Disruption in financial services

Implications for Hiring

Rocked by recent regulations and a wave of technological advancement, the financial services sector is growing at an unprecedented pace. Where big-name banks once maintained an unshakeable grip on the market, fast-moving, tech-savvy start-ups are challenging the bricks-and-mortar model by giving the people a seamless and efficient way to manage their money.

Whether in direct response to evolving market demands and rapidly-advancing technological capabilities or the catalyst itself, PSD2 and other open banking legislation has undeniably played a leading role in disrupting the status quo. Since its introduction reforms have already proved transformational for the industry, bringing new entrants, new models and new opportunities for players throughout the sector.

“Monzo, Revolut and N26 have already attracted millions to their platforms, pushing traditional companies to rethink their approach”

Open banking may not have reached mainstream levels, but it’s undoubtedly making good headway. Challenger banks such as Monzo, Revolut and N26 have already attracted millions to their platforms, pushing traditional companies to rethink their approach in order to enhance their customer experience and stay front of mind to their loyal customer-base.

Unchartered Waters

Increased competition resulting from regulatory reform and rapid developments in technology has certainly promoted progress for the market – but for big banks, it’s unfamiliar territory. Prior to this shake-up, the largest banks didn’t have to worry about competition. Most consumers were known to stay with one bank their entire life – in 2013, a study found parental influence drove the first banking decisions of three in five 18-24-year olds, while another proved account holders were more likely to stay with their bank – typically for 17 years – than remain loyal to their husband or wife (11 years).

But in the short space of five years, much has changed. Today, emerging technology is calling into question the way people manage their finances and the relationships they have with their banks. Blockchain and open banking are allowing for new possibilities, and appropriate legislation has paved the way for a new era in financial services.

Of course, it’s hard to shake-up your entire service model when you’re a well-established, traditional provider. Digital transformation projects can prove a bumpy ride for banks: legacy systems, long-running processes and a lack of tech skills naturally put incumbents on the back foot. In most cases, banks in this arena simply lack agility to upset the applecart for long-term transformational goals. Rather than competing with the raft of cutting-edge innovators alone, large banks are increasingly exploring collaborative projects with B2B fintech providers. Recent research from the World Retail Banking Report revealed an overwhelming 91.3% of bank executives interviewed said they were willing to work closely with FinTechs in the future.

The Challenge

They may operate in the same arena, but at present, disruptive tech start-ups and well-established, traditional banks simply don’t speak the same language. As highly regulated entities, banks must not only ensure the technology they adopt into their model is reliable but the business they partner with can be trusted: this process can result in months of deliberation as due diligence is undertaken and risks are assessed. This can be particularly challenging for a smaller company under heavy pressure.

“FinTech start-ups must find professionals that can lead the charge and bridge the culture gap”

According to Rob Morgan, vice president of emerging technologies at the American Bankers Association, closing the culture gap that exists between banks and FinTech firms is the greatest threat to successful collaboration between both entities. For banks, it’s a case of learning to become more agile, bridging siloes and becoming be more responsive to market trends. For start-ups, the focus should be fixed on navigating complex hierarchical and bureaucratised structures.

“FinTechs must understand the regulatory challenges and the need to maintain customer trust, while banks need to adapt to the innovative and iterative culture,” says Morgan. He’s right. If they are to strike up successful partnerships and build consumer trust, FinTech start-ups must find professionals that can lead the charge and bridge the culture gap to bring both entities together in a mutually beneficial arrangement – of course, that’s easier said than done.

Fortunately, connecting with the right, high-calibre finance talent to forge profitable partnerships is not impossible. Teaming up with a specialist executive search firm who offers both industry insight and extensive network of high-quality candidates with the right experience can certainly facilitate the task.

At 360 Leaders, we help connect the world’s most innovative tech firms with the talent they need to achieve their goals. Offering deep market intelligence and one of the broadest and most engaged global talent networks, our team delivers an unrivalled service to disruptive tech pioneers, bringing them the brightest in the industry to ensure the best chance at success.

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