BY Fraser Tennant
A rapidly-widening talent gap is hampering traditional banks’ ability to compete and stay relevant in a digital-first world, according to a new report by The Josh Bersin Company. The majority of banks around the world are struggling to meet the need to digitalise.
In its ‘Consumer Banking Under Siege: Addressing the Digital Capability Gap’, the research reveals that most banks’ skills bases are falling behind, despite attempts to hire fresh talent, and the sector will see a massive shortage of people with suitable digital and technology skills by 2025.
Unless banks face this talent issue, the report suggests that longstanding players will never catch up with their modern counterparts, potentially losing relevance within five to 10 years. The report also suggest that banks identified as ‘trailblazers’ have a number of things to teach the rest of the market.
The report’s key findings include: (i) the digital transformation of banks is not a technology problem, but a talent challenge; (ii) most banks are struggling to offer the great digital experiences that clients now expect, but their skills base is failing to keep up, despite attempts to hire fresh talent; (iii) trailblazer banks – those moving in the right strategic direction and seeing positive business results – are applying talent intelligence techniques to look laterally at opportunities to reskill employees out of roles that are becoming obsolete; and (iv) as a secondary strategy, leading banks are also proactively targeting suitable tech talent and designing ‘irresistible’ workplaces to attract and keep them.
“Most consumer banks are currently trying to hire their way out of this talent challenge,” said Stella Ioannidou, senior research manager at The Josh Bersin Company and author of the report. “But there are not enough people with relevant tech skills to go round, particularly those who are also experienced in the banking industry.”
For example, in the US, the report notes that in 2023 there was a 54,000 discrepancy in the talent available, a figure which, if it persists, will grow into a 350,000 gap in future-ready technologists with banking experience.
“Even if banks look for tech talent without direct sector experience, they face fierce talent competition from consulting firms, IT service providers, Big Tech and so on, so they need a different approach,” she continued. “They need to reskill the people they already have and make it a priority to keep employees close and engaged – and they need to do that now, as it will take time to build the capabilities and skills they so badly need.”
Report: Consumer Banking Under Siege: Addressing the Digital Capability Gap