Is a Digital Skills Gap Holding Financial Services Back?
How upskilling, reskilling and hire-train-deploy can help employers in finance transform their digital workforce
Rapid digital transformation, security challenges and competitive pressure have put financial services behind the eight ball. Technology (and disruptors) are reshaping the banking industry — and customer expectations. Financial services no longer simply need an IT department that supports day-to-day desktop and network operations; they need an entire organization ready and trained for innovation.
Today: 92% of all jobs require digital skills. One-third of workers don’t have the foundational digital skills to qualify for these jobs. The result: 85 million jobs could go unfilled around the world by 2030 because of the skills gap. It’ll cost about $8.5 trillion in unrealized annual revenues
More than 73% of financial services organizations say they don’t have the digital talent they need, and it’s preventing them from getting real, data-intensive work done.
But let’s talk about the 26% of companies that do have the digital skills and tech talent them need — and how your financial services organization can too.
Examples of digital skills gaps in financial services
Automation & business agility
Rule of thumb: if you’re not using AI, you’ll be replaced by someone who does. That’s not to say the robots are coming. But automating routine tasks, gaining insights from data and streamlining operations to increase efficiency is a game-changer.
Specific skill gaps & opportunities:
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- MuleSoft is an integration platform that allows businesses to connect applications and data sources, improving operational efficiency by reducing the time and effort required to manage their technology infrastructure.
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- Pega is a low-code platform that supports AI-powered decision-making and automated business process management. Like these other platforms, Pega helps businesses gain efficiencies, insights and agility through automation and AI.
Financial services companies that are slow to automate — and lack the skills to use leading tools like Mulesoft, ServiceNow and Pega — will struggle to keep up with modern, agile industry standards.
Data analytics & platforms
Data analytics is about more than collecting and protecting. Data governance is the system of managing the availability, integrity and security of data in enterprise financial systems. Organizations not only need the talent to look at and leverage data, but the teams to design data strategies, implement systems and manage platforms that drive data-informed strategic decisions.
Specific skill gaps & opportunities:
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- The Databricks platform combines data warehouses and data lakes into a Lakehouse architecture. It enables businesses to collaborate on data, analytics & AI workloads using one platform and one source of truth.
Never in the history of financial services has data talent been more imperative. Understanding data governance and platforms, like Databricks, will be key to setting up an infrastructure and data strategy that will help business compete.
Cybersecurity
With the amount of money and data on the line, it’s no surprise financial services are regular targets for security breaches, data theft and scams. Threats are getting more sophisticated. One security breach can cause a business millions of dollars — not to mention trust and loyalty of your customers.
Specific gaps & opportunities:
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- DevSecOps integrates security practices right into the software development lifecycle. DevSecops aims to seamlessly integrate security into the continuous integration and continuous delivery (CI/CD) pipeline in both pre-production (dev/test/staging) and production (ops) environments.
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- Network security covers the processes, policies and practices that aim to protect a financial services company’s network and data from breaches, misuse and unwanted activities. Network security teams create the secure infrastructure to support desktops, IoT, applications, workloads and all the company’s users.
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- Cybersecurity more broadly considers the company’s complete risk profile, threats and how to mitigate those threats with monitoring, alerts, systems and training.
Lacking the digital savvy across your organization, specific security skills to protect your data and practices to work security right into your CI/CD pipeline is an incident waiting to happen.
Five ways to address the digital skills gap in financial services
1. Upskilling employees
Upskilling aims to train employees on new, in-demand skills to optimize their performance and help them keep up with changes in the financial services industry.
This type of training and professional development helps current employees grow in their current roles and helps the team better meet the needs of the business (and demands of the industry).
Upskilling is an investment in your employees’ future, as well as your organization.
2. Reskill-and-redeploy
Reskilling is similar to upskilling. It aims to train employees on new, in-demand skills. But in this case, you’re preparing the person for a new or evolved job.
Reskilling is often used to help address hiring gaps while helping your existing workforce change / evolve careers. It’s a powerful tool for maintaining institutional knowledge, retaining employees and bolstering your company culture.
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- What’s the difference between upskilling vs. reskilling? Plainly put: the purpose. Upskilling trains up your employees for the evolution of their jobs. Reskilling prepares employees with skills for new jobs.
3. Hire-Train-Deploy
Competition is fierce for tech talent. For a number of reasons, financial services is often at a disadvantage when recruiting for tech roles. What’s more: everyone is pulling from the same, finite number of tech workers for a seemingly infinite demand for tech skills and innovation.
The only sustainable solution is to develop new tech talent.
Hire-Train-Deploy (HTD) is a model for doing exactly that. Financial services employers work with a training partner to recruit strong candidates for tech roles, train them in very specific tech skills and platforms, and deploy them onto the employer’s team, ready and experienced in the work they need to do. We call this “net new” tech talent.
You’re not fighting for a slice of that 5.2 million tech workers. You’re finding people with the right aptitude for tech projects in financial services, and your partner custom-trains the candidate(s) to be really great at working on projects for your tech stack.
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- How does Hire-Train-Deploy differ from upskilling vs. reskilling? They’re all approaches for training people with digital skills for the future (and the right now) of work. Upskilling and reskilling focus on training current employees. Hire-Train-Deploy starts from the beginning, with skills-based hiring. HTD hires promising candidates with the aptitude and foundation for working in the specific jobs they’ll be trained and deployed for.
4. Mentorship
Mentorship programs pair seasoned professionals with team members who are willing and ready to learn. Mentors can help employees identify their career objectives, set learning goals and make meaningful, measured progress toward improving their skill sets for the modern workplace.
5. Foster a digital culture
Bridging the digital skills gap isn’t a one-and-done project. Much like digital transformation at the company level, digital skills development is an ongoing journey. It requires a mindset shift. It needs to become part of your culture.
Regularly investing in training and collaboration for your team can keep digital skills at the top of priority lists. Encourage experimentation, learning from your failures and adapting to new technologies, as a team.
Best time to address your digital skills gap? Early and often.
Emerging tech platforms of today will be the standards of tomorrow (and then you’ll have to catch up with what’s emerging after that), especially in financial services.
Each of the above options — upskilling, reskilling and hire-train-deploy — can help your business find the right tech talent to meet your digital skills needs today and into the future. For many organizations, a combination of approaches that align with your tech talent strategy may be right for you.
Right now, we’re seeing demand for skills development and experienced MuleSoft developers, ServiceNow certified developers, Databricks certified developers, Pegasystems developers, networking, security and DevSecOps engineers. And we’ve developed curricula in our own hire-train-deploy programs to develop the talent financial services companies need to compete.
See how our Hire-Train-Deploy company model (also known as the Recruit Train Deploy company model) works for financial services companies, and how it can help you engineer-to-order the tech talent you need now.
Let’s Build Your Team
Connect with the Smoothstack team to learn how to close your digital skills gap with a custom-trained team.