Can the UK remain a hotbed for Fintech innovation?

By Sudhesh Giriyan, COO, Xpress Money.

The UK has long been at the forefront of the fintech (r)evolution, and Philip Hammond’s statement in March put even more emphasis on helping the sector to “grow and flourish”. Couple this with the implementation of the Second Payments Services Directive (PSD2) – driving new players into the mix – and the news that investment by venture capitalists hit a record high in the UK last year, the future certainly looks bright.

But this should come as no surprise. The Fintech industry is big business for the UK; employing over 60,000 workers and contributing £6 billion to the economy. And, with the Centre for Economics and Business Research (Cebr) finding that PSD2 could add over £1 billion and an extra 17,000 jobs to the UK economy, the fintech sector is set to become even more valuable.

But one question remains, where will these skilled staff come from?

Demand for skills soar

With technology underpinning digital transformation across all sectors, the demand for those with the right skills has never been higher. However, unfortunately it’s driving a digital skills gap that over half (54%) of organisations believe is causing them to lose competitive advantage. What’s more, when it comes to Financial Services, three quarters (72%) of business leaders believe that the limited availability of skills is a threat to the growth of the industry.
And this appetite for the latest skills doesn’t seem to be slowing down any time soon. New analysis of the IT Jobs market via ITJobsWatch, found that there has already been a surge in job vacancies requiring fintech skills – rising 73%[1], year-on-year, over the last six months. PSD2 is even having a direct impact on the jobs market, with roles citing the legislation increasing significantly (311%)[2].

As well as PSD2, fintech innovation is also being driven by cryptocurrencies, which have hit the mainstream and shaken the finance world, evidenced by the dramatic rise and fall in the value of Bitcoin over the past year. Job roles requiring broad skills in cryptocurrencies increased 340%[6] in the last six months, with Bitcoin roles jumping 246%[7] over the same period, year-on-year. Whilst demand for the skills underpinning cryptocurrencies is also on the rise, with roles requiring blockchain expertise up by 348%[8].

But it’s not just roles directly related to the financial world that are seeing an increase. With PSD2 requiring banks to open up their APIs to third parties inspiring new innovative and personalised services for consumers other skills are becoming hot property too. For instance, roles requiring skills in API Development (70%)[3], API Integration (107%)[4] and API Testing (83%)[5] have also seen significant year-on-year increases, indicating that the industry is taking innovation seriously
Yet with such a significant rise in the number of job vacancies available for these positions, is innovation really as close as it seems?

Upskilling and Partnering

Acquiring the highly skilled talent necessary to meet growing demand has been a challenge for businesses for decades. In fact, a report from Innovative Finance recently revealed that, despite the growing industry, by 2030 there will be a workforce gap of 3%, amounting to 3,200 highly-skilled workers. This is projected to equate with a direct loss of £361 million to the sector.

It’s clear then that steps must be taken to best acquire and harness these talents quickly. Many businesses are discovering that they need talented individuals that can work across multiple technologies and platforms. And while typically a simple solution for a business would be to hire new staff with these talents, the growing skills gap in the UK has made this difficult. There are, however, a couple of ways that a business can acquire these skills:

  • Upskill existing workforce: Tackling this issue head-on, a business could upskill their existing workforce. By investing in their existing talent, they can ensure they retain staff that are already familiar with their work. It’s crucial that businesses provide both the tools and time for developers to practice and experiment with the software, in order to help them improve their skills.
  • Partnering to foster talent: Alternatively, a business could look to partner with another fintech or organisation, who might be more likely to have the expertise they require. Utilising external expertise would also help upskill the businesses workforce over time, as their staff develop an understanding of the software through exposure to its partner’s experts.

It’s important that fintechs start to address the ever-widening skills gap. Any organisation that fails to take steps to develop talent will ultimately be out-paced, out-innovated, and ousted from the market by competitors who do keep pace with the change. Banking APIs have only just become available, and technologies such as blockchain and cryptocurrencies are only just starting to gain traction. The only way to handle the rapidly changing fintech landscape is to embrace it and ensure the skillsets needed are fully accessible.









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