Market leaders such as JPMorgan and Deutsche Bank, spend billions of dollars on technology each year, from peer-to-peer lending to digital wallets and currencies. Global bank IT spending grew more than 4% to $188 billion last year alone, according to Celent, a research firm.
“Banks are starting to realize the full potential of digital technologies and their potential to disrupt and transform the banking industry,” says Richard Lumb, group chief executive for financial services at Accenture.
More than 70% of bank executives polled by Accenture expect their banks to increase investment in technology innovation over the next two years.
While the banks’ digital revolution has been slow to take root, it will interest anyone hoping to work in financial services. Technology is both redefining careers and opening up opportunities, with talent sought to innovate in areas such as mobile payments, investment banking, and online wealth management.
For Lloyds Bank, digital is a priority. “We continually invest in the latest technology,” says Nick Williams, consumer digital director at Lloyds Banking Group. The UK’s fourth-largest lender was the first to launch a bespoke digital recruitment scheme.
Speaking to BusinessBecause, Nick says working in digital at Lloyds is different to working at a “traditional bank” — employees are encouraged to develop innovative ideas.
“As technology continues to affect everything we do inside and outside of work, we will also seek different skill-sets, such as design expertise and software engineering proficiency,” he says, alongside more traditional commercial talent.
As large lenders come under threat from new players, they need talent to lead bold digital initiatives. Deutsche Bank for example, has said it will launch innovation hubs in London, Berlin and Silicon Valley to develop digital strategies, while Santander announced plans to become the first global bank to offer cloud data storage services to corporate clients.
Frans van der Horst, senior managing director at ABN AMRO Bank, says that because more customers are conducting their banking through digital, the Dutch lender is looking specifically for recruits with IT experience. ABN AMRO has invested €850 million in keeping its systems up to date.
“Clients are connected around the clock and want businesses to adapt their services accordingly,” he says.
Jennifer Boynton, assistant dean for the MBA Career Center at Georgetown’s McDonough School of Business, says that demand for digital skills is coming mostly from banks’ sales and trading desks.
There is a digital talent push in consumer banking too, she says, a sector where innovation has been brewing. Santander and Lloyds for instance are among the banks teaming up with retailers to offer personalized discounts through mobile apps based on spending pattern data.
“[We] have seen an ever greater focus on digital skills,” says Paul Schoonenberg, head of careers for Aston Business School. “A combination of digital skills, industry knowledge and client-facing skills is a powerful combination in the current market.”
The banks are reviewing their business models following the rapid growth of financial technology start-ups, according to a report from the World Economic Forum and Deloitte. UBS, HSBC, Visa and MasterCard have all met with leading global fintech companies like Zopa, Funding Circle and Transferwise to assess the competition. Others have sought to invest in, or partner smaller players.
Rob Galaski, banking and securities leader at Deloitte, says: “When we look at the disruptive potential of innovation we should not only consider the threats, but also the tremendous opportunities to reinvigorate our industry.”
Yet responding to this challenge is hard for banks, which are saddled with legacy IT problems. In recent months both Royal Bank of Scotland and HSBC have come under pressure over IT failures, which delayed payments for hundreds and thousands of customers.
The growth in number — and success — of early-stage fintech firms — investment in fintech start-ups quadrupled to $12 billion last year — is expanding the financial jobs market. Astbury Marsden, a recruitment firm, says fintech ventures are poaching staff from investment banks.
Roxanne Hori, associate dean of corporate relations and career services at NYU Stern, the business school, says that companies like MasterCard are also competing for talent with traditional tech businesses.
“To continue attracting top talent, they are carving out their niche and differentiating themselves from other financial services companies,” she says, highlighting MasterCard’s self-identification as a technology company.
Much of the innovation in the financial services sector has been in mobile payments, with the launch of Apple Pay, which allows iPhone 6 users to purchase goods with a whirl of their handset, spurring a race to innovate.
Mobile banking usage is expected to more than double over the next four years, from 800 million people to 1.8 billion, according to research by KPMG.
Manish Kumar, digital program manager at Barclaycard, says the integration of mobile phones will push mobile to become the dominant channel we use to access our bank accounts.
“The commercialization of mobile in-app payments and digital checkout payment options has made payments seamless for everyone, and moves away from the clunky traditional ways of accessing accounts,” he says.
As payment market leaders rush to develop new technologies, career opportunities are emerging.
Brian Ruggiero, VP of global campus recruitment at American Express, says Amex is targeting business school students to hire to work in digital product management, marketing, finance, and operations among other areas.
“We’ve needed to hire more people who can help us transform our business to lead in the mobile payment, digital and technology space,” he says.
He adds: “This presents endless opportunities for MBA grads — from working on Apple Pay to designing small business solutions, our employees have the opportunity to develop and deploy ground-breaking technology.”
He says Amex is also keen to see talent fluent in data clustering and statistical analysis.
Lenders are enthusiastic about making the most of the vast amounts of big data they hold on customers, although many are held back by concerns over privacy and the technical challenges that come from their ageing and complex IT systems.
“Turning data into knowledge and knowledge into added value services is a must for us,” says a spokesperson at BBVA, Spain’s second biggest bank.
BBVA has invested heavily in digital technologies. Between 2011 and 2013, it spent an average of €850 million a year on tech infrastructure such as data centres, and software development. Last year it bought Simple, a US digital bank, and Spanish start-up Madiva Soluciones. More recently it invested in Coinbase, a bitcoin start-up based in Silicon Valley.
“To be able to extract the full potential of the data, you need to have a state-of-the-art technology platform,” says the spokesperson.
They add that to build the top global bank of the digital age, “you need [to hire] the best people”.