digital transformation projects, there is one clear problem. There just aren’t enough employees with the right tech skills to get the job done.

The Brexit effect

A recent Sparta Global survey of leading technology professionals  - representing the technology, finance, media, retail, public sector, charity and legal industries – found organisations across the board are suffering from skills gaps: graduate level (38%), mid-level (55%) and management level (38).

Software development was identified by 52% of respondents as a missing skill, making it the most sought-after area of expertise. 40% recognised a gap in test automation skills, DevOps (38%), BA/PMO (19%) and manual testing (16%).

According to research by Innovate Finance, the fintech sector now employs more than 76,500 people across the UK. By 2030 - a number projected to increase to more than 100,000 by 2030. With a recent Raconteur report confirming 42% of fintech workers are drawn from outside the UK, the sector is highly exposed to changes in the immigration settlement post-Brexit.

The inability to import qualified workers from outside of the UK - to bridge the country’s own skills gap - will pose a danger to the UK’s future as a competitive place to set up a fintech business or base a European hub.

Almost half of the survey respondents claim Brexit has already reduced access to talent from outside the UK, while one in four contractors with a non-UK passport admitted the threat of more immigration restrictions had influenced their decision to leave Britain.

Many fintech businesses rely on fast developing technologies to maintain competitive advantage. For companies to move quickly, they need to have access to the right talent in the right geographies.

A ready-made solution

It is too early to draw definitive conclusions on the impact of Brexit, but companies are already assessing the implications of fundraising, talent acquisition and talent retention. Only urgent action from industry, teaching establishments and the Government can prevent the skills crisis from damaging the UK’s productivity and economic competitiveness.

Disruptive and “cool”, companies in the fintech sector should not find issues when hiring young talent, but awareness of the industry remains low. Universities and industry leaders need to work together to nurture a better understanding of new-breed finance companies and the opportunities associated with working in fintech. Investing in young talent provides an opportunity for companies to mould teams to fit their established company culture and introduce fresh perspectives on problems and ideas.

This is where training academies – a stepping stone between higher education and work – can prove to be another interesting solution. Putting graduates through relevant, work-related training programmes could be a credible addition to a university education and the gateway to a skilled UK workforce. Specialist training academies can upskill young people through specific job-related training and prepare them to hit-the-ground running. Hiring young people from training academies that offer these services means an organisation is hiring an individual they know has the knowledge to succeed.  

Finding, training and retraining talent could be the only means of safeguarding the UK fintech industry post-Brexit. It is time for the UK fintech industry – and its companies - to stretch themselves, change and evolve, spending the time today to shape the future leaders of tomorrow.

David Rai is the Chief Executive Officer of Sparta Global

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Jun 8, 2021

UK office space slashed as hybrid working looks set to stay

Kate Birch
3 min
As more UK firms announce a hybrid way of working, new research suggests a third of businesses will reduce their office footprint by more than 30%

With hybrid predicted to be the working model of the future, and businesses both large and small announcing that WFH will continue for employees into the future, the traditional office space is being re-thought.

Businesses are both questioning how much space they need for a hybrid working future, especially if it means they can potentially save money, and what form that space should take.

UK firms slashing office space

Back as early as February, HSBC – whose real estate footprint currently stretches to around 112 football pitches worldwide – said it would be cutting its post-COVID office space by half globally and by 40% in London over the next few years, as it looks to implementation of a hybrid working model in light of the pandemic.

Lloyds Bank followed suit. Following an internal survey where 77% of employees said they wanted to continue to work for 3+ days a week post-pandemic, the bank announced it was also moving to a hybrid model, and so looking to cut its office space by 20% over the next two years.

In fact, the latest research from consulting firm PwC reveals that a third of organisations surveyed (258 of the UK’s largest companies) believe they will reduce their office footprint by more than 30%.

The findings of PwC’s Occupier Survey indicate there is likely to be a sizeable fall in occupied office space with half of executives surveyed saying that despite taking into account mass vaccinations, employees will continue to work virtually 2-3 days a week.

And companies continue to announce the hybrid working model for their employees. Accountancy firm EY has just announced that its 17,000 employees are moving to a hybrid way of working, WFH for at least two days a week. This follows PwC which in March said workers could stay at home for half the time and KPMG which this month said it would expect employees to only work two days in the office every week.

More collaborative work spaces

However, what’s also clear from PwC’s research is that the role of the office is not going to disappear completely, but instead adapt to a new way of working, with half of all organisations with more than 100 employees saying they have a real estate and workplace strategy that considers the long-term impact of COVID-19.

“We may see an increased demand for flexible space as many businesses operating models may well need that option if holding dead space is to be avoided,” says Angus Johnson, UK Real Estate Leader at PwC UK.

According to the survey, more than three quarters of respondents said they are likely to reconfigure existing office with 43% of financial services firms stating that they are extremely likely to do so as a result of the pandemic.

“It’s also clear that the nature and purpose of office space is going to change. As occupiers seek new, different space to meet their accommodation needs, environmental aspects will be increasingly important. If the real estate sector is to truly succeed as a more dynamic, greener industry it’s imperative that creative thinking comes to the fore.”

And companies are already thinking creatively how they can utilise office space in a hybrid future. So while HSBC is cutting a significant amount of office space, it is not downsizing its prestigious Canary Wharf headquarters, and instead reimagining the space. In April, CEO Noel Quinn announced the firm was embracing an open plan floor, with no designated desks or private offices, and instead using hot-desks in line with the future hybrid working style. “My leadership team and I have moved to a fully open-plan floor of the building in east London with no designated desks,” he said on LinkedIn.

Lloyds also reported it was adapting its office space, so that rather than individual offices, it will have a more collaborative workspace. And just last month, KPMG announced it too was ditching desks and individual offices, and replacing them with meeting rooms and conference halls for a more collaborative workspace.



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