An aggressive recruitment market may hinder startups operating in Scotland’s fast-growing Fintech industry, according to Fintech sector professionals (from Origo).
Supported by a £300 million UK Government investment this past August, Edinburgh’s Fintech sector consists of various financial services innovators, however, newcomers seeking out new talent face a “hot market” which makes it challenging to acquire the skills-set required to establish operations and start doing business.
Anthony Rafferty, CEO of the United Kingdom’s original Fintech firm Origo, stated that the recruitment crisis had changed significantly in the past few years and was on track to become more challenging, meanwhile, Head of Growth at ePOS Hybrid, Andrew Gibbon, pointed out that opportunities were outstripping available talent in all key areas.
The Fintech experts were speaking as Core-Asset Consulting released its seventh Annual Salary Guide which is a forensic review of current salary levels and key developments in Scotland’s financial services industry.
Origo has reportedly been in the Fintech sector for 3 decades and is one of a group of providers assisting with delivering the UK Government’s Pensions Dashboards Program.
Rafferty, a member of Fintech Scotland’s advisory board, commented:
“Fintech is thriving in Scotland and our excellent universities are producing a pipeline of really good candidates, but on a UK level there is a shortage of specialists and experts. Fintech is a hot recruitment market, which is testament to the number of firms which warrant good developers, testers and business analysts, but with wage inflation and higher expectations from candidates, there is no doubt it is becoming more difficult to find the right skills than it was just a few years ago.”
Edinburgh’s hospitality tech specialist, ePOS Hybrid, is now recruiting in various areas but stated that “aggressive recruitment” is quite common throughout Scotland’s Fintech industry and particularly in the capital.
Andrew Gibbon remarked:
“Organizations are fighting over the same limited talent pool within Edinburgh and Scotland and start-ups are the ones missing out on the crucial talent they need to scale and attract new investment. The more businesses struggle to recruit locally, the more they are going to turn to remote working options to fill the businesses critical positions. Many businesses, including ePOS Hybrid, are being forced to begin recruiting nationally and offer remote working positions as candidates simply cannot be found locally.”
Core-Asset’s annual review revealed that the current skills shortage was due to Edinburgh’s reputation as a key European financial service center dove-tailing with the growth of an innovative Fintech sector in which various players covered the spectrum of financial technologies.
Louise Powrie, Divisional Director, Permanent Team, Fintech and Pensions with Core-Asset, remarked:
“The supercharging effect of Covid-19 resulted in an extreme stress test for the industry which, enabled by technology, it passed with flying colours. The sector has proved extremely resilient to the current global crisis and is emerging successfully from the pandemic. Its continued growth centres on the development of tools and software solutions to meet the need for more user-friendly platforms and applications, seamless data flow, AI-assisted dashboards, enhanced risk management, dynamic data management, online payments and transactions, and the functionality of the digital marketplace.”
“Our report points to a demand within fintech for business analysts and developers, particularly those with cloud technologies, and technical and solutions architects and engineers who can work with clients to truly understand their needs and provide innovative solutions. The sector is well-embedded in truly agile working practises, and as such, has continued to recruit without challenge and will keep on doing so into 2022, with remote working being the norm.”
As noted in the update, remote working was a key theme that was echoed by Origo and ePOS Hybrid and a trend that is expected to grow.
Anthony Rafferty commented:
“In addition to being the catalyst which has pushed businesses towards digital solutions, Covid has been responsible for firmly establishing working from home. Our initial fears at the start of lockdown was that productivity would drop, but the opposite happened and working from home has really suited this part of the financial services sector. The idea of only recruiting people locally or within 30 minutes of Edinburgh is no longer the case and is totally outdated.”
Andrew Gibbon stated:
“Our difficulties in finding suitable candidates locally is by far the biggest factor in limiting business growth to date. Opportunities are currently outstripping available talent in all key functions, resulting in businesses having to invest far more resources into finding the correct candidates or looking further afield for the skillset required.”
The extensive industry report highlights payment solutions, accountancy software and blockchain tech or DLT as mainstream Fintech solutions but with cross-sector corporate applications, leading to various other skill-sets now being sought after, including legal, marketing, policy and regulation.
The report notably forecast that during 2022, one of the important industry themes will be the unbundling of pensions/financial services and its “re-bundling” around an all-digital architecture, putting Fintech at the core of the industry.
“As financial service products have started to be unbundled and repackaged around digital architecture, the market has become more competitive, and the line between traditional pensions products and fintech services and platforms has blurred. New market entrants have emulated mainstream providers, embedding themselves in the financial technological ecosystem, and traditional firms operate much more like tech companies.”
Louise Powrie thinks that as national Governments and financial regulators introduce additional regulatory “burdens,” there will be key opportunities for other skill-sets, such as those with experience in risk and compliance and financial crime.
“This broad matrix of requirements is placing pressure on the increasingly complex interaction between the technology, risk, compliance and procurement functions in international firms and financial institutions. Regulators in major markets are adopting divergent approaches to monitoring effective risk management for fintech firms. A key challenge is determining how policies should evolve to address both novel market activity and traditional market activity – deploying frameworks that foster innovation, whilst managing regulatory risks effectively.”
Core-Asset claims to be Scotland’s leading recruiter in the financial services industry and has access to key insights from numerous candidates and Scotland’s major employers in the sector, which accounts for around 7% of Scotland’s GDP.
Its annual Salary Guide is a report produced on the Scottish employment market which regularly benchmarks salaries and jobs in Scotland. The data and numbers produced in it provide a vital alternative view to the usual London-centric reports.
The report shows how Scotland continues to build out its solid reputation as a major hub for larger internationally-based investment operations businesses, continuing the trend that began in the mid-1990s when companies started relocating technically complex operational roles to Edinburgh and Glasgow.