IPF Digital's Viktoria Ruubel suggests ways to win in the fintech talent war that's brewing in the UK and Europe.
Over the last ten years, digital disruption has shaken the financial industry to its core, and the pace of this change shows no signs of slowing down. According to KPMG’s biannual FinTech report, in the first half of 2018 alone investment in FinTech companies in Europe hit $26 billion.
While FinTech companies operate in the same regulatory environment as the incumbents, when faced with the same challenges they are offering more creative solutions. More agile than larger, established companies, FinTech firms look to innovate on all fronts. While incumbents are focused on updating legacy systems, FinTech firms are focusing on developing emergent technologies such as enhanced biometric security, natural language searches, and chatbots. According to PwC’s Global FinTech Survey, 46 per cent of large FinTech companies identified emerging technologies the most important part of their business to invest in within the next 12 months, compared with only 23 per cent of large financial institutions.
However, innovative approaches are not an inherent component of digital disruption. Technology is important, but it is still people, not machines, who design and build products, services and companies. It is essential to hire people who have the right mindset: those who think creatively and drive innovation, but who also have the skillset to ensure that they can execute those big ideas. Access to talent can be a challenge: according to research by Innovative Finance, the UK FinTech sector alone is expected to exceed 100,000 employees by 2030, creating 30,000 new jobs.
Attracting superior talent and fostering a disruptive culture may be a typical ambitious of many start-ups, but once a company starts to grow, that innovative spirit is often lost as the company starts to establish itself. Talented people are often left feeling frustrated by bureaucratic procedures and internal politics, and the organisation’s culture starts to stagnate – and as research shows, there are plenty of other opportunities across the sector. Data gathered by LinkedIn shows that technology (software) companies had the highest employee turnover rate of all major industries in 2017 (13.2 per cent).
Clearly, companies have to develop their own strategy to retain talented, flexible and resilient people who drive innovation whilst they grow their businesses. There is no universal formula for success in this area, but here are a few lessons that we have learnt at IPF Digital as our employee numbers grew 600 per cent in just three years:
No matter how good your strategy is, success is entirely dependent on the people responsible for delivering it. And this is especially relevant to technology-driven companies with high growth ambitions.
Successful companies understand that people don’t come to work solely to get a paycheque. Employees want to be part of something bigger, something meaningful. Culture is a critical differentiator that sets companies apart from their competition, helps them to attract the right talent, and allows them to build a strong brand that appeals to customers. In some sense, a shared sense of culture is the glue that keeps a company together and sets its direction for the future.
In the financial industry, as in many others, some changes happen very quickly, bringing with them opportunities. When these opportunities arise, it is imperative that you have a team with the mindset to recognise them and adapt before your competition.
When hiring new talent, prioritise attitude and cultural fit over technical skillset. Choose people who will be able work collaboratively and effectively with your current employees, and who understand your organizational aims. Find individuals who bring a wide range of experiences and viewpoints to your team as employees who have a collaborative and curious attitude will be able to drive your business forward and find the best and most competitive ways to increase customer satisfaction.
In an environment where mistakes are seen as something to be avoided at all costs, new ideas will be as rare as hens' teeth. If your employees aren't making mistakes, then it is likely that they aren’t trying new things or pushing themselves out of their comfort zone.
Mistakes should be treated as ways to learn, develop, and eliminate ways that don’t work in order to come closer to the ways that will. Mistakes are how you come up with new solutions to old problems, and they are a real advantage to your business. Build a culture where experimentation and failure are accepted and rewarded. As long as your team learns from their mistakes, owns them, fixes them, and doesn’t repeat them, they will be good for your business.
Think of any of the companies that inspire you: how many of them achieved success by avoiding risks at all costs? Similarly, building your own company was a huge risk when you started out. However, many companies move into the ‘zero-risk tolerance zone’ as they grow. Like mistakes, risks are an essential part of a successful business; it is through taking risks that businesses expand and grow. We have all seen businesses that get bogged down in procedures, methods, rules and regulations. The creativity is gone, and the entrepreneurship that made the company flourish in the first place is lost.
The financial industry is very strictly regulated, but if you build up your team’s ability to understand, evaluate and manage the risks they take then you will get the very best out of the people you employ. It’s crucial you teach people within your organisations to understand, evaluate and manage risks. Allow individuals to seek creative solutions to problems and establish a support system that helps your employees succeed in implementing new initiatives.
Successful companies remain consistently focused on their vision and goals. It’s the responsibility of management to give a clear vision for employees to follow and goals to meet. Simplify processes and explain to your team why their contributions will help to solve crucial problems and directly contribute to the company’s progress. Employees are more inclined to step up their game when they know their work adds value.
Don’t exhaust your team with complex rules and procedures. People are inspired when given the opportunity to learn how to do new things with a ‘hands on’ approach. When employees give their best, it is the business that ultimately benefits.
While there are many other ways to encourage your employees to bring their best to your organization, these are a few that are very easy to implement. To stay competitive within the financial industry it is increasingly vital to have a talented, resilient people who are prepared to drive your organisation forwards. With the fight for FinTech talent becoming increasingly competitive, the industry has a responsibility help grow and strengthen the talent pool - by hiring for attitude and training for skills.
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.