If FinTech firms agree on anything, it’s that identifying and retaining the right talent is absolutely crucial to every company’s success and growth.
At every stage – whether a company is just starting up or it has been in the industry for 20 years – tapping the Fintech talent pool can present challenges.
The general consensus amongst those in the FinTech industry is that there is an abundance of professionals looking to join the hype. As the FinTech sector grows, people from all walks of life are eyeing up opportunities to become a part of it.
Globally, investment in FinTech increased a significant 75% in 2015, with European investments more than doubling compared to the prior year, according to research from Accenture.
Discussing the statistics, Accenture’s financial services chief executive Richard Lumb said, “the drive for FinTech innovation is spreading well beyond traditional tech hubs.”
In the UK alone, the FinTech industry consists of over 60,000 staff according to a report authored by EY in 2014, and this is increasing significantly.
Statistics show that investments in the banking and payments sector in the UK accounted for 46% of the total country’s investment last year. The demand for FinTech talent is moving as quickly as the growth of the overall sector.
The Government has estimated that by 2020 there will be 100,000 employed within a Fintech company in the UK.
“There are plenty of individuals moving between Fintech start-ups, as well as fresh faces from university campuses to feed this particular need,” according to director at Proviti, Derek Cummings.
Proviti is a global business consulting and internal audit company, which retains over 3,500 staff across technology, litigation, risk compliance operations remits.
It seeks to “hire and develop diverse thinkers, from recent graduates to experienced professionals,” to advise over 35% of both the FORTUNE 500 and Global 1000 corporations.
Cummings explained the phase of growth a FinTech company will determine the hiring and retaining challenges it will face, and there are many a long the way.
So, what’s so great about being a part of the FinTech sector?
Parth Desai, chief executive officer at Pelican, explained working for a small firm in the FinTech sector is exciting for all involved.
“Things happen very quickly at small and agile FinTech firms, and the staff witness the effects of their contributions which is very exciting to be a part of,” Desai explained.
Pelican employs artificial intelligence to create solutions for corporate and bank sanctions compliance. It has been going for over 20 years, with clients all over the world and three main office locations.
The company looks for confident, focused, knowledgeable and success-driven individuals when hiring new staff.
Desai believes younger generations are constantly looking to participate in something new and different, which is exactly what FinTech can offer.
“FinTech is on top of the latest technology, providing new opportunities for people which helps us develop and improve our products constantly and more effectively,” he said.
Caroline Langron, managing director at Platform Black, echoed Desai’s thoughts on the reasons behind the sector’s talent growth.
“Sometimes people forget how exciting it is to work for a small company with big ambition. In small companies you can make a real difference and you are not just one of a thousand,” she said.
“There’s a huge opportunity in being part of this world – it’s a very crowded, dynamic and innovative market, which offers a deep learning curve to candidates.”
Platform Black describes itself as a marketplace for invoice trading, with over £140 million invoice trade value to date.
In 2015, the company saw a turnover of £44 million, which it attributes to delivering fast finance solutions as well as diligent risk management.
Langron added it is not just millennials’ looking to move into FinTech.
“Most have a banking background and are frustrated by that world, so they’re excited to get into this hot, highly innovative new world of alternative finance,” she said.
Pelican’s Desai added that it’s about people being able to use their knowledge and skills to make a difference, whilst not being ‘bogged down’ by a large corporation.
Growth phase
As Proviti’s director Cummings highlighted, the difficulty in hiring staff for a FinTech firm relates to the growth stage of the individual company, as requirements change and adapt.
Those in the start-up phase need only a handful of like-minded individuals with technical skills to develop the idea into a design or prototype to engage investors.
Companies appear to be more successful at this stage of recruitment.
The challenges are first seen at the ‘hyper-growth’ phase, as it reaches sufficient investment to launch product. By this point, the company needs the right talent to build the product.
Cummings explained: “If we narrow our considerations to the London Fintech scene, there is sufficient investment capital out there chasing ‘the next big idea’ to provide the required level of funding to get ideas off the ground which creates the demand.”
Identifying the right individuals to form an effective team once achieving sufficient investment is more problematic.
Companies hiring at this stage of growth are looking for a more particular skillset to cover all of the bases needed to succeed.
Individuals must be able to commit themselves to the company and to each other at least through to the end of the development phase.
With the onslaught of interest and growth in the overall industry, Platform Black said finding technical talent is not so difficult, but finding someone with the right attitude can be a challenge.
Platform Black’s Langron explained: “It’s not difficult to find talent but sometime we understand the importance of partnering with the right resources if looking for a specific talent.”
Chief executive officer at Pelican, Desai, agreed that identifying those with the right attitude is of great importance, but capability and experience should not be underestimated.
“Initially, it’s about ensuring the candidate has the capability and ability to carry out the job with the right approach, whilst doing things independently and leading the way,” Desai said.
“A candidate must be able to adapt in a fast-paced, ever-changing environment. They must be confident in learning new ideas applying them quickly, because that is how the FinTech industry works,” he concluded.
However, it would appear that overall interest and enthusiasm to work within the space – or with innovative new FinTech products – trumps all other requirements for most firms.
Pelican’s Desai explained: “Of course, we look at various projects a candidate may have worked on in the past and make decisions based on ability, but Pelican looks for candidates who is excited by the idea of doing new things, that is our approach, that is what we look for.”
For start-ups entering new growth phases, commitment and ensuring the entire team can work well together is imperative.
Building a team that will gel together, while at the same time creating a culture that will deliver the right result in a challenging timeframe is an enormous challenge.
Proviti’s Cummings revealed how crucial this can be some firms: “A number of business fall by the wayside at this stage if they can’t build an effective team which combines the right blend of technology skills, business acumen and industry knowledge.”
An EY report exploring FinTech talent specifically in the UK compared to other regions, divided the global industry’s talent pipeline into three categories; technical, financial services and entrepreneurial talent.
Entrepreneurial talent acts as the catalyst for activity to draw capital; technical talent consists of the engineers behind the development of products; and deep financial service knowledge is applied to adapt to the overall market and employ regulatory requirements.
Cummings is confident that despite the number of computer science graduates with IT development skills declining – in terms of UK universities over the past decade – “there is still sufficient talent at this level to satisfy demand.”
However, firms like Pelican dealing with more sophisticated technologies like artificial intelligence can find it more difficult to source the raw talent.
Nevertheless, EY concluded the FinTech ‘ecosystem’ requires access to a deep pool of expert talent from each of these categories, in order for a company to support growth.
The process
The recruitment process at each individual FinTech company is unique, and hiring for technical talent – in the case of Pelican – is different from other roles.
Technical staff applying for a role at Pelican will have to undergo tests to prove ability and knowledge as the technology involved is complicated and requires understanding.
The process then changes for those applying for a more senior role – where Desai points out – it is more about experience and what they are looking to achieve in the new role.
“We have to get good talent, and we use all means available,” Desai said.
“Pelican use agencies and we have people looking on our behalf. Shortlists are drawn up and our human resources department will go through key requirements, before carrying out face-to-face interviews.”
Similarly, Platform Black’s recruitment for technical staff will test candidates on specific expertise, but an individual’s personality and values is also an important factor when making a final decision.
Langron explained: “We run a thorough CV screening of each candidate to understand whether or not they have the specific expertise and qualifications we are looking for and then invite the candidate to multiple face-to-face interviews.”
She added that the company is ultimately people focussed, which applies to both staff and the people behind the business that we fund.
“That’s what really differentiates us from our competitors,” Langron said.
“We are not just a financial technology company.”
Identifying talent and going through the motions to ensure a candidate is right for the company, can be only half of the battle for FinTech firms.
Once hired, a multitude of opportunities within the industry can lead employees astray – so how do FinTech firms retain their talent?
Retention
Shared ownership is a traditional method of retention, and one which is prevalent in the FinTech industry.
“It’s a way of binding an individual to the success of the company and rewarding the individual at the point at which hard work begins to turn into commercial success,” Proviti’s Cummings explained.
He added that creating a culture within an organisation – where individuals are too happy to even consider moving to another firm – is another popular and successful method.
“Simple trappings of pool tables, table tennis tables, sofas and Xbox consoles in the corner of the office can make all the difference to staff,” he said.
For Platform Black, it’s about ensuring the work environment is motivating, encouraging and transparent.
Managing director Caroline Langron, said Platform Black are all about developing the right practices in our organisation such as having an honest and open communication strategy.
“We strive to deliver to a high level of integrity and we ensure our practices are transparent,” she said.
Currently undergoing a rebrand, Pelican is looking to ensure more of its staff are hired for the long-term.
“We are currently shifting gears as part of the rebrand, and we want to empower our staff with more responsibilities under a framework which is well-structured,” Pelican’s chief explained.
He believes this approach will not only benefit those working at Pelican, but also see the company grow under good leadership from the all employees.
What about women?
In 2013, financial services and accountancy recruitment firm – Ranstad Financial & Professional – found that 51% of candidates registering with them were women.
It was the first time in its history that women outnumbered men applying for jobs in the financial services industry.
A whitepaper authored by Innotribe – renowned for its FinTech ‘start-up challenge’ – revealed a rather shocking gender imbalance within the FinTech industry.
In the top 50 European Union based FinTech firms just one company has a female chief executive officer.
A panellist at the Innovate Finance Global Summit in 2015 claimed that – “The number of CEOs named ‘John’ is higher than the number of female CEOs overall.”
Another startling statistic – 40% of women with engineering degrees will never enter the technology workforce or will eventually leave.
The authors of Innotribe’s whitepaper encouraged FinTech firms to hire more women “and make a commitment to fostering diversity.”
“Improving gender balance in FinTech is necessary in order to truly develop products and solutions that address the needs of all users… Addressing diversity within FinTech will in turn generate diversity across the entire playing field, as well as drive success,” the report said.
E2W – a rather unique company – helps financial institutions ‘collect the Gender Dividend’, which is described as the economic benefit of employing women.
E2W’s co-founder and chief operating officer, Tina Freed, explained in a blog post it is up to each organisation to retain its female staff, where an ‘unhealthy’ work-life balance can often force them out.
“Employers who cannot accommodate the changing life circumstances of their employees and provide an environment in which they can continue to develop their careers are potentially cutting themselves off from a talent pool that they can ill afford to in the age of fierce global competition,” she wrote.
Freed added that FinTech companies must think about new ways they can incorporate flexibility into their working environment.
Women – it would seem – is an untapped resource for FinTech firms who are looking to extend and retain talent in an ever-growing, competitive industry.