The Taiwan Banker

In Shakespeare's play Henry IV, the purposefully obscure Glendower engages in wild talk with his ally Hotspur, declaring that he can summon gods. The combative Hostpur responds calmly: this is nothing. Many can do that. The question is when you really need the gods, will they come?In recent years, the emergence of next-generation AI and Internet of Things technologies has sounded the clarion call for Industry 4.0, and the song of corporate digital transformation has been sung loud and clear. In a short period of time, the pandemic suddenly spread, and demand for remote and contactless services greatly increased. The need to create new business models based on digital technology has become urgent. A real test is at hand. The success or failure of digital transformationSuccessful digital transformation is not just the digitalization of new technologies, but must start with customer value and customer experience. Banks must use appropriate digital technologies to transform and upgrade information systems and human resources, while also comprehensively transforming their organizational structure and business models.Particular attention must be paid to the role of human resources. As stated in an article in Harvard Business Review last year, the focus of digital transformation is often not on technology, but on people. "Almost any technology can be bought, but the ability to adapt to a more digital future depends on the ability to cultivate the skills of the next generation, reduce the gap between talent supply and demand, and ensure that you do not become obsolete.” For the financial industry, fintech is a way to achieve transformation; talent cultivation, and construction of fintech capabilities, are naturally keys to its success or failure.The FinTech Development Road Map published by the FSC in 2020 also listed capacity building – various ways to train and keep fintech talent for the financial industry – as one of its eight strategies. In addition to a fintech competency certification mechanism, it has also designed fintech learning maps for regulators and promoted industry-university cooperation.How can we create the fintech skills to fulfill financial industry demand? New recruiting is of course a good shortcut. Taiwan has always had no shortage of high-quality technological talent. The problem lies in whether such people are willing to invest in skills for the financial industry. The Commercial Times published a report entitled, More Work than People! Fintech Talent is Scarce. The title alone explains the difficulty of recruiting technology talent for the financial industry.Salaries lag the tech industryThe reasons are not difficult to understand. The first is salary level. The financial industry does not pay as well as the technology industry. According to Benefits and Salaries for Non-Supervisors, a report published by the Taiwan Stock Exchange, the average annual salary of employees in listed semiconductor corporations in 2020 was NT$ 1.66 million, and NT$ 1.329 million in the computer and peripheral equipment industry, while the financial and insurance industries reached only NT$1.188 million. These are just averages. It is conceivable that the gap may be even more pronounced for smaller private financial institutions or public banks with less flexible salaries. This difference in remuneration weakens the incentive for undergraduate or graduate computer science majors to abandon the tech industry for finance. Lack of experience in assessmentIn addition, the financial industry has trouble evaluating and utilizing technological experts. Although it warmed up to digitalization earlier than most other industries, its past use of IT experts has mainly been to support system maintenance – external vendors are typically used when new business lines are launched. Therefore, human resources departments understand the necessity of recruiting technological talent, but are inexperienced in assessing their abilities, tend to be conservative on salaries, and have difficulty offering clear guidance. Career planning within financial institutions has caused technological recruits to feel uncertain about their prospects in the industry.TABF will work with the Taiwan Insurance Institute and Securities & Futures Institute to jointly assist in building the planned fintech competency certification mechanism. Grading is done by verifying basic and specialized abilities. The system uses professional abilities for classification, and students must learn the specialization subjects as required. The initial plan will be implemented in a unified way, i.e. each professional area has a complete training course provided by a dedicated organization. The course planning focuses on both theory and practice, using specific cases, and the final assessment appraisal is closely related to the content of the course.Reducing the distance between theory and practiceAccording to the current initial plan, the banking industry is divided into six major specialties: business analysis, digital product design, data analysis, user interface/user experience (UI/UX), compliance technology, and digital marketing. Each specialty includes 1-3 subjects (see Figure 1). Training and verification for each major includes practical work, which helps shorten the gap between theory and practice.Of course, fintech is not limited to just those specialties. The aim is simply to give priority to the areas strongly demanded by financial institutions, where technology or talent is lagging.This certification mechanism may not help with the key problem that the financial industry's salary structure and corporate culture fail to attract technological experts, but it will help expand the scope of talent development. We have all heard the predictions of labor market disruption and competition between humans and machines. For example, the Future of Jobs Report released by the World Economic Forum last year noted that the pandemic is accelerating the “robot revolution.” By 2025, it estimated that about 85 million existing human jobs will disappear, but 97 million new ones will also be created. According to the survey, by 2025, the portion of repetitive daily tasks in overall work will drop from 15.4% to 9%, and the portion of emerging jobs such as data analysts, data scientists, and AI and machine learning experts will rise from 7.8% to 13.5%. Clearly, concurrent with organizations’ digital transformation, employees will also need to transform themselves. Current financial practitioners without a technological background are not concerned with the salary gap with the technology industry, or the difficulty in adapting to corporate culture of the industry. Their lack of technical competence can be supplemented by professional training courses with a reliable fintech competency certification mechanism.The conditions for transformationThis specialization-based design allows financial institutions to easily recruit based on their needs, but this is not a final decision. Those who have passed the certification of a certain grade have the professional ability to do the related work, which allows for selection and judgment by the human resources unit and employer. After entering their new employers, those with expertise in technology can more clearly grasp the options and conditions for future change within their specialty, helping them to establish longer-term work plans and visions, and to develop long-term and stable careers within the institution. Therefore, this structure is beneficial to both the supply and demand sides of the labor market.In sum, the planned Fintech Competency Certification Mechanism uses a certification model of specialization and verification, aiming to provide entry standards for financial institutions to hire technological experts, and providing reference for current financial practitioners to develop a second specialty in fintech. The long-term goal is to build a fintech talent pool to train a large number of high-quality fintech experts for the financial industry. We hope that this mechanism can create a more conducive environment for the financial industry to attract technological talent for their digital transformation. The author of this article is Deputy Director of the Financial Research Institute, TABF