Why Top Talent Is Shifting from Traditional Banks to FinTech

Why Top Talent Is Shifting from Traditional Banks to FinTech

The Appeal of FinTech

Exciting Dynamics of the FinTech Industry

FinTech attracts bright minds with innovative work environments where pushing boundaries and exploring the intersection of technology and finance is the norm. Working within FinTech offers the exhilarating prospect of engaging with cutting-edge technology. This fosters an environment where calculated risk-taking is encouraged and established norms are meant to be challenged and redefined.

Reduced Risk and High Market Valuations

A key factor propelling the migration to FinTech is the diminishing risk associated with this industry. FinTechs have demonstrated consistent growth and meteoric valuation increases, exemplified by companies like Klarna, which reached a valuation of over $31 billion in 2021. Long before the pandemic, visionary minds within the financial services sector recognized the emergence of entities like Square, founded by Jack Dorsey of Twitter fame. The successes of Klarna and Venmo affirmed their belief that FinTech was evolving into a stable and profitable sector, attracting seasoned financial professionals.

Creativity and Ubiquity

FinTech permeates daily life, with its widespread integration into routine tasks. From depositing checks via mobile apps to managing multiple bank accounts through applications, and utilizing ride-sharing or food delivery services, FinTech’s omnipresence has revolutionized everyday activities. This omnipresence, combined with its innovative approach, attracts individuals keen on being at the forefront of technological advancements.

Remote Work and Hybrid Opportunities

The appeal of FinTech is further amplified by its flexible work arrangements. Even before the pandemic, many FinTech companies offered flexible work policies and unlimited annual leave, fostering a conducive work environment. Post-pandemic, while traditional banks aim to reinstate office-based work, FinTechs continue to embrace remote setups, attracting individuals seeking a better work-life balance. Despite the merits of physical office presence, employees who’ve relished the flexibility of remote work remain hesitant to revert to the traditional office environment.

Competitive Employee Packages

The influx of capital into FinTech bolsters its ability to offer highly competitive employee packages, rivaling those of well-compensated traditional bankers. These packages, coupled with hybrid work environments, improved work-life balance, and unconventional perks such as on-site chefs and relaxation spaces, present a stark contrast to traditional financial sectors.

Strategies for Traditional Banks to Stem the Talent Drain

Emphasize Company Strengths

Traditional banks should highlight their inherent strengths, acknowledging that FinTech perceives them as platforms for innovation. The banking sector’s myriad opportunities for career growth, stability, diverse benefits, and exceptional working conditions need greater emphasis to align with the evolving aspirations of prospective employees seeking excitement and perks.

Identify Weaknesses and Foster Change

Banks must implement new evaluation mechanisms, like exit interviews, to identify shortcomings leading to employee turnover. Competing against FinTechs and tech giants necessitates offering unique benefits, such as flexible work arrangements, appealing especially to diverse talent living away from central office locations.

Collaboration with FinTech

Rather than competing, banks should establish collaborations or dedicated groups to engage with existing FinTech entities. Partnering with innovative FinTech services can augment the banks’ offerings while providing career avenues for employees seeking novel approaches within traditional banking. This collaborative approach positions banks for future growth and portrays them as digitally forward-thinking institutions.

Consideration of Employee Value

Lastly, recognizing and valuing employees is crucial for talent retention. Acknowledging employees’ contributions by offering incentives, bonuses, and growth opportunities fosters a culture beneficial for both individuals and the organization as a whole. This ethos ensures that employees’ efforts and ideas are appreciated, promoting loyalty and sustained productivity.