We are living in a time of a revolution; one that is changing the way we do business, how we deal with our money, and the way we bank. Customers are always looking for the next revolutionary disruption that redefines convenience in the financial sector. The entire Fintech industry, be it the large financial institutions or startups, everyone is looking to quench the customers thirst for constant innovation. But there is one major challenge that is casting a grey cloud on the future of fintech innovation; a challenge that has become a number one priority for all the stake holders – a shortage of suitable talent equipped with financial and tech skills.
KPMG defines FinTech as ‘technology-based businesses that compete against, enable, and/or collaborate with financial institutions’. This definition includes the creation of software and processes; and streamlining current processes to provide new opportunities and convenience to customers to fulfil their financial needs. The fintech sector consists of three broad segments – New Startups and Ventures, Financial Services institutions engaged in innovation, and collaboration between fintech startups and traditional financial institutions. In Fintech hubs around the world, stakeholders believe that attracting and retaining suitable fintech talent is one of the most prevalent challenges faced by fintech companies.
The UAE, which is one of the major fintech hubs in the region, is also facing a similar problem. According to a 2017 Wamda report, there is an evident on-ground shortage of fintech talent that is required for the region’s speedy growth in the financial technology sector. The UAE is one of the most ambitious countries in the world when it comes to innovation in the financial sector. To keep the ambition fueled, there is a high demand for quality talents in the fintech sector. Recruitment in the fintech industry is a bit tricky. Finding people who have expertise in both technology and finance is a tall order. Let’s look at some key aspects of dealing with skill shortage in UAE’s Fintech Sector.
The Talent War
When there’s shortage of a resource, there’s war. In this case, the resource is human capital and the war, well it’s not really a war. Or is it? Startups in the region are having to compete with big corporations and the public sector when it comes to bagging applicants with the right skill set. As stated in the Wamda report, majority of the workforce is attracted towards working for corporations, followed by public sector. Only a small portion of the employees are willing to work with startups. The main factors impacting employee preferences are higher pay and more job security in corporations and public sectors, as compared to startups. With increased collaboration between startups and corporates or public-sector companies, this disparity should slowly diminish.
There’s a growing demand for diverse and increasingly complex software systems, which is directly associated with the shortage of technical talent globally. A recent Ryerson university study reported that the demand for talent is growing at a more rapid rate than the educational capacity of institutions. Currently there is a gap between people with expertise in technology and those who are core finance professionals. Knowledge sharing between the two is going to play a key role in skill development for the sector. Also, in a rapidly evolving environment, there is a need for lifelong learning among fintech professionals as well. Today, many finance professionals are opting for online financial technology in a bid sources to stay ahead of disruption. Highly regarded educational establishments are also innovating to provide resources to the fintech industry. Institutions such as Oxford and Princeton are also offering online courses for high-level banking executives.
Corporates to the rescue
While corporates are posing a threat to startups in terms of attracting talented fintech professionals; they are also playing a key role in the upbringing of a new generation of fintech professionals. Many Financial Services Institutions are investing a great deal in innovation. We are also seeing many fintech collaborations between FSIs and Startups. Professionals working with FSIs are getting good exposure to new models and technologies and mutating into finance professionals with a strong knowhow of latest financial technology. Findings of the Wamda report suggest that majority of fintech entrepreneurs started their career at large corporations. Xpress Money’s collaboration with fintech companies and partnerships with banks to offer digital payments solutions to customers, has added great value to the professionals at Xpress Money involved in these projects. After all, there is no learning like learning on the job.
A Visionary Government
When it comes to addressing the shortage of talent in the financial technology sector of UAE, an ambitious government is the true game changer. The leaders of this country are committed to lead the world in this fintech revolution; and are investing heavily in skill development in the sector. The government has Fintech as a priority, as indicated by a series of regulatory measures that have been introduced in the country. For instance, The Dubai International Financial Centre (DIFC) that serves as a link between MENA markets with markets in Europe, Asia and America; launched the Fintech Hive at DIFC, an initiative that aims to leverage networks to create a more enabling environment for the development of financial technology. Initiatives by the government are also attracting talent from different parts of the world to look at UAE as an opportunity.
The shortage of skills in the fintech sector, although evident, is just a temporary situation caused due to the rapid development and growth in the sector, which is having its impact on markets that are growing rapidly. According to a recent report, the UAE has surpassed western countries when it comes to the adoption of digital technologies for financial services. The country offers immense opportunity in the fintech sector, and like any opportunity, there are obstacles. Fortunately for UAE, the country has the right mix of innovative thinking, industry expertise and a proactive government to tackle this problem.
Written by – Sudhesh Giriyan, COO, Xpress Money (The article was originally published on Khaleej Times)