The fintech revolution is shaking up the traditional banking sector. Here’s the Vantage view on what this could mean for the tech jobs market …
More than two decades ago, it took the looming crisis of the year 2000 problem to force the banks to put competition aside (briefly anyway) and sit around a table to devise a solution together. It was hard not to see history repeating itself in the recent news that four of Ireland’s largest banks are forming a joint venture to develop a payments app that’s intended to compete with the likes of Revolut, Monzo, and N26.
A few short weeks later, Stripe’s massive funding round saw it reach the highest ever valuation for a private tech company in Silicon Valley: a colossal $95 billion. That’s partly due to Stripe’s sweet spot: the company is solving the unmet need of making online payments easy. Traditional banks have struggled with this problem for 30 years, and that’s left the door open to the likes of Stripe to come in and play.
And if we zoom out a moment to look at the bigger picture, some commentators believe this development tells us that commerce, not advertising, is becoming the dominant model for the internet economy.
So even as upstart fintechs are changing the game, it’s still all to play for. If all of this disruption is good news for the new arrivals, it could also be an opportunity for banks that want to fight back against the steady erosion of their market share.
In Ireland alone, Revolut claims to have more than a million users. Faced with a clear and present danger like that, banks have had to respond with ideas that would have been off the table in years past. They’re now thinking the unthinkable because they know that a failure to innovate could spell the beginning of the end. This isn’t your parents’ bank anymore.
At Vantage Resources, our take is that this level of activity will have a trickle-down effect on the market. Banks, as we’ve seen, are now busy looking at new alternatives to hold on to customers whose loyalty is being sorely tested.
They’re approaching this challenge in a few different ways. One approach, as we’ve seen, is to join forces. Another is to migrate to the cloud to gain the agility they’ll need. In other cases, they’re setting up separate operations, in parallel to the parent bank, that don’t need to rely on the bank’s legacy applications and business processes. This way leaves them better able to spin up and test new products and services quickly, so they can better meet the needs of today’s digitally savvy customer.
The end goal is the same: digital transformation. To become, in the words of one CIO, ‘a tech company that happens to do banking’.
Trends like this are already seeing banks hire high performers from the world of consultancy, or experienced tech professionals and solution architects that normally wouldn’t have looked at the banking sector as a potential avenue for their careers.
From the perspective of someone thinking about their next career move, all of this buzz in the market can only be a good thing. Suddenly financial services is looking much more attractive as a sector to work in.
We all want fulfilment in our careers. The sense that our work is making a difference and delivers value to the organisation. Right now, you can make the argument that banking is no longer the same old scenery: now it’s uncharted territory.
We believe this development has the potential to challenge the traditional view of tech jobs within banking. Instead of sunsetting legacy applications, it’s a new dawn that’s alive with possibilities. Now there are growing opportunities to work on some cutting-edge projects at banks that not only want these initiatives to work, they need them to.
Who wouldn’t want to be a difference maker in an environment like that?