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Why Banks Are Failing to Attract Tech Talent
March 19, 2014

While big banks are trying to recruit more employees with engineering and technology expertise, they are often losing out to startups and tech giants like Facebook and Google. American Banker editors discuss the perks, better compensation and cultural changes that banks would need to offer to get ahead in the war for talent.

Comments (7)
It's not really that difficult. Banks spent years and millions (if not billions) outsourcing engineering jobs to the lowest bidder, which resulted in a lot of engineers who are out of date or unskilled.

Top talent (real A players) are the most attracted to workplaces with a lot of other A players. No one wants to work on a team with other members that are barely competent.

I'm generalizing, because I've met some brilliant engineers at banks, but they are exceptional.

Offer comparable compensation, align A players with other A players, provide autonomy and the ability to continually develop skills, and there will be a turn around. Most banks are probably not willing to invest given they shifted their strategy a long time ago.

Posted by sam_sach | Wednesday, March 19 2014 at 11:58AM ET
One other issue is the impact of high tech salaries on the rest of the bank. How will the high salaries needed to attract the tech talent play with the other employees? It's easy to say that your other employees just have to understand the market for tech talent but, I can tell you from experience many employees don't buy that. In tech companies, tech/engineering employees are the front line, in a bank they are support staff. From the tech employees side, it is also an issue of perceived lack of upward potential. Today, there are few examples of tech people rising to the executive suite, especially at small to mid size banks. I'm not saying this is correct or can't change over time but, it is a much more complex issue than just paying more to attract talent.
Posted by BobViering | Wednesday, March 19 2014 at 1:01PM ET
Banks over the years have treated the IT organization and IT talent much like a necessary evil and "pure" overhead cost. When in fact the IT talent pool can make the largest impact to the Bank's bottom line by automation of tasks for back office as well as field and branch personnel. Through Business Intelligence and Business Analytics IT can also impact the Sales Revenue by helping the "revenue generators" target their customers more accurately?

Banks should also put in place a structured process for IT personnel to move up the organizational chart within the institution much like the "GE/Jack Welch Method".

Financial institutions must also realize that it isn't always about money that will entice great IT talent to join them. Most IT workers are just like the rest of the employees of the bank in that they desire to make a positive difference in the company and be recognized for it.

Posted by TGNTR | Wednesday, March 19 2014 at 6:38PM ET
I would say, given the state of technology and it's ubiquity in our day to day lives, banks should drop the "IT as support" mentality. Technology is a core competency and something that provides real competitive advantage. Self service is going to be game-changing for retail banking and employees will have less and less impact in processing transactions, taking deposits and other miscellaneous back-office operations and have more of an impact to the customer experience as advisors and experts.

Banks need to start emphasizing the human element where it's most important and invest heavily in technology capabilities to augment.

With that being said, some technology solutions just aren't mature enough yet to fully rely on. I can't tell you how annoying it is to speak to a recording when the entire phone interaction could take 2 minutes on the phone with a human.

Posted by sam_sach | Thursday, March 20 2014 at 3:17PM ET
I agree with the earlier comments that tech people are considered support and a necessary cost. That may change when banks realize they have to compete on tech.

This happened with "quants" in trading at investment banks in the 80s. Math based software, especially for derivatives, were the drivers. Nineties hedge funds were also quant driven.

More cynically, banks could take advantage of the non-accidental lack of diversity in "Silicon Valley" and deliberately go after minority software engineers. They actually exist!

Posted by stochastics | Thursday, March 27 2014 at 4:35PM ET
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