How banks can win the struggle for tech talent

It’s no secret that tech matters more and more to the banking industry.

Goldman Sachs CEO Lloyd Blankfein calls the investment bank a tech company — and roughly 25% of its 33,000 employees are engineers. JPMorgan reportedly employs 50,000 technology workers (including a former Google artificial intelligence executive), which is nearly double the total number of employees at Facebook. And Morgan Stanley recently announced the creation of a new executive role to lead the company’s tech transformation.

And it’s not just an arms race against giants. Regional and smaller banks must also invest in technology — and thus tech workers — to manage governance, risk and compliance.

But as banks search for tech employees to join their ranks, they’re competing against Silicon Valley giants like Google, which can make it tough to attract the best software developers. Part of the problem is that many financial institutions are still holding on to outdated thinking about how the job market for tech talent works. There are several harmful myths that make it harder for banks to recruit these employees that they need to banish if they want to make the transition to a tech-led operation.

The first myth is that attracting talent tech workers is all about the perks. Goldman made headlines last year when it relaxed its dress code to appeal to tech talent. JPMorgan moved its tech team to a modern, open floor office complete with a dedicated space for foosball.

It’s tempting for employers to believe that copying Silicon Valley culture is the key to attracting tech talent. But it’s not these perks that have the biggest impact — it’s understanding what engineers care about. A recent survey by HackerRank asked 40,000 programmers what they look for in a job, and 43% said they desire to solve interesting problems — perks came in nearly last.

Software developers don’t join Google and Facebook because of the perks. They’re drawn to these companies because they get to leverage massive data sets to build services that billions of people use every day. Banks can and should compete on that playing field — and think less about buying foosball tables in bulk.

Another myth that needs to go: the idea that a developers’ familiarity with a bank’s brand is enough. Names like Citigroup, AllState and American Express are recognizable worldwide. But in order to truly attract developers’ interest, banks should focus on the technological problems they’re solving and what kind of impact their code will have on the world. Are they open to using modern languages? Frameworks? Development methodologies? Banks must prioritize these components first when selling a technical job description.

Banks need to focus on selling their vision and unique impact to job candidates. Whether an engineering team is developing machine learning for fraud prevention, new digital wallet capabilities, a blockchain project or something else, financial institutions need to ensure that prospective workers are aware of the exciting projects they could be part of at the company.

Similarly, banks should demonstrate that their company is up to date with the latest tech trends and that they have a pulse on the developer universe. Goldman Sachs and Visa have realized the power of leveraging engineering blogs, while Citi hosts developer meetups. Every engineering team should actively participate in influential developer communities, like HackerNews and Reddit, to increase their visibility and credibility among the programmers they’re looking to attract.

At the same time, banks need to stop looking solely to New York and San Francisco to make their hires. There’s no denying that today’s big tech employers are mostly in these two cities, but it won’t always be that way. The competitive talent market in the U.S. and recent immigration policies are forcing companies to look outside New York and San Francisco for tech workers. And, as it turns out, there are great developers all over the world.

Many financial services firms already have established regional operations in London, Amsterdam, Frankfurt, Sydney and Singapore. Banks should consider tapping into local talent pools in these regions to build engineering teams in existing satellite offices.

Even better, financial institutions should establish development centers in places based on the particular prevalent skill sets. Countries like Singapore, Finland and New Zealand have booming developer hubs, and Eastern European countries like Poland, Bulgaria, Hungary and the Czech Republic have some of the best untapped pools of talent. In fact, there are already signs of a nascent fintech hub emerging in the region, and BlackRock recently opened a data and tech office in Budapest for this very reason. Meanwhile, Toronto was reported to have the fastest-growing tech jobs market last year.

In the U.S., banks can look to Wyoming for strong engineers in algorithms or data structures. Meanwhile, Washington, D.C., and Hawaii are home to developers with the strongest functional programming expertise, and Oklahoma and Delaware are leading the way in math.

This bodes well for the regional banks that have presence in these states where cost of living is lower but quality of life may be higher. The sense of purpose, impacting one’s own community, direct access to leadership and the growth opportunities that come with increased responsibility at smaller institutions can carry as much weight as resume-building brands and higher pay in a high-cost-of-living city.

A final myth that banks need to bust is the notion that tech is a single skill. In fact, a developer connecting to a stack to the Zelle payments network is doing far different work from somebody carrying out a “know your customer” analysis on new users. Banks need to optimize the hiring process so that it’s better focused on the specific skills they need.

Many companies require expertise in certain languages or frameworks, but in reality, what hiring managers really want are critical thinking and problem-solving skills. Companies also focus on the wrong attributes: Resumes, for example, showcase where candidates went to school and years of experience, but don’t provide insight into core critical-thinking abilities. Banks hiring for new tech talent need to think through problems that reflect the actual work that developers will do.

If banks want to attract and hire great engineers, they need to stay competitive, make sure they’re building a developer-first culture, go to where the talent is and spend their time on the right candidates for the role.

The war for tech talent is no longer just between the tech behemoths like Facebook, Amazon, Netflix and Google. Today, developers have fascinating new problems to solve in every aspect of the way we live. Pick an industry — any industry — and you will be hard-pressed to find one that is not investing in digital transformation redefine the industries they operate in. The war for tech talent is real and it is here and now.