A job in the banking industry used to be considered a “golden ticket.” Do young people still think this is the case? According to research from TABF’s Proficiency Testing Institute, both the frequency and scale of recruitment have gradually increased over the past three years. Historically, recruitment classes only reached three to five hundred individuals once a year, but this has since increased in frequency to two, three, and even four times a year. While scale and frequency have increased, recruitment itself is not easy and turnover rates are high, both of which fail to reflect the traditional image of finance as a stable vocation.

In fact, from the beginning, financial institutions have engaged in fierce competition with large tech companies and start-ups over the best tech talent.

First, pay in the financial sector tends to struggle in competition with tech companies. Even though the pay associated with financial services is usually better than in most industries, it is still difficult to fulfill the pay requirements of the top tech talent when compared to tech companies. Moreover, the financial sector cannot match the benefits offered by start-ups with prospects for rapid growth, especially stock options.

Salaries in finance

Salary indicators are gradually increasing. According to statistics from the job site 104, the median annual salary of a university graduate in management or finance is approximately NT $360,000-500,000; master’s degree-holders earn a bit more at NT $420,000-790,000. However, executive trainees’ first year salaries stand firm in some banks at NT $1,000,000, with some foreign executive trainees making NT $2,500,000 or more. This is in large part because bank provide high salaries in order to compete with tech for talent.

Some bank HR managers say that the challenge they face is in providing benefits similar to those of tech giants when attracting digital talent. One high-level executive added that, “over the past two or three years, all of the interesting and advanced technology seems to have originated from large tech companies, and salaries in these companies are much higher than in the finance industry.”

However, salaries are not the only key factor when attracting Gen Z talent.

A gap in digital talent

Banks require all kinds of talent, but digital talent is most in demand in the wake of this year’s digital transformation. One high-level bank manager who wished to remain anonymous mentioned that “young digital talent want to work with the cutting-edge technology of the future, yet many financial institutions still use mainframe computers, which will cause them to keep leaving for fields that use newer tech.”

Another high-level manager said that “some newly-recruited digital talent resigned after training, saying that our old systems make it impossible for them to implement their ideas.”

Financial institutions need to continuously invest large amounts in technology to bring about digital transformation. However, they also need the appropriate talent to open new doors. To do so, they must first compete with other financial institutions and competitors from different industries for limited talent with in-demand skills, familiar with fields such as cloud native applications, intelligent automation, data analysis, and AI.

But can these phenoms actually perform? The answer depends on whether organizational culture and reputation align with the favorite trends of Gen Z. We know that financial institutions have always been cautious and risk-averse. In order to guarantee stability and regulatory compliance, banks have mostly eschewed the models of rapid development and breaking with tradition pursued by tech companies and engineers. Young employees with clear career goals consider financial service companies.

One young financial employee mentioned that after they started work in a digital finance department, any problem associated with digital transformation was thrown onto them, and the business department was unwilling to adjust. Even if leaders say they want digital transformation, the problem lies not with management, but with the whole system, whose influence overshadows that of any individual. Cultural transformation is essential.

Space to experiment

However, some banks are willing to adjust their culture. E.SUN Bank emphasizes its regard for Gen Z digital natives, which is the source of more than a fifth of its employees. Its TMA is the original tech executive training program of Taiwanese finance, giving young people space to experiment and a culture tolerant of mistakes.

Some differences do appear to exist between Gen Z and their predecessors when it comes to career development goals. The financial sector consists of large banks and insurance companies, with clear hierarchies; employee career development paths are relatively structured. However, many financial institutions are aware that this is not the best talent cultivation method for Gen Z employees. Some HR managers said that according to young employees, “the vertical career path companies want does not give them a sense of achievement. Young people like horizontal movement and trying new things, not defined boundaries.”

A long-term Willis Towers Watson (WTW) survey on organizational talent strategies found that Gen Z graduates who entered the workforce since the pandemic were the first generation in history to experience remote onboarding. Moreover, when looking for a supervisor, they search for someone who is capable of “listening to employees’ voices, providing timely motivation, and helping individuals to overcome challenges.” But, the most crucial factor in attracting Gen Z talent is not just money, but career development opportunities. Additionally, they also care about whether a company provides a flexible work schedule and is concerned for employees’ mental and physical well-being, and whether the role will allow them to find their mission in life.

Missions, varied environments, and flexible work schedules

Taipei Fubon Bank believes that the younger generation has a deep respect for work-life balance. As a result, when recruiting young people, Fubon emphasizes varied work environments, flexible schedules, generous benefits, and professional training. A varied work environment allows young people to work in different units and fields in order to discover their specialty, while also providing them with different experiences and knowledge. At the same time, Fubon provides flexible work schedules and formats.

Work roles may stimulate a sense of mission. Some banks have even begun to offer courses directly on university campuses, including how responsible investments and financial products adhere to ESG categories. Instruction on international ESG trends and the current state of the market, as well as case studies on practical operations, help these banks plant the seeds of sustainability in the hearts and minds of young people, helping them to discover their sense of mission earlier. A financial sector hoping to become more sustainable must start from the bottom.

KGI Bank has designed the a pre-MA intern mentorship training program. Mentors draw up personalized training plans and guide them to participate in departmental projects. The program also hosts a cross-border exchange competition for intern teams, featuring students from each field, stimulating diverse perspectives and creativity. This not only helps KGI understand the expectations of younger generations, but also to build a brand-linked strategy breaking free from the mold.

Keeping with the times

The financial sector has started to explore using different methods in response to the challenges of recruiting, training, and retaining Gen Z talent. However, this is not just a project for HR departments, but the entire organization. Explaining the future vision of financial services to younger employees, offering more flexible work times, and helping employees to find their sense of mission have been proven successful.

However, do enormous financial institutions truly have a way to adjust quickly? President Lee Chang-Ken of Cathay Holdings said that Cathay previously had over ten levels between its President and a typical office worker, but “over the past few years, our operations have pivoted towards flattening and transparent communication.” Lee also said, “We had to make some adjustments to attract colleagues from different generations. If we still maintained the previous management style, we would be unable to attract talent.”

The younger generation does not like overly complicated workflows, so Cathay Holdings has also revised its approval process to clarify its authorization hierarchy. Whereas it used to view mistakes or imperfections as unacceptable, it now maintains an internal culture that is tolerant of mistakes where everyone kindly supports their colleagues. “Giving Gen Z a good opportunity to develop relies on many factors, including the system in place, the culture, the organization, its subsidiaries, and departmental rotations. But organizations also need to allow younger employees the opportunity to rapidly study many skills, integrating international, inter-industry, and interdisciplinary abilities. Otherwise, the next generation could be competing with AI!”

It seems that the finance industry still has a lot of exploring to do when it comes to talent retention!