How fast things change! Only five years ago, a mantra, issued and abused throughout the media, encouraged workers to “learn to code.” As the mobile/social revolution took root and tech exploded after the COVID crisis, young professionals saw big tech firms with huge signing bonuses and multi-six-figure salaries.
And now? Artificial intelligence is changing the game. Firms like Microsoft have reported that 30% of their new code is AI-generated. Recent college graduates with computer science degrees can no longer expect lucrative offers, and they are struggling with a 7.5% unemployment rate—higher than the national average.
The challenge is real, and it seems unfair to smart and hard-working Gen Z professionals.
But wait, bankers! Let’s rally the board and executive team and make some Gonzo lemonade out of this situation. Our industry has struggled to compete for top tech talent against frenzied big tech companies. NOW is the magic moment to open our arms and build a rigorous effort around next-generation technology talent.
Yes, AI is quickly taking over many tasks, but there’s still plenty of complex work to be done in banking for skilled and curious techies. From a marketplace perspective, banks must rebrand themselves as technology-first organizations that combine the fun and challenge of innovation with the stability of a good ol’ fashioned bank.
At this unprecedented moment with tech talent, here’s a challenge for bank executives to consider:
Execute a plan to invest an additional 1% of current employee compensation costs for the next three years in new IT talent, including recent grads and skilled workers displaced from tech downsizing. With this investment, build business cases to achieve an ROI.
For the typical $5 billion bank, this would equate to roughly $1 million in additional comp targeted each year to tech talent investment.
To support this talent strategy, banks can be more aggressive with their tech talent strategies. Consider these initiatives:
- Partner with colleges in your market to consistently line up interns and graduates
- Up the tech skills game by sponsoring the cost of technology certifications for rising stars
- Bring more visibility to tech inside your organization: hold hackathons and profile innovations from your techies to the board and all employees
- Build formal career opportunities for employees outside the IT department to gain technical skills and eventually move into IT roles
With a more significant investment in IT talent, banks can leverage new technical talent in these five major areas:
- Maturing the Cloud. Virtually every CIO in banking reports difficulty finding qualified candidates with cloud experience and certifications, and they also lament that using third-party resources proves too expensive. Leaders can cultivate expertise among young computer science talent like we developed credit officers and branch managers in the past. Banks can advance multi-cloud experts with AWS, Azure, and Google certifications and create young and eager DevOps engineers and cloud-native application developers. Some may even take a rising star and turn them into a valued CCSP—Certified Cloud Security Professional!
- Data Readiness for AI. Most banks are ill-prepared to effectively leverage AI because their data is fragmented and inconsistent. Today, there is a huge opportunity to turn the kids loose on a bank’s data classification efforts, possibly employing new AI tools to make it a more efficient process. From both a regulatory and business standpoint, improving the categorization and indexing of the bank’s data would pay huge dividends.
- Tool Acceleration and Agent Development. In the less than three years since the release of Chat GPT, thousands of generative AI tools have been introduced. Banks need gritty, hands-on professionals who can dig into learning new tools and find ways to leverage them inside the bank. In addition, banks can pair hands-on technical talent with experienced, but less technical operational managers. Imagine young, hungry, computer science graduate Peyton “vibe coding” with generative AI tools to help the veteran Tom in the risk management group. Forcing these collaborations can speed up how quickly a bank can get the ROI from technology.
- Messy Platform Integration. The average financial institution is mind-numbingly challenged to make its core systems, digital banking platforms, payment processors, and front-end delivery systems work in harmony. Banks that develop an in-house integration team can move faster than competitors by “hacking” the application programming interfaces (APIs) of various vendors, leveraging enterprise service bus (ESB) tools, and even orchestrating systems integrations through more “lightweight” and containerized approaches like Kubernetes. These are all gritty skill sets that can be developed internally at a lower cost than the major vendors charge today.
- Cybersecurity and Fraud. Cornerstone Advisors' research indicates that 48% of bank executives see cybersecurity as one of their top strategic concerns. Executives are concerned about their ability to fight cyberattacks and keep up with the technology necessary to remain resilient to hackers and fraudsters. With a shortage of financially focused chief information security officers (CISOs) in the market, building additional skills in-house is a no-regrets move.
Despite bold predictions, the banking industry isn’t going to become a monolithic app run by robots. We still need humans to drive legacy organizations forward and deal with the complexity and fragmentation of bank technology today. As banks dig into new work for robots, it’s a great time to lean into the human side of tech talent development.
Steve Williams is a founder and chief executive officer of Cornerstone Advisors. Tune in to Steve’s Plugged In podcast and follow him on LinkedIn and X.