FinTech industry in Europe Attracting Top Banking & Finance Talent
Traditionally, if you were a career-minded MBA fresh out of university, you would most likely find your way to London to work for one of the big finance or investment banks. With great pay packets and career prospects and challenging roles, it’s little wonder that finance and banking have long been the preferred choice of ambitious young go-getters.
Times Are Changing
Things have started to change, however, and data derived from Chicago Booth, Wharton, Harvard, London Business School and Insead has revealed that there has been a 20% drop in the number of MBA graduates entering the finance sector between 2007 and 2013.
Why the Change of Heart?
There appear to be a number of factors related to top graduates shunning the finance sector, and one of the most influential is the economic crash of recent years. Long gone are days of hefty financial perks and bonuses, and instead the sector has been dominated by increased regulation and reduced investment activities. For many eager graduates looking for a fast-paced career progression, this sector is just not proving as enticing as it once used to be.
Where Are the Top Graduates Going?
Statistics seem to show that those high fliers who would have once naturally gravitated towards finance are now instead attracted to the bright lights of the financial technology (FinTech) sector. From 2007 to 2013, the number of MBA graduates entering careers in FinTech doubled.
What Makes FinTech so Alluring?
The FinTech sector is booming. The success of global giants such as Google, Facebook and Spotify is infectious, and increasing numbers of sharp, talented graduates want to be a part of the FinTech success story. Investment is flourishing in the UK’s FinTech sector currently, where last year alone it grew by 136%. London is a particular FinTech golden hub, with the capital receiving 42% of all European FinTech investment last year.
Aside from investment and growth opportunities, it’s the progressive approach that many FinTech businesses are adopting that is especially appealing to ambitious graduates.
Graduates are no longer attracted to big pay cheques alone. A survey conducted in 2014 revealed that top talent is increasingly interested in aspects such as flexible working, a less hierarchical work structure and having a manager who is more of a mentor than a traditional boss.
Implications for the Finance Sector
Losing top talent to the FinTech sector is of paramount concern to the finance and banking sectors, and in order to start reversing this trend businesses will need to start offering the same approach as those leading the FinTech revolution. They will need to adapt to ensure they do not lose out on some of the industry’s brightest talents.
The regulation of the finance sector may begin to attract employees who may not have chosen to work there before, but it seems ambitious and entrepreneurial types are finding the sector less attractive.
The challenge for the finance sector is how to lure top recruits back, and for the FinTech sector, the challenge will be how to retain the new army of ambitious workers, especially as the industry begins to mature.
Increasingly, even senior people are taking lower salaries to begin at the bottom of startup FinTech businesses, aiming to capitalise on this growing industry that offers an exciting and challenging crossover between the two sectors.