Ankura Managing Director Michael Lew and other prominent industry thought leaders contributed to this joint report by CTFE and Elevandi. The report gathered insights from an invite-only, deep-dive roundtable event held at the Singapore Fintech Festival 2022. Read the full report here.
The finance industry has experienced massive changes in the last 10 years, witnessing the emergence of new technologies, new players, new business models, and so much more. This report aims to provide an overview of the skills now required for professionals, analyze the current skills gaps, and discuss possible approaches to support the development of people in the financial services industry.
A New Framework: SHIME
Many thought that hard skills such as python or data science were the most relevant, however, feedback from Fintech CEOs and senior leaders in Finance proved otherwise. CFTE designed a framework called SHIME, a qualitative tool incorporating all the important skills— soft skills, hard skills, industry knowledge, mindset, and experience.
Soft skills relate to an individual’s interactions with colleagues, customers, and overall management of work like collaboration, or one’s capacity for task completion.
Mindset, a set of attitudes such as resilience and adaptability, is highly valued by professionals in the industry as they can shape one’s way of thinking. In addition, having industry knowledge such as the latest news or trends is vital in digital finance, regardless of one’s technical background.
Last but not least, previous experience in either finance or tech is preferable to none.
Impact of the Skills Gap
Impact on Business
A lack of skilled workers will see small businesses struggling, loss of revenue, and limited growth.
Impact on Society
Inequality Among People
While inequality initially caused high entry barriers to Fintech (“exclusivism” issue), the resulting weak skills among underprivileged minorities led to further inequality in job opportunities and income. A vicious cycle develops and affects the livelihood of many generations.
Inequality Among Organization Types
Small and medium enterprises, accounting for more than 90% of businesses globally, are not able to generate a bigger share of the GDP if they cannot compete with large enterprises for high-skilled labor.
Inequality Among Sectors
Fast-growing areas like Fintech and the digital economy attract more talent and investments, while fundamental areas like healthcare and transportation are neglected. If it continues, the economy will become more concentrated, and exposed more to systemic risks.
Inequality Among Countries
The reignition of the war for talent is happening between countries when borders are no longer a restriction. It has been shared that least-developed countries are being depleted of talent in general, which intensifies the global digital divide.
Reasons Behind the Skills Gap
Current System Inadequacy
With the massive changes in the finance industry, new players have emerged, new activities were created, old roles were transformed or disappeared, and new roles appeared. New skills are therefore required to understand this new world.
The majority of curriculums still comprise of modules that don’t reflect the significant importance of digital topics that have been transforming finance for the past decade. Moreover, training provided by schools and universities lacks continuation after their students graduate. Meanwhile, leaders in the private sector and the public sector mutually believe in the need for longer accretion of experience and soft skills before and after graduation.
Corporate training is a poor substitute for adult education. It is insufficient in time (usually less than 1h / week) and substance (with most corporate training in finance focused on mandatory compliance training). Most organizations do not encourage a “culture of learning.”
Solving the Skills Gap
Banks and tech companies give more students and graduates the experience needed in the SHIME framework, which is usually referred to as “company-led training.” In return, hackathons and business competitions at universities are where banks and tech firms can look for more talent for their pipelines.
Governments need to set out a strategy and shape education policies at a country level to decide funding and schemes for supporting the workforce and prioritize those most in need of upskilling.
There are three main actions of alignment from the central banks and regulators to other stakeholders.
- Providing guidance and support on talent trends in cooperation with industry.
- Bodies, financial institutions, Fintech/tech, private sector, and individuals who want to enter, transition, or grow in financial services.
- Setting skills framework and curriculum in alignment with industry bodies, universities, and training providers.
- Allocate funding to stakeholders including training providers, universities, financial institutions, Fintech/tech, private sector, industry bodies, and individuals.
After strategies are outlined and actions are aligned, all stakeholders should put efforts into raising awareness of digital and financial literacy and implementing them through regular training.
The first to need innovation is universities which should use new technologies in the delivery of new knowledge. Millennials and gen Z who were born digital-native would find it hard to absorb new information in the way their parents were taught. Diversifying lesson formats is one example of an improvement to the curriculum.
The same can be said for corporate training. Engaging and training professionals is challenging, so more modern approaches should be designed to best achieve learning objectives, such as live sessions, hands-on projects, curated self-paced courses, and bite-sized continuous learning, especially for more technical knowledge.
Content-wise, soft skills and mindsets are usually excluded from competency programs. They are also more difficult to teach on Learning Management System. So workshops should be used for professionals to learn directly from industry experts. It is also advised by successful tech companies to use “simulation” to train juniors and entry-level workers, without risking the company’s growth strategy.
On the other hand, businesses would need to innovate their operational models, for instance utilizing AI technologies to automate tasks for employees, so they get more time to learn. Some firms have even made training an essential part of performance management, determining the amount of year-end bonuses.
There is no silver bullet to quickly and immediately solve this issue, and there are many ways to approach it. This report doesn’t aim to provide any definitive answer to this complex question but should be seen as a catalyst for all those involved - governments, regulators, central banks, industry bodies, private sectors, higher education institutes, training providers, individuals - to start asking questions and try new approaches.
© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.