In his article for finews.first, Ralph Ebert draws on how to win the recruitment battle for compliance talents in banking against the fintechs.
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Since 2018, the financial landscape has witnessed a profound transformation propelled by the rise of fintech. These innovative companies leverage technology to revolutionize traditional financial services, disrupting the status quo and challenging the dominance of traditional banks.
This innovation in finance was not about doing the same things faster or cheaper. It's about doing entirely new things. Already 75 percent of the banking industry had started some sort of digitalization journey which was focused mainly on the following four areas:
- Focus on Customer Experience
- Cybersecurity and data protection
- AI and Automation for more efficiency
- Blockchain Exploration for more security.
The Rise of the Fintechs
With the arrival of the regulatory tsunami in banking because of the financial crisis of 2008, the internal IT departments of banks were just overwhelmed and fintechs used this vacuum of adequate internal resources and started exploring the sector via strategic collaboration models with banks.
Fintechs started to offer a diverse array of «ABCD» services: Artificial intelligence, blockchain, cloud computing, and big data. However, this seismic shift has sparked intense competition between fintechs and banks.
A New Talent Predator Was Born
The battle for compliance talents in banking started in 2020 with the arrival of fintechs as a new «predator». The compliance function in banking was not prepared for such sudden resource pressure as it got «lost in transformation»: The traditional compliance officer profile from the year 2000 onwards as a lawyer or accountant did not reply anymore to the new skillset needs because of the digital transformation such as data analysts, data modeling or statistical capabilities.
Moreover, compliance training and certificate programs failed to offer quick relief to provide such additional expertise. Nearly 90 percent of banks are still struggling to hire fresh staff or retain their current employees.
One of the Last Bastions of the Banks
In addition, the fintechs dared to enter one of the last bastions of the banks: an attractive salary package. An average salary for a fintech analyst in the US with $135,000 is suitable to enter competition with the salary level paid in banks. Consequently, this competition led to a global shortage of skilled compliance professionals. Here are seven strategies to win the battle for talent.
The following seven strategies will provide the opportunity for banks to win the «infinite game» for talents, as British consultant and author Simon Sinek would say, against fintechs as well as the FAANG (Facebook, Amazon, Apple, Netflix, Google)
1. Make compliance more attractive
Banks are considered by talents as an outdated and old-fashioned organisation There is a profound misconception that compliance roles lack innovation and opportunities for growth compared to other tech companies. The first step is to provide more insights into today’s compliance functions to increase attractiveness.
2. Personal growth
A recent study by Finextra confirmed that 90 percent of career starters consider personal development as essential for the job. This need opens the door for exploring partnerships and internship opportunities with universities and institutions to teach skills that you would specifically require for a particular role in compliance.
3. Flexible working model
The global World Economic Forum’s Future Jobs Report 2023 found that 83 percent of workers prioritize flexible hours, and 71 percent prioritize flexible locations.
Compliance has performed an enormous mindset shift during COVID-19 and disposes of flexible and hybrid working models that improve work-life balance, increase productivity, and promote talent retention.
4. Attractive salary packages
Banks still have overall a very attractive salary package to offer, for young talents including a financial allowance for personal study in learning a specific discipline, life skill, or leadership quality.
5. Job diversity
Many professionals appear to be treating compliance jobs as training grounds or career platforms rather than destinations – and this is not necessarily detrimental. The role of a compliance officer provides them access to all activities of the bank and will create interesting job opportunities.
6. Meaningful work
A 2021 McKinsey survey confirmed that 70 percent of respondents expressed the importance of purpose and meaningful work. The compliance function has a clear purpose attached to it: ensuring the organization’s stability, customer safety, and adherence to the rule of law.
7. Focus on soft skills
In a 2022 survey, it was revealed that about half (52 percent) of «Gen Z» say they are less confident with their soft skills which banks can address through dedicated mentorship programs.
The efficient implementation of fintech tools as part of the digital transformation depends on skilled humans. In particular hybrid talents with regulatory knowledge paired with data scientist capabilities will push the transformation of compliance to the next level and provide for momentum to win the battle for talents against the fintechs.
Ralph Ebert is a German lawyer with a career marked by his presence in senior compliance roles within global and private banking institutions such as BNP Paribas, Credit Suisse, UBP, Credit Agricole Indosuez, and Banque International à Luxembourg (BIL). With nearly two decades of experience in compliance, his specialization extends beyond Anti-Money Laundering (AML) into the forefront of digital transformation within compliance, regtech, AI solutions, and blockchain innovations. His YouTube channel «Compliance Coach» serves as an interactive hub, offering a unique perspective on compliance matters.
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