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Skills gaps holding financial institutions back

Banking Circle research reveals roadblocks stopping Banks and FinTechs futureproofing their organisations

www.bankingcircle.com

London, 5th October 2021 – The latest study from Banking Circle has revealed the new challenges faced by CIOs and CTOs working in Banks and FinTechs. The insight from the Payments bank for the new economy found that more than half have skills gaps in their organisations that could hold them back from capitalising on the latest technology, seriously undermining their post-COVID recovery.

Key data

  • All FinTechs and 99% of Banks confirmed they have skills gaps in their organisation
  • 63% of FinTechs (56% of banks) expect to see their Payments IT team/resource increase in the next 12 months
  • 34% of all respondents are not confident that their recruitment plans are fit for purpose for the future
  • 35% of Banks are not confident that existing systems maintenance and infrastructure is future-proofed; 31% of FinTechs feel the same about their API technology
  • Across all respondents, ‘API technology’ will see the highest level of new funding compared to pre-Covid levels, with 44% planning more investment in the coming months
  • ‘Build’ or ‘Buy’?: FinTechs (66%) are slightly more likely than Banks (64%) to collaborate with external partners to solve their tech challenges

In July 2021, Banking Circle spoke to 600 Chief Technology Officers (CTOs) and Chief Information Officers (CIOs) at Banks, FinTechs and PSPs across the UK, DACH (Germany, Austria and Switzerland) and Benelux (Belgium, The Netherlands and Luxembourg) regions. The research has been published in a white paper ‘Futureproofing payments tech: The challenges facing CIOs and CTOs’.

“It was encouraging to see that the Banks, PSPs and FinTechs we surveyed remain generally optimistic about the future,” commented Anders la Cour, Chief Executive Officer, Banking Circle Group. “The pandemic has forced IT departments to make big changes to digitalise and futureproof their organisations, but it seems they are concerned about the distance still left to travel.

“FinTech CTOs and CIOs are kept awake at night by thoughts of tech outages, staying up to date with market developments and staff skills. Bank CTOs and CIOs worry about digital transformation projects. However, on a more positive note, increased investment appears to be a solution for tackling these concerns with plans cited for further funding in all areas of tech we looked at – from data access, data security and existing infrastructure maintenance to new systems procurement, AI/ML and API technology.”

Banking Circle found that tech budgets are increasing, but not by enough for CIOs and CTOs to sanction a complete overhaul of their tech or payments infrastructure. As a result, collaboration will be an important tool in futureproofing both Banks and FinTechs.

Two thirds of all respondents are planning to ‘build’ payments tech in-house, and the same number plan to ‘buy’ off the shelf. Only slightly fewer (65%) intend to outsource or utilise partnerships. Banks are most likely to buy off-the-shelf (71%) and PSPs and FinTechs are most likely to build solutions in house (70%).

Both Banks and FinTechs are almost equally likely to collaborate with external partners, but FinTechs (66%) are slightly more likely than Banks (64%) to take this route.

Anders la Cour continued, “To bring about the required transformation, respondents plan to employ a combination of building payments tech in house, buying ‘off the shelf' solutions and collaborating with external providers. The study found that Banks and FinTechs have yet to move their operations into the cloud, with close to half saying they have less than half of their IT or Payments systems in the cloud.

“Utilising cloud-based systems via an external partner is a faster route to gaining the flexibility, speed-to-market and competitive edge that being cloud-based can bring.”

Download the full white paper at www.bankingcircle.com/whitepapers

About Banking Circle

Banking Circle is the Payments Bank for the new economy. As a fully licensed bank, free of legacy systems, Banking Circle enables payments companies and banks of any scale to seize opportunities in the new economy - quickly, at low cost.

Banking Circle is a modern correspondent bank committed to building a local clearing network for all major currencies, to deliver the fastest, lowest cost payments, with no hidden fees for the beneficiary. It provides a suite of unique and award-winning banking solutions, including multi-currency banking accounts and Virtual IBANs, bank connections for local clearing and cross border payments, all underpinned by market leading compliance and security.

Through bespoke, flexible, scalable and futureproof solutions Banking Circle is enabling financial institutions to help their customers transact across borders in a way that was previously not possible.

Headquartered in Luxembourg, Banking Circle has offices in London, Munich, Amsterdam and Copenhagen.

For further information and interviews please contact the Banking Circle Press Office:

Wendy Harrison - Harrison Sadler

T: 0208 977 9132

E: [email protected]