Tackling The Data Skills Gap In The Financial Services Industry
“Data is the new oil”. This phrase, which has become something of a cliché, is widely attributed to the British mathematician and entrepreneur Clive Humby. First uttered in 2006, the elevated value organisations began to place on data some 15 years ago coincided with the technological evolution that saw traditional business intelligence and insight tools replaced with big data and advanced analytics.
Beyond any throwaway lines, the indisputable truth is that data is now critical to the way most organisations operate. How it is collected, stored, analysed, understood, and actioned is fundamental to the delivery of a vast array of products and services. The finance industry is no exception; in fact, it is perhaps more reliant on large quantities of data than many other sectors. But there is a problem – one that many financial services companies will be acutely aware of. Finding employees with the requisite skills and experience to work in specialist data roles, or at least handle data within their wider remit, is extremely difficult.
A government report from last year sought to uncover the extent of the problem across the UK. It spoke to 1,045 businesses, finding nearly half (48%) were trying to recruit for data roles, and a similar number (46%) were struggling to find candidates. The study estimates that there are currently around 250,000 jobs that require hard data skills.
Focusing on the finance world, the UK’s Financial Services Skills Commission recently found that 92% of its member firms had hard-to-fill vacancies in 2021. Moreover, data and analytics roles were the main priority for finance companies in terms of their hiring plans this year.
Data skills must be omnipresent
We should not be surprised to see data and analytics ranked as the priority skills gap that financial services firms want to address. After all, there are two converging trends at play here: on the one hand, the volume of data that businesses are either gathering themselves or able to access from third parties is exploding; on the other hand, data is now becoming interwoven into all business departments.
Unlike a web developer or software engineer, data skills are far more likely to be required among, say, someone working in marketing, customer insight, product development or risk analysis. In fact, almost every decision-making function within a company is reliant on crunching high volumes of data.
Data scientists, data analysts and data engineers are all in high demand. But so too is a customer experience manager who is able to improve the way complaints are handled by analysing the way previous incidents were managed, or a digital marketing executive able to monitor the key performance indicators of a new pay-per-click campaign.
Data cannot be siloed; finance companies are looking for data-savvy professionals to work across many functions. And that is what makes the data skills gap such a pertinent issue.
Addressing the gap
Indeed, the data skills gap forms part of a much wider issue: the digital skills gap. As the pace of technological change has accelerated, it is increasingly difficult for education systems to keep up. There is a huge lead time for schools and universities to update curriculum content; as a result, there is a gap between what students are being taught in traditional education systems and the skills that employers need.
However, while an understandable problem, it nevertheless must be addressed, and fast. As outlined above, failing to hire staff with the requisite skills to make sense of data will have numerous ramifications, from increased risk of data breaches to losing ground to competitor firms that are able to offer superior services, products, or advice to customers through data-driven insights.
Broadly speaking, there are two options when looking to plug the gap: upskilling and reskilling existing staff to provide them with better data skills; or hiring external talent. Crucially, both options require talent pathways – means of training current or prospective employees to ensure they have the highly sought-after skills.
Specialist data courses do exist. Unfortunately, though, these can be prohibitively expensive for either the individual or the employer looking to enrol one of their employees and do nothing to widen access to these lucrative careers. More equitable solutions are needed.
Digital skills bootcamps are a great example of one initiative that is making real progress in this area. For example, with a £7 million grant, West Midlands Combined Authority (WMCA) has piloted over 30 digital bootcamps and trained around 2,000 adults with essential tech skills. Now, £21 million has been made available from the Adult Education Budget to fund the new bootcamps over the next three years, with a target of supporting more than 4,000 people.
Free for the participants and providing clear pathways for companies to either upskill or hire new talent, the bootcamps are led by experienced industry specialists and play a vital role in equipping the workforce – particularly young people – with the hands-on data training
Generation is proud to be one of the specialist skills trainers working with the WMCA to deliver the bootcamps, which include pioneering Data Engineering and Data Analytics programmes that have been purpose designed over the past two years, orientated around industry needs. After the Data Engineering programme was successfully launched in the West Midlands in 2020, it has now expanded and is running in multiple locations across the UK.
Diversity is key
Another benefit of these programmes, and the funding provision being made available by the government, is a pathway to diversify the talent pool. The shortage of people with data skills is unlikely to be addressed without a concerted, collective effort to ensure as many people as possible – regardless of ethnicity, gender or affluence – are able to access the necessary training and employment opportunities.
As noted, many courses are prohibitively expensive, while a lack of action to help the unemployed and underemployed means there are millions of potential future data professionals going overlooked.
Given the fierce competition for talent and demand for data-centric roles within the workforce, now is the time for employers and training providers to collaborate on creating new pathways for people to develop and then exercise data skills. Only by diversifying the talent pool and creating more industry-led, employment-focused solutions will the skills gap be closed; there is not a moment to be wasted.
About the author: Michael Houlihan is the CEO of Generation UK, a non-profit that transforms education to employment systems to prepare, place, and support people into life-changing careers that would otherwise be inaccessible. Michael joined Generation in July 2018 to lead the launch and growth of programmes in the UK & Ireland.
Prior to Generation, he was COO and Director of the Board at two award-winning, VC-backed technology start-ups, helping both Reevoo and Quill develop their proposition and scale. Prior to that, Michael worked as a Strategy Consultant with OC&C. Michael holds a BA in Economics & Mathematics from Edinburgh University, and an MA in Economics from New York University.