The financial services industry is in a near-constant state of change. From embracing digital banking in the 2000s, to the rise of fintech, Banking-as-a-Service and all of the new options available to consumers today, institutions have almost always been facing an ever growing need to evolve.
Today is no different.
Financial services firms must strategically differentiate themselves from the rest of the industry, whether that’s through new products, more competitive pricing, or by adopting tech-enabled services.
But there is one time-tested way for firms to set themselves apart in a way that can pay dividends not only today but over the long haul: Talent.
Winning in a rapidly changing competitive environment comes down to having the skills in place to embrace change and lead with authority. Companies that prioritize hiring the right people tend to share several winning attributes – better customer experiences, longer lasting partnerships and, ultimately, better revenue performance.
How should financial services firms prioritize talent now?
Make sure the right people are in the right roles
Everyone looks good in an expanding market. That’s why now is the time to upgrade talent for tougher market conditions, when they can have an outsized impact on performance. This is particularly important during evolutionary periods when new technologies and products are changing the face and function of the industry. It will take specialized talent for firms to adapt to this new reality, and it is critical that those with the right skills are working in the highest impact roles.
Fitting the right faces to the right responsibilities also comes with the benefit of preparing the firm for the next downturn. Those who know how to thrive in a difficult market also know how to build resilient systems that can weather future challenges. What’s more, cost cutting isn’t always the answer, particularly when there is an opportunity to add talent and grow while competitors shed qualified people.
Where can these people be found? Too often, financial services source talent from within the industry, poaching potential hires from competitors with the expectation that those prospects will have the necessary skills to hit the ground running. But this approach can turn into a liability, both in terms of access to new talent as well as new ideas. To truly differentiate in the market, those in financial services should look outside the industry at candidates in adjacent, tech-focused businesses and prioritize fresh, new approaches to the work vs. copying what every other firm is doing. High tech is a natural choice, but cybersecurity, Artificial Intelligence and even manufacturing are growth areas that employ a lot of tech talent and are worth consideration.
Invest strategically in innovation
Banking was an early adopter of digital products and experiences, with the first web and mobile banking services dating back to the early 2000s. Those efforts have made the industry vastly more accessible to the everyday American, and digital banking as a whole represents the next generation of financial services, but there is always room for improvement. What’s the next step in this evolution for those institutions looking to gain or maintain a competitive advantage?
It’s important to remember that digital transformation in the financial industry is about more than just technology and processes. Talent, mindset and organizational culture are also key factors, more so than in other industries given banking’s long entrenched conservative approach to its business. That’s why strategic investment in the next phase of tech-enabled innovation – including AI for personalized recommendations and insights, cybersecurity to protect customer data and prevent cyber attacks, and customer service chatbots for real-time assistance – needs to start with people.
By targeting and hiring the talent needed to support those efforts, firms can ensure that they are well positioned to claim a greater share of the market going forward.
Ignore geography to source the best talent
Not long ago, financial services firms were geographically limited in who they could hire. Those based in locations with a lot of skilled talent, such as New York City, would typically come out on top by simple virtue of access and convenience.
But things are changing. Remote and hybrid work environments have effectively eliminated this barrier to hiring, enabling firms to reap the benefits of broader access to talent and take a geographic agnostic approach to sourcing. By expanding their global reach beyond the traditional US-centric boundaries of financial services, firms will be better positioned to tap into a much larger talent pool and bring new skills to the table.
At the end of the day, the challenge for financial services is always to be proactive in adjusting to new conditions. Talent is the linchpin in all of this. That’s why, even now, the competition for new hires can be fierce. Firms that take a strategic approach to sourcing and managing the right skills for the road ahead will be better positioned for growth in a changing competitive environment.