Customer expectations for a modern, seamless digital banking and financial services (FS) experience continue to heighten. CIOs and CTOs are leading the transformation of their organizations’ technology ecosystems in critical functions like analytics, cloud, and information security to deliver the IT capabilities required to meet customer expectations.
In this era of digitalization, an organization’s workforce is the key to successfully accelerating transformation. To acquire and build the necessary specialized IT talent, the FS industry must revisit its talent management model as the war for IT talent continues to intensify.
Demand for IT Talent Continues to Accelerate
There is a shortage of workers with the highly specialized skills required to fill critical roles leading digital transformation at banks and financial institutions (FIs). Experienced IT workers are aging out of the workforce, and there is heavy competition for the younger IT talent entering the workforce.
Demand for specialized IT talent has increased sharply since the 2010s, and it continues to increase across all industries and global business centers. As a result of this acceleration, banks and FIs are in an era of hypercompetition with global tech industry brands, fintech startups, and diverse companies in all industries undergoing transformation (like Amazon, Ford, and IBM).
Business model disruption also puts a premium on acquiring talent for newer skills and roles that are emerging where current workforce capabilities are lacking. These trends suggest that, even in a potential economic slowdown, demand for skilled talent in critical functions with rapid technological change, such as AI and machine learning, is inelastic and will remain high (though job postings may decrease).
CIOs and CTOs Should Take an Inside-Out View
Given the severe supply-demand imbalance in the IT talent labor market, CIOs, CTOs, and their HR peers cannot hire their way out of this challenge. Instead, organizations that are successful in digitally transforming their business models will leverage a talent management model that combines build- and buy-side strategies.
On the talent acquisition side, for example, the FS industry is witnessing success in establishing pipelines to grow its entry-level IT workforce structure through formal recruitment partnerships with vocational schools, community colleges, and universities. Banks and FIs are also focused on creating a more robust internal labor market through talent management practices that build pipelines based on skills.
Formal learning is a part of this, yet creative approaches like career maps and skills development playbooks for roles with adjacent skills (e.g., marketing analytics and business intelligence) should be adopted to enable development of specialized skills growing in demand.
Investing in Workforce Development Is Key
Just as CIOs and CTOs define the strategic technology capabilities and investments that are aligned to growth, they must also (in partnership with HR) define the skills needed to execute on transformation initiatives. By identifying and prioritizing newer, specialized skills aligned to growth initiatives, CIOs and CTOs are better positioned to both determine talent requirements for hiring and what talent management practices can be effectively targeted to invest in building more specialized, emerging IT capabilities.
For example, upskilling approaches like job sharing and mentoring can be leveraged for job functions growing in demand that require skills and knowledge in combination like data architecture and information security. Learning programs can also be tailored to develop the newer, innovative skills that create more opportunities for internal mobility and cross-pollination of people to roles in related job functions.
Support for CIOs/CTOs
While turnover and high demand for specialized IT talent will persist, banking and FI CIOs and CTOs can develop a more holistic talent management strategy designed to build a future-ready workforce.
Aite-Novarica Group is developing C-level guidance to help leaders across all segments of banking, FS, and insurance frame the impact of this challenge and determine solutions.
To support CIOs and CTOs in effectively integrating people and technology strategy, the Financial Services CIO/CTO Advisory Practice is conducting new research to identify talent management and organizational design best practices.
How is the war for IT talent challenging your organization to build a workforce with the highly specialized IT skills needed for transformation?
We’d be gratified to get your input on how to make this research actionable for your organization.
Give Us Your Input >> Email me at [email protected], and I’ll reach out to schedule a conversation on how the War for IT Talent initiative can help you and to introduce the FS CIO/CTO Advisory Practice.
