Fintech Insider News: Debutantes and Diversity
It’s a bank holiday so none of you should even be reading this but if you are kudos on being as dedicated to fintech as 11:FS. You can catch the full Fintech Insider take on the news today at 4pm on the podcast here. We’re doing something a little different in today’s blog. Let us know what you think in comments below or at Fintech Insider News.
Fintech Insider hosts Ross and Sarah sat down with Sameer Gulati, Head of Policy and Regulation at Innovate Finance, Kathryn Harris, Innovation Lead at Lloyds, and James Hurley, Enterprise Editor at The Times to discuss the news, including one worrying report.
Fear in Fintech
One of the biggest fears around Brexit at the moment is brain drain. UK fintech is heavily reliant on global talent, especially so from the EEA. Companies are definitely worried about this issue. A paltry 29% thought their business would exist in its current state without EEA migrant workers. The number of fintech companies is approximately 1650 now and that number's set to double by 2030. This means there’ll be a major shortfall of skills, projected at a 3% workforce gap and direct losses of £361 million to the sector. 42% of the UK’s fintech workforce is from overseas, 28% of them are from the EEA. Only 14% are non-EEA migrants. Non-EU talent is represented to some degree but it’s lagging heavily behind.
International talent here supplements the UK talent pool and grows fintech talent - Sameer GulatiOne of the difficulties fintechs are going to face post-Brexit, is finding staff from to replace lost EEA workers. 62% of companies stated that EEA migrants are commonly found in computer and software development roles compared to 36% for UK nationals.
Where Will the Talent Come From?
To add even more worries to the pile, 45% of growth in digital and tech in the UK has its roots directly in the hands of non-UK born staff. There’s a great deal of political talk around hiring from the Commonwealth and building a relationship with China but that's some way off. A key driver of growth is the ability to hire EU nationals across a short hiring period and accessing their expertise almost immediately. Sameer notes: “Having more international talent here supplements the UK talent pool and grows UK talent.” It’s not difficult to see how losing access to that international talent is a bad thing for fintech in the UK.
The nightmare is a hard Brexit - Ross GallagherEven with the advent of fintech bridges to Australia, Singapore, Hong Kong, and South Korea there's little clarity. Nothing has yet been suggested on hiring foreign nationals that approaches the speed with which firms can hire EU nationals.
An Unwinnable Competition
General sentiment suggests hiring outside of the EEA and UK is simply not feasible for many fintechs. Visa rules are deemed too complex, expensive, and time-consuming for firms by 82% of respondents. Ross Gallagher comments: “The nightmare is a hard Brexit”.
Compete with the NHS for non-EU talent - James HurleyGovernment assurances that more visas will be made available for skilled jobs are promising, but that’s across all sectors. Including, most worryingly for fintech, the NHS. James Hurley comments: “It’s a scenario where fintech will compete with the NHS for non-EU talent” he and the rest of the panel agree that’s not a good thing. The last thing the sector wants to do is take jobs from doctors. Some fintechs are reacting more drastically than others in response to a potential skills-crisis. 46% said they were already changing their behaviour and of those 86% said they were considering relocating outside of the UK. Hopefully, this report and fintechs' reaction to it, will stimulate more concrete information from the government on where fintech can search for its new wave of talent. But it’s anyone’s guess when that information will come down. Don’t forget to subscribe to the Fintech Insider podcast here and comment below with any insights you’ve got to share or join the Fintech Insider News community here.