Competition for digital and consumer skills accelerates in payments sector

Tim Muzio, Head of Payments Practice, Odgers Interim

The open banking revolution is set to transform financial services in 2018 and the industry is alive with activity in preparation. In order to overtake competitors however, financial institutions will have their work cut-out to educate retail and SME customers on what the changes actually mean for them.

To do this, financial institutions need the best consumer-minded and digital professionals on board.

Technology skills are essential if financial institutions are to stay ahead of the curve. The CMA’s move to reform the banking sector and the incoming PSD2 regulation will pave the way for a new era in financial services.

In 2018, financial services institutions will be able to access the data of customers using Open API’s, which will dramatically open up competition for the benefit of consumers. This will not only apply to financial institutions in the UK, but also across Europe.

The changes will unleash the real potential of technology – making it even easier to switch banks, manage multiple accounts with different providers, and access more tailored products from seeing mortgages, savings and pensions all on one platform, to name a few benefits. But, if you were to ask the general public what they thought of this, few would even be aware of the changes.

The breadth of talent available to financial institutions will be crucial in overcoming this challenge.

They need to not only hire the talent that can implement the technology to capitalise on these changes, but also the skills to better engage with customers. That communication effort is part of a much broader initiative to educate and inform.

For example, despite the pervasiveness of current contactless technology, myths abound of fraud, theft and security and take-up can be patchy among some demographics. It is clear that some financial institutions are more ahead of the curve than others.

We’ve seen some major high street banks invest in this messaging to improve consumer experience, knowledge, security and trust, while others have been noticeably quiet.

This gap is growing and is being driven by the skills and experience that can be found at an executive level around the boardroom table.

The most successful organisations have been those that can talk to their customer, have the expertise to implement change and be agile and those that can challenge internal procedures and promote collaboration.

From the conversations I’ve had in the industry, it is encouraging to see that there is a real effort being made now to reverse that trend and bridge the gap – putting consumers back at the core of their propositions.

In response, the ‘open banking interim’ is emerging as an in-demand professional. These are experienced executive professionals in end to end payments, professionals who understand security and authentication concerns and how to challenge the internal process that help drive the product development to better its consumer experience.

Essentially, people that understand the plumbing of a bank and how to marry that with the consumer experience. They are needed to help refocus organisations, bring back vital skills and lead transformation programmes that harness opportunity instead of making it a tick-the-box compliance exercise.

However, the pool of talent is relatively small and finite and the vast majority of it lies in the UK.  This means financial institutions not only have to compete with each other, but also European and international companies vying to secure professionals with the most practical payments experience.

This talent drain is already happening as countries play catch up with the current pace setters from around the globe.  Each country is at a different stage of developing payment technology, with its own unique challenges depending on specific consumer needs that change from culture to culture, but the majority of skills required at the executive level are available. Professionals in the UK with comprehensive experience are a useful resource to help them overcome these difficulties.

In turn, this is pushing up the day rates on offer further afield for interim executives, and if UK financial institutions aren’t prepared to equal this, they risk losing their best talent.

As financial services jostle for position both in the UK and abroad, the battle for executive level open banking interims will intensify further and people will go where the technology gives them more power over their own financial lives.

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