Editor’s Note: As new fintech companies continue to compete with traditional banks for customers, they’re also starting to compete for hiring the best tech recruits to further their digital transformation. Traditional institutions need new talent that understands how core banking systems and cloud-based networks work. As the push for digital customer services grows, the battle for talent will only get worse. That’s why it’s important that banks find partners with a team of experts who can walk them through cloud-migration and digital evolution as a whole.
The competition for tech talent is hitting banks hard, and many are stepping up their efforts to cope with it.
This battle is causing worker shortages at small and midsize banks: In a 2021 technology survey from Bank Director of 122 executives at U.S. banks with assets of under $100 billion, only 28% said they had a chief digital officer or equivalent, 25% had developers and programmers and 13% had data scientists.
Banks’ rivals for tech recruits include fintechs and nonbank technology firms that sell themselves on an innovation-friendly culture or flexible compensation systems that recognize newly acquired certifications, such as for cloud computing. All are losing employees who seek fulfillment outside of a traditional company.
“Banks are not just competing with other companies for talent, but with individuals who want to be doing other things with their lives,” said Bridie Fanning, talent and organization lead for banking at Accenture.
Financial institutions such as Citizens Financial Group, KeyCorp and M&T Bank have been training current employees to take on new roles, sourcing talent from more diverse pools and leaning on their reputation as trusted brands with an eye to the future when hiring.
For example, M&T, in Buffalo, New York, has made a concerted effort to advance technology talent not just within the company, but in the city of Buffalo. The $155.1 billion-asset institution has launched several technology training and apprenticeship programs in recent years.
Its Technology Development Program is an immersive training program for recent college graduates in software development. Its Tech Academy provides continuing education for M&T employees and other companies in the region. The latter includes a data analytics boot camp and the WNY Tech Skills Initiative, which provided free digital skills training for 3,000 people in western New York during the pandemic. M&T opened its Tech Hub in downtown Buffalo last year as both a workspace for employees and the home of its Tech Academy.
The bank is also addressing a need that Fanning cautions banks not to overlook: retaining employees familiar with mainframe and legacy systems, even as they move full steam ahead in cloud adoption.
The Z Development Program, or ZDP, trains entry-level technologists in collaboration with IBM and other organizations to support core banking functions that run on M&T’s IBM Z mainframe. The bank hired its first cohort of 10 apprentices in 2021 and recently brought on 13 more.
“Banking continues to leverage the mainframe, but it is not necessarily where the RITs [Rochester Institute of Technology] or Georgia Techs or Carnegie Mellons are training anyone in those languages,” said Mike Wisler, chief information officer of M&T. “That [programming] language is underserved by the more traditional pathways in universities.”
Citizens Bank, in Providence, has also leaned into reskilling and upskilling its own employees. Several years ago the bank decided to change tacks from buying software for mortgage loan origination, student lending origination, and more, to building applications in-house. Technical employees who were hired as computer engineers had moved more into program management or had outdated skill sets, which made the bank more dependent on vendors.
“We had lost some of that engineering muscle,” said Michael Ruttledge, chief information officer of the $188 billion-asset Citizens.
To rectify that issue, the bank has reskilled about half of its engineering workforce and hired 400 engineers over the past two and a half years. It launched a nine-week engineering academy that teaches employees how to write modern code, build application programming interfaces and use modern development practices, such as DevSecOps (or development, security and operations, an approach that integrates security into software development) and automated testing. It has also introduced boot camps and hackathons that cover topics such as full stack development and machine learning. It’s partnered with organizations such as Girls Who Code and Year Up to recruit a more diverse workforce.
“It’s critical for technologists to be in an environment where they are constantly offered more learning and projects where they can stay at the leading edge of technology,” said Fanning. “People entering the workforce today don’t want to be out of date in five years.”
KeyBank in Cleveland is looking forward with Future Ready, a program created in 2018 by chief information officer Amy Brady that encourages continuing education by giving employees in Key’s technology, operations and services division time to take courses and shadow colleagues. An offshoot called Tech Ready gives strong performers in operations or services the opportunity to start a new career path, by way of a coding bootcamp. Key has trained 34 employees for technical roles through this program, more than 40% of whom are women.
“We wanted to be very upfront with our employees that in the future, there are jobs at Key that may change,” Brady said in a July 2021 interview. “We’ve tried to be very transparent about where we are shifting.”
The $182 billion-asset bank introduced a technology onboarding program in January 2021 that educates new hires about such roles at Key so they can better understand the bank’s culture and vision. In 2022, it plans to build “career playlists,” or training and development journeys that employees can opt into to gain emerging and niche skills.
Recent Accenture research has shown that a collaborative culture and flexibility are key to retaining bank employees over the long term.
When recruiting, banks are casting themselves as both stable and innovative places to work.
“We are big enough to have access to the kinds of problems to which someone with great technical skill wants to apply their craft,” said Wisler, noting that M&T will become larger when it closes its acquisition of People’s United. “At the same time, we are small enough to be nimble, to feel like you are part of something.”
Citizens characterizes itself in a similar vein. “The type of engineering caliber that goes to fintechs tends to be people interested in problem-solving and unique technology,” said Ruttledge. “We have that.” He says marketing the bank’s “next-generation technology strategy” has attracted new employees, including from fintechs.
Greg Keeley, senior executive vice president of platforms and technology at TD Bank Group, acknowledged in a January interview that it is going after the same talent that technology firms are pursuing, including those skilled in agile, automation skills, AI and cloud. The Toronto bank plans to hire 2,000 technology employees this year on both sides of the border and hopes that its pivot to what it calls a “platform approach,” where teams work more collaboratively rather than in silos, will reel new prospects in.
Another tactic banks can use during recruitment is to open up the pool to consider people with “adjacent” skills and hire for that potential, said Hicham Zahr, head of insights and analytics at Eightfold AI, a company that uses artificial intelligence to identify talent.
“There is no need to tap into the same resource pool of Python developers,” Zahr said. Instead, recruiters could consider people skilled in the programming languages Java, C++ and R, who could likely learn Python.
“It lets you expand your pool of talent,” he said.