The pandemic has brought about what McKinsey describes as a ‘quantum leap’ in both digital adoption and digital transformation. But such a significant change is not without problems, as concerns grow over the lack of digital skills in a waning tech talent pool. Many organisations, particularly in the financial service sector, are therefore left playing catch up.
In late 2021, Gartner found that talent shortages have become the most significant barrier to the successful implementation of emerging technologies. Take cloud computing – an almost non-negotiable for any business in 2021. Gartner predicted that close to $500 billion will be spent on global public cloud end-user spending. Organisations will struggle to both migrate to the cloud and maintain their cloud services without job-ready talent with relevant critical skills.
Defining what skills are needed
Companies seeking to solve the skills gap in cloud development firstly need to identify which skills are necessary. Though many of the capabilities needed to work in cloud development are similar to other industries, it is imperative that those in financial services have an airtight cloud operational and developmental structure. Not only is finance a risk-sensitive sector, but it is also an essential service. Therefore, it is paramount that cloud services run smoothly and effectively, with minimal cybersecurity risk.
This means that all facets of cloud computing must be covered when looking at cloud development in the financial services sector – from cloud architecture to security, operations, and governance. Similarly, IT team leaders will likely need staff with brand-specific cloud skills, especially hyperscaler cloud service providers like Amazon Web Services and Microsoft Azure.
Talented architects that can work across complex IT stacks and infrastructures are both hard to come by and expensive to secure. The most valuable engineers will actively familiarise themselves with current trends and new technologies and will be comfortable working in optimised teams based on skillsets, such as DevOps or even DevSecOps structures.
After identifying where talent transformation may be necessary and recognising which skills a financial services firm might be lacking, organisations can then begin to implement strategies to remedy this situation. That’s far easier said than done, particularly when looking to implement cloud infrastructure. Worryingly, just 13.6% of tech leaders believe they have mastered cloud security and compliance, according to Canonical, highlighting the challenge the industry faces.
Recruiting outside expertise
An obvious strategy to counter a skills gap is to ramp up hiring efforts and, in an ideal world, financial services organisations would have a large talent pool with the necessary cloud skills to recruit from. That just simply isn’t the case. Nearly half (46%) of IT business leaders have relayed that the skills shortage is slowing them down, and it remains tough to build good teams.
In the age of the Great Resignation, financial services businesses would be naive to rely solely on prospective talent. A recent Udacity and Ipsos study survey found that in the UK, 59% of employers were unable to hire new people with the technical skills they needed. And in the FinServ sector, where even more specialist knowledge is required, this talent shortage is surely only graver still. For that reason, the industry must tackle its cloud skills gap in different ways.
One such way to bring in cloud development skills is to onboard an external digital consultancy that can help with getting the necessary infrastructure up and running, circumventing some of the delays of a dwindling talent pool. Naturally, this will not be right for every business – bringing a consultancy on board is an added expense and not always a long-term solution given that more complex cloud developments require higher levels of ongoing maintenance and this requires a deep understanding of the business to execute. Nevertheless, bringing in an external consultancy is a proven strategy worth bearing in mind when tackling the cloud skills gap.
Digitally transforming your current workforce
Often the solution to a skills gap is closer than many organisations might think. Transforming the talents of existing staff can actually be the quickest and most cost-effective move, especially for those in the financial services sector that are likely already blessed with well-educated and intelligent employees. This is both a way around the competitive hiring market and a more long-term and financially sound alternative to hiring amid a digital skills crisis.
Financial services firms with the necessary job-ready skills in place will be those that lead the way. In May, Santander migrated 80% of its IT infrastructure to the cloud, becoming one of the first major banks in the world to digitise its core banking. Crucially, the lender achieved this by leveraging the talent within its team of more than 16,000 software developers and engineers.
A report on the Future of Cloud Banking found that while a lot of banks, in particular, talk the talk, only around a third of them have migrated more than 30% of their applications to the cloud, despite a broad appetite for adoption. A lack of cloud skills is holding back industry adoption.
Therefore, embarking on a talent transformation programme can be a game-changer for plugging the skills gap within an organisation. Partnering with organisations that specialise in developing the skill base of enterprise teams will allow financial service institutions to acquire the necessary talents to take their cloud infrastructure to the next level and play catch-up with those firms already far ahead of them.
Though the digital skills gap is daunting, particularly for a financial services industry that is increasingly leaning towards cloud system dominance, it is not an insurmountable challenge. By clearly defining what skills are needed, recruiting outside expertise to get the ball rolling, and looking inward to find a long-term solution that just isn’t available in the hiring market, banks and other financial institutions can deliver on their digitalisation goals and cut ahead of competitors.
