Digital trends have been reshaping the banking industry too.

While banking organisations have made significant strides in meeting the digital demands of customers, the industry continues to face challenges when establishing digital-first talent strategies, with only 15% of the top in-demand skills currently being employed by their IT workforces

Many banks do not have a future-ready workforce while fintech companies continue to embody a digital-first strategy.

According to Boston Consulting Group, in today’s typical bank, up to 90% of employees are dedicated to day-to-day operations, with only 10% devoted to change and innovation.

To compete with fintech companies and remain relevant, banks need to rethink talent and transform, and do so quickly.

They need to accelerate product delivery and be more flexible in responding to customers. Often having costly, complex tech stacks, they need to reduce IT spending, and increase technical flexibility and scalability. With increased security and regulatory risks, they need to adopt AI-driven risk management practices.

As per talent intelligence platform Eightfold AI’s new report, “How Banks Can Become Future Ready,” banks have three main opportunities to better compete with the talent challenges fintech companies pose: Upskilling/reskilling, Calibrating roles with future skills, and Hiring for potential.

Upskilling/reskilling to bridge skills gap between rising and declining skills

For each of the talent groups, there is a need to see which skills are declining and which are rising.

This requires a particular focus on equipping IT employees with rising skills such as Python, Docker, node.js, and machine learning.  Developing future-ready front and middle office employees requires a focus on rising skills such as digital sales, data analysis and business intelligence.

“For business support roles, for instance, data entry and GAAP Standards are declining. Social media management and digital marketing are increasing. For front office roles, cash management and call centre support are on the decline, while digital sales and investment banking are on the rise,” says the report.

This is where “adjacent skills” come in. By building upon adjacent skills, employees can be upskilled and reskilled into skills that are rising in the workforce.

Take a bank’s systems administrator, for example. It’s a role that’s declining in prevalence. The report says there are a number of career tracks, and careers in rising roles, that a system administrator could pursue: business systems consultant; cloud engineer; network engineer; technology manager; or DevOps engineer.

“We can analyse how the current and future (rising) roles are related; the relation, for example, between a systems administrator and a cloud engineer. There is a high degree of skills overlap. SQL skills, VMWare, and Troubleshooting skills are common in both positions. There are also a number of adjacent skills. From there, we can see the new skills required for a systems administrator to transition into cloud engineering, such as Java, Python, and Amazon Web Services,” the report adds.

Banks can undertake a similar process for every role, whether it be a bank teller, home mortgage consultant, or network support technician.

Calibrate roles with future skills

The second opportunity to compete with fintech talent involves calibration and considering emerging skills from outside the industry (example big tech companies) to fulfill skill requirements.

Banks, like most organisations, tend to fill a job with a job requisition and a job description - which usually reflect the way the job has been done in the past. And, banks generally tend to search for candidates from within the industry.

Instead, to compete with fintech companies and future-ready their organisations, banks should rethink how they calibrate roles, says the report.

This starts with the ability to see which skills are emerging in each role. From there, the bank can seek these relevant skills in each new hire, and as spelled out above, reskill and upskill current employees.

“Changing role of a product manager, for example. A bank can identify candidates with rising skills, or skills that are adjacent to rising skills. Rising skills for product managers include user research, rapid prototyping, and data analysis. Importantly, these skills may be found in a financial-sector candidate, but they could also be found in a candidate in another industry, such as the tech sector,” says the report.

According to The FinTech Job Report: Technology Is Eating Finance, “Despite the name Fintech, the job roles in Fintech companies are quite different from financial services, and much more similar to technology companies. Transferable skills to get into FinTech are more ‘Tech’ than ‘Fin.’”

Adopt a hiring-for-potential mindset for larger talent pool

Finally, banks should adopt a “hiring for potential” approach.

By analysing who has what potential to learn the most in-demand skills, whether they are external or internal candidates, the potential pool of talent increases sharply, says the report.

For example, consider the adjacent skills to Python, such as Java, C++, and R. People with these skills are highly likely to be able to learn Python. By including these high-potential workers in a pool of Python-skilled people, the pool triples.

“Considering the role that banks will play in a global economic recovery, they must become more diverse and draw from a larger pool of talent in order to continue their momentum. They are now competing with entire ecosystems of tech organizations for the same pool of talent,” said Kamal Ahluwalia, president of Eightfold AI. “Future-thinking institutions must scale their investments in talent in order to maintain their strategic advantage.”

Eightfold partners with leading banks including BNY Mellon and Capital One to rethink how they hire, manage, and develop employees.

The analysis leveraged Eightfold’ s global dataset and considered publicly available profiles from major banking corporations as well as fintech companies for benchmarking purposes. It analysed approximately 700,000 publicly available profiles from top banks, and benchmarked those findings against approximately 25,000 publicly available profiles from top fintech companies.