How far will your digital transformation need to go to ensure your bank or insurance company stays relevant in the market? And just how are you going to enable that with the resources that are realistically available to you?

Since about 2008, agile FinTech start-ups have been appearing everywhere, solving targeted problems for customers with asset bases of little more than a few cloud-based tools. Meanwhile, digital transformation among incumbent finance organisations is not, in the majority of cases, progressing quickly enough.

Back in 2018, Gartner predicted that financial services CEOs underestimate the degree of change that digital technology will bring. David Furlonger, Distinguished VP Analyst at Gartner, said, "Established financial services providers will have to move faster on digital business by building digital platforms." And Gartner also predicted that only 20% of "heritage firms" would survive in a meaningful way beyond 2030.

That continues to play out, with the latest World FinTech Report stating, "Tomorrow's industry success stories are being built today around a modern core, and mid- and back offices that are being extensively migrated to the cloud, so open platform and APIs can become a reality at scale."

So where are you in respect of all that?

Stuart Martin, Chief Client Officer at QA, said, "Most established financial services providers are still mired in the process of retiring their legacy mainframes. They’re trapped between a rock – where they’re paying an ageing, dwindling, yet essential and expensive workforce just to keep the lights on – and a hard place – where they can’t attract enough of the right talent to forge ahead."

There’s an acute digital skills gap in financial services

Even before the pandemic, McKinsey had predicted that demand for technology specialists would rise by almost 20%. The surge in digital service delivery caused by Covid has ratcheted that up significantly. Moreover, the 2021 FinTech Report quotes the 2020 UK Treasury report that found that Great Britain's financial services sector is "in the midst of an existential skills crisis as it fails to attract and retain new talent".

So workforce planning for digital roles has become a strategic imperative – and especially in financial services. If you don’t modernise – and soon – you simply won’t be able to keep up with evolving customer tastes, industry trends, or your ever-changing regulatory framework. Yet, how do you modernise if you don’t have the right people to do it?

A strong economic case for reskilling

According to McKinsey, there’s a strong economic case for reskilling current employees and new hires in about 75% of cases. That’s across the industry, generally, so it seems reasonable to expect the figure to be much higher for hard-to-fill digital roles.

Crucially, it’s your people – even more than technology – that will drive your digital transformation. So, what would you prefer to do: spend time pursuing the best, most expensive talent, who are more likely to churn? Or invest in reskilling your existing workforce – and upskilling more-accessible new recruits – to build a shared culture of innovation and success?

Save money on recruitment

Search time is expensive – advertising roles, interviewing candidates, negotiating salaries, and onboarding new recruits all costs money. It’s wasted if they don’t stay long enough to make a meaningful contribution. And what if you can’t find anyone anyway? All your effort is for nothing.

By contrast, a reskilled worker will cost about 20% less than an external hire, on average, and won’t need onboarding. They’re already invested in your business, and will most likely appreciate being invested in by your business. Indeed, skills training is the number-one choice of prospective employees when choosing what makes a great employer.

In turn that will boost morale, so drive stronger employee engagement, all while retaining much-needed skills and knowledge in house.

Speed up the pace of innovation

Nationwide – the largest building society in the UK – wanted to reduce its reliance on contractors and third parties by growing their own internal technology capabilities to meet their projected, growing demand across the next three to five years. QA was chosen by Nationwide to help create their Talent Development Program that would deliver this digital transformation and growth.

Working closely with Nationwide, QA designed an in-depth 12-week technology bootcamp, with teaching undertaken by trainers from QA’s renowned Technology Academy. QA created a bespoke curriculum to provide both a broad understanding of the latest technology landscape, as well as a deeper understanding of the specific skills required by Nationwide, including Cloud and Cyber Security. All training was delivered on-site at Nationwide’s premises. To date, more than 130 people have graduated through the Talent Development Program.

Boost resilience for continuous growth and success

Yet it’s perhaps defining an effective strategy for growth that’s most critical for banks and insurance companies right now. Understanding how to make the most of digital technologies to ensure you can compete with FinTech (and survive) is essential.

Yet, in an environment where you can’t recruit the skills you need, it’s very difficult to deliver that strategy piece meaningfully. Reskilling, therefore, opens up opportunities to – at last – gain access to the skills and expertise you need to escape from your rock and a hard place.

You’ll be able to build stronger teams with a shared culture, all advancing together using Agile working practices. And you’ll be able to deliver continuous growth and success over time by implementing the latest cloud technologies and improving your customer experiences.

Find out how to reskill your workforce and get new talent productive as quickly as possible – so you can modernise your financial services business and compete more effectively: speak to a QA expert today.