Fintech and It’s Implications

Fintech and Its Implications

Fintech has revolutionized the way we interact with money and financial services. Its implications are far-reaching, reshaping traditional banking, investment, insurance, and payment processes. Fintech innovations have not only made financial services more accessible and convenient but have also created new career opportunities and skill demands.

The digitization of financial transactions, the rise of blockchain technology, and the advent of artificial intelligence-driven financial advice are just a few examples of fintech's profound impact. However, this disruptive force also brings challenges, such as cybersecurity risks and evolving regulatory frameworks, that must be carefully navigated. In a world increasingly reliant on digital finance, understanding fintech and its implications is essential for individuals, businesses, and policymakers.

As FinTech gains momentum year-on-year, there is a huge demand for professionals with specific FinTech skills. The global skill gap for candidates with tech experience was a significant concern in the technology industry and many other sectors. The technology sector was experiencing rapid growth, and the demand for tech talent was outpacing the supply. Some key points related to the global skill gap for candidates with tech experience are High Demand for Tech Skills, Shortage of Specialized Skills, Geographical Disparities, and Rapid Technological Advancements.

Some of the skills that are required are as follows –

Blockchain Technology: The surging demand for Blockchain experts is intrinsically linked to the explosive growth of the cryptocurrency sector. In the past decade, the remarkable surge in the value of digital currencies, such as Bitcoin, XRP, and Ethereum, has sent shockwaves through the traditional banking industry. Blockchain, as the foundational technology behind these cryptocurrencies, operates on a unified, shared, consensus-driven ledger system that facilitates global financial activities like lending, transferring, trading, and reconciling of funds. While the theory behind Blockchain is widely recognized, its practical implementation remains challenging to grasp. Consequently, there is a scarcity of individuals who possess the ability to comprehend the intricacies of this ecosystem and construct applications within its unique environment.

Programming: The innovation-driven FinTech sector relies heavily on a cadre of highly skilled software engineers proficient in crafting mobile applications, websites, and comprehensive full-stack platforms. Moreover, the industry demands the expertise of qualified programmers and developers for the creation and maintenance of Application Programming Interfaces (APIs) for novel products and services. The continuous enhancement and upkeep of these offerings further necessitate their involvement. While mastery of programming languages remains a prized attribute, those programmers who can also boast advanced mathematical and quantitative capabilities alongside analytical and logical thinking skills will undoubtedly position themselves at the forefront of the competitive landscape.

 Machine Learning and Artificial Intelligence: The FinTech sector continues to draw an increasing number of individuals, a trend propelled by the widespread accessibility of the internet. As technology reshapes and redefines financial services, it generates copious amounts of valuable data that necessitates thorough scrutiny, analysis, and interpretation. To excel in this field, proficiency in technologies such as Machine Learning, Artificial Intelligence (AI), Big Data, and Deep Learning is indispensable. Familiarity with predictive modeling techniques like logistic regression and decision trees is also advantageous. These competencies empower companies to extract meaningful insights from raw data and gain a deeper understanding of their clientele. The fusion of intelligent machines and adept human professionals additionally facilitates the implementation of automation practices, rendering services swifter, cost-effective, and more dependable.

 Cybersecurity Expertise: The omnipresence of the internet within the financial services sector has given rise to a novel category of cyber criminals. Among those most susceptible to these security threats are FinTech startups. These attacks not only bear monetary consequences but also inflict more intangible yet profound effects. They encompass information loss, tarnished reputations, strained business partnerships, substantial legal repercussions, and potentially negative impacts on employee morale, which, in turn, could elevate attrition rates. 

According to a report, the cost of cybercrime is projected to hit an annual $10.5 trillion by 2025, according to Cybersecurity Ventures. By the same token, Gartner analysts predict that over the next two years, 45% of global organizations will be impacted in some way by a supply chain attack. As cybercriminals become increasingly adept and cyber-attacks on financial platforms grow in sophistication, the need for specialized cybersecurity professionals continues to expand. Nonetheless, there exists a substantial disparity between the demand and supply of expertise in this specific field.

Interpersonal: In the dynamic and disruptive realm of FinTech, success often hinges on more than just technical prowess; individuals with a high emotional quotient (EQ) are better poised to thrive. Beyond technical skills, essential interpersonal aptitudes include the capacity for effective collaboration, teamwork, relationship building, idea sharing, and conflict resolution. Moreover, the FinTech sector, particularly within start-ups, confronts an array of technological, legal, and regulatory challenges, alongside unforeseen events. To navigate these complexities, FinTech professionals require analytical and critical thinking skills that enable innovative problem-solving. Agility and adaptability are paramount attributes, as the industry undergoes rapid transformations. A steadfast adherence to conventional practices can prove detrimental, as what proved effective in the past may not yield similar results in the future; hence, resistance to change can pose a threat to one's career progression

Below are several skills commonly found in the majority of fintech job listings:

Transparency: Fostering open communication is highly advantageous. An individual who is open to collaboration tends to excel in effective communication, seeks assistance promptly, and, consequently, handles challenges with greater efficiency compared to someone who prefers working in isolation.

 Problem Solving: An employee adeptly resolves numerous challenges each day, some might argue. Nevertheless, this notion underscores a mindset shift. An employee should proactively seek opportunities to enhance current outcomes. Swift thinking plays a pivotal role in problem-solving, leaving no room for indecision or alarm—only determination and a methodical analysis of the situation.

 Communication: This pertains to the extent of a person's integration within the team, not only during work but also in their interactions outside of formal processes. Effective communication facilitates more streamlined collaboration among departments and teams, ultimately yielding greater advantages. It is crucial to nurture robust connections within the team, as this fosters a willingness among each team member to tackle challenges, not only for their own sake but also for the benefit of their colleagues.

Transparency throughout the organization: This concept is particularly relevant to managerial roles. The era of startups has rendered traditional management practices obsolete. Secrecy and unequal treatment based on hierarchy are no longer valued. Contemporary thinking promotes the idea that CEOs should relate to junior developers on a human level. When managers openly engage in discussions, whether they pertain to casual matters or project details, with team members regardless of their positions, it fosters a sense of unity within the team. This cohesion proves immensely advantageous for the company.

 Adaptability: In the dynamic atmosphere and workflow of a startup, challenges inevitably arise that require individuals to address them, irrespective of their skills or roles. Versatility and adaptability are indispensable qualities for employees aiming to advance their careers within startups or similarly fast-paced digital environments.

Furthermore, several burgeoning fields within this industry deserve attention, and a few noteworthy ones include:

Application Developer: The Fintech applications market has witnessed remarkable expansion in recent years, marked by record-breaking global app downloads and consumer expenditure, as highlighted in recent reports. The escalating demand for mobile payment solutions and personalized financial services continues to surge, driven by the preferences of tech-savvy younger generations. Millennials exhibit a propensity for securely executing transactions through their mobile devices. Consequently, the coming years are poised to see an increased demand for financial technology app developers, serving this burgeoning market.

Financial Analyst: A financial analyst plays a pivotal role in overseeing budget management in alignment with income projections. Depending on the organization's size, one may serve as an analyst for a specific department or the entire company. These professionals compile financial reports, conduct revenue forecasts, and engage in comprehensive business analyses. The burgeoning financial services sector demands the expertise of financial analysts not only to effectively manage revenue but also to engage recent graduates in client interactions, where they analyze data using the startup's or company's proprietary tools and technologies.

 Overall employment of financial analysts is projected to grow 8 percent from 2022 to 2032, faster than the average for all occupations. About 27,400 openings for financial analysts are projected each year, on average, over the decade.

Compliance Expert: As the regulatory demands in the fintech sector continue to expand, there will be an increasing number of professionals specializing in compliance, including compliance experts, compliance officers, and compliance analysts, who will play pivotal roles within financial institutions. In fact, according to Reuters, the finance sector, particularly in compliance, legal, and risk domains, has exhibited consistent job growth since the financial crisis. The Wall Street Journal has even identified the role of compliance officer as one of the most sought-after positions in the country.

The projected compliance analyst job growth rate is 6% from 2018-2028. About 81,800 new jobs for accountants are projected over the next decade. Compliance analyst salaries have increased 7% for compliance analysts in the last 5 year.

Data Specialist: Data plays a crucial role in understanding the trends shaping the financial services industry. Emerging innovations are affording financial companies access to novel datasets, including social data, thereby enabling fresh perspectives on markets and customer behavior. With clients increasingly empowered by the Internet and digital technologies, they seek proactive, personalized financial services. Consequently, there is a growing demand for professionals such as data scientists, chief data officers, financial data analysts, and data analytics managers who can sift through data to glean deeper market insights.

There is a high demand for data analysts. The data analytics market size is projected to grow from $7.03 billion in 2023 to $303.4 billion in 2030 at a CAGR of 27.6%. The sharpest increase is noted in the predictive analytics segment. The growth is expected globally, but the US accounts for most of the global market share.

The data skills gap affects most industries worldwide and means that there will need to be a huge increase in people switching to careers in data analysis.

In our contemporary world, technology plays a pivotal role in supporting various aspects of our lives. Given the flourishing nature of this sector, addressing the worldwide shortage of talent within finance necessitates the early cultivation of essential skills. By instilling these abilities at a young age, we can nurture a generation of financial professionals who possess a profound understanding of technology and its vast potential. In doing so, we are not only equipping them for successful careers but also propelling the finance industry into a technologically advanced future.

To proactively prepare for the future of finance, governments and businesses should collaborate with educational institutions to cultivate fintech expertise within their domestic talent pool. Integrating appropriate educational programs is pivotal in equipping students with the skills they will need to navigate the evolving financial landscape. Fortunately, millennials, Gen Z, and subsequent generations are well-positioned to adapt seamlessly to this sector's transformation, having grown up with smart devices, connected homes, and online learning. However, educational institutions must deliberately embrace this curriculum, especially within their financial studies, to empower current students as future trailblazers and innovators in the field of finance

Fintech looks promising, with continued advancements on the horizon.