The majority (85%) of retail bank IT leaders acknowledge they will face an IT skills shortage within the next five years, according to research from Peru Consulting.

The report, Turn to face the Change, reveals that 41% of the tech bosses surveyed believe that the best professionals are likely to be lost from the ‘traditional’ banking sector in favour of the more ‘exciting’ GAFA (Google, Amazon, Facebook and Apple) companies. In fact, GAFA companies are seen as even greater skills magnets than the current fintech start-ups (cited by 37% of respondents).

The skills issue reinforces the fact that banks are going to need to increase their efforts significantly to recruit and retain the best people and knowledge. This in a sector where a lack of investment in new technology is cited by 30% of IT leaders as being their greatest challenge in keeping up with, let alone staying ahead of, the competition.

Ashley Pick, Principal Consultant at Peru Consulting, stated: “The banking market in recent years has seen an explosion of new entrants, with brands offering exciting cultures and ways of working.  In many cases suppliers or acquisitions have been used to fill the skills gap, but those also have come with their own difficulties.”

Commenting on Peru’s research, Gail Danvers, Director of PSD’s Banking & Financial Services business said: “The banks are experiencing an identity crisis that’s having an impact on talent attraction, particularly in technology. This is partly due to the negativity associated with banking following the credit crunch, but culture also plays a big part. 

“When choosing a company to work at, millennials are very careful to consider the culture. They crave an environment where innovation and entrepreneurship is encouraged, valued and rewarded, not a pure office-based environment where they are attached to a computer and measured by output rather than ideas.”

Gail Danvers added: “It’s vital for recruitment partners to have a good understanding of the client organisation and the challenges they need to meet, to help source the best talent with leading-edge technology skills. They should have cross sector market knowledge enabling them to encourage talent flow across industries.”

Peru Consulting outlines five steps that retail banks can take to help secure the best talent:

1. Learn from the competition.  Don’t rest on your laurels, actively look at the competition and what they are offering prospective candidates.
2. Play to your strengths.  Maximise the many positives you offer candidates, including employee rewards and training.  Seek feedback from your recruitment partners on how your benefit packages or overall company proposition compare in the wider market.   
3. Identify allies.  Whether from a recruitment supplier, potential acquisition target, or technology supplier, develop a thorough approach to securing the best partners to support you in securing the strongest talent. 
4. Accept who you are: A holistic approach to people management and retention is critical for a sector facing such significant competition from ‘shiny’ new challengers.  When focussing on your own talent, highlight your business values, why people should work for you and the values they should hold.
5. Make Your Relationships Work.  Where outsourced relationships are in place and are underperforming, look to rebuild the relationship through either a health check or a comprehensive review to ensure their own teams are fulfilling the potential you originally identified.