The bank results out this week show the impact of regulatory changes, evolving customer behaviour and new players entering the sector on their quarterly earnings.
Disruptive shifts in labour movements caused by Brexit are making access to talent and expertise a key focus for financial services. The upcoming PSD2 regulation also adds a new dimension to the digital competition which banks face.
Financial institutions are also increasingly having to compete with agile technology firms for talent with the same skill sets. Traditional banks are fighting against the perception of being conservative institutions. Compared with other industries, traditional financial services face stiff competition when it comes to persuading technology talent to join.
Difficulty in finding talent in the market is being acknowledged by business leaders. However it is not being reflected in the action to address tech skills concerns. According to PwC,70 percent of financial services CEOs see the limited availability of skills as a threat to growth, yet only 28 percent are redirecting their focus onto the skills and adaptability of their people.
According to Farida Gibbs, CEO of Gibbs Hybrid comments, “Over the last couple of years, traditional banks have had to compete with new players who want to take a slice of the banking pie – it is not just their industry peers, but companies in other industries and also innovative technology companies. Most recently, Orange the French telecoms company, announced it was going to launch an online bank as new legislation levels the playing fields between existing banks and new providers. Without the brains to understand, implement and innovate, financial institutions won’t be able to optimise the use of the latest technologies and gain business value to generate profitable outcomes.”
“As PSD2 requires banks to open their data to other suppliers, banks cannot go at their own pace when it comes to innovation. The race is on with other payment providers who are creating their own solutions which are better aligned to customer needs. Technology talent who have the skills in security, cloud and mobile development will empower banks to build their own applications and user friendly interfaces when it comes to payments which will differentiate them from the Fintech innovators.”
Farida continues, “As banks and Fintechs go head-to-head, having access to the skills and talent to navigate through the changing banking landscape will allow banks to maintain their market share. New entrants are agile and better able to respond to changing customer expectations and so banks are having to open their doors to the right people who can take them to the next level. It is important to revamp their banking model and harness the power of new technologies to become more customer focused.”