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Mind the Gap!

To be truly innovative, fintechs will require an entirely new set of skills.
Published 17 Oct, 2022 11:13am

Fintech is one of the most rapidly growing sectors with the highest demand in the world. Fintech fuses financial services with digital technology to provide consumers and corporations with creative financing alternatives. The creation and installation of the BAAS (Banking As A Service) Model – which enables firms to accept and deliver a full variety of financial services to their customers – ushered in this trend, which ranges from payments and insurance to loans and investments.

Covid-19 has altered Pakistan’s talent environment in several ways. Lockdowns brought on by the pandemic shifted a majority of activities online, including work, payments, education and enterprises and hastened Pakistan’s transition to a digital economy.

According to estimates, more than 40 noteworthy fintech companies are functioning in Pakistan, the majority of which are in the payments sector. Eight of the UN’s 17 Sustainable Development Goals (SDGs) include financial inclusion as an objective, as it is seen as a major facilitator of economic development. A growing body of research indicates that small- and medium-sized businesses (SMEs) and individuals may contribute to financial stability, economic development, job creation, and fiscal and monetary policy efficacy.

However, recent initiatives taken by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP), including the launch of the Raast programme, have created a sizable market opportunity for fintechs to take advantage of, given that according to the World Bank only 21% of the population is financially included and that consumer preferences are shifting toward digital technologies and smartphone adoption. This will make it possible for foreign venture capitalists (VCs) to spend more money and for global fintechs to start operating in Pakistan. Institutional funders will also continue to be crucial to the ecosystem’s success, with particular emphasis on empowering women economically through financial inclusion and financial sophistication.

Fintechs may significantly contribute to the disruption of the financial services ecosystem by realising this change and potential in the market and taking advantage of Pakistan’s sizable and underserved female population. Serving neglected and unserved communities, improving client experiences and creating cutting-edge solutions may all help make financial services more accessible. As a result, the most significant gainers from technology-driven financial services are both consumers and SMEs. There are more than 160 million biometrically authenticated mobile connections in Pakistan, with over 58 million people having mobile wallet accounts. Moreover, mobile money transactions climbed by 34.3% in 2019 and 2020, and mobile banking transactions by 50%.

In Pakistan, fintech has a potential market size of over $36 billion. However, skills need to be adaptable, constantly changing, and dependent on innovations and evolving practices for the labour supply to fulfil the needs of fintech. Although the need for digital abilities is at an all-time high as a result of the significant shift toward the online environment, the lack of people with digital skills might impede the expansion of several tech-intensive companies, including fintechs. There is a glaring skills gap, with shortages frequently noted in programming, machine learning, AI, big data, deep learning, cybersecurity and soft skills.

Here are some of the most sought-after expertise for fintech:

1. Software Professionals. Software developers may anticipate being engaged in a range of diverse fintech initiatives, from developing a platform for a new digital bank to creating an online marketplace for a disruptive insurance tech company. The user experience (UX), which offers a more customer-friendly approach than their more established competitors, is frequently the disruptive force driving fintech start-ups. In this innovation-driven sector, there is a constant need for experts who can create mobile applications, full-stack platforms and user-responsive websites. Developers that appreciate design, as well as architecture and development, stand out as good candidates.

2. Blockchain Specialists. The explosive growth of the cryptocurrency business is directly related to the expanding need for blockchain specialists. Over the last 10 years, the exponential rise in the value of digital currencies, such as Bitcoin, has had an impact on the traditional banking sector. Blockchain is the underlying technology that makes it possible to lend, move, trade and reconcile money internationally using a single, shared consensus and ‘ledger’-based system of transactions.

3. Data Specialists. Financial services are being disrupted and redefined by technology, which also creates a ton of valuable data that has to be mined, analysed and understood. Understanding technologies like deep learning, big data, AI and machine learning is crucial; the importance of customer data analysis in helping fintech firms maintain their competitiveness, in the long run, cannot be emphasised enough.

4. Cybersecurity Experts. Given that fintech companies work with a lot of data, particularly sensitive and personal information about clients and transactions, cybersecurity experts are one of the most in-demand job categories in the sector. Professionals with specialised knowledge in cybersecurity are increasingly needed. Analytical abilities, governance, risk management and compliance (GRC), digital communication technology, and encryption techniques are among the talents that are required. Candidates must have training in data administration and management, virtualisation, platform/technology-specific abilities and security operations management. For long-term success, fintech personnel must also amass a strong portfolio of soft skills. The financial technology industry is expected to hire the highest number of CFOs and CEOs. However, these individuals will need to have a thorough understanding of information technology at all levels, as well as the critical soft skills needed to manage teams and different personalities, and be excellent decision-makers. These include the following:

• Social Skills: Due to the fast-paced nature of fintech, technical experts who also have strong emotional intelligence are more likely to succeed than those who simply have technical expertise. The capacity to cooperate with others and work in teams, develop connections, communicate ideas, and handle conflict are additional crucial people skills for this sector.

• Innovation and Problem-Solving Capabilities: Numerous legal, technological and unforeseen issues confront the fintech sector. Professionals in the sector must possess analytical and critical thinking abilities that will enable them to come up with original solutions to such issues.

• Adaptability and Flexibility: To properly handle the industry’s rapid development, fintech personnel must be adaptable. Agility and flexibility are key skills paramount to survival in this digital era.

• Financial Understanding: Basic financial literacy is an added advantage for grasping financial resources and concepts. This will help in understanding the nature and type of data relevant to the industry in addition to providing greater awareness of the system as a whole.

Despite issues with the adult population’s lack of financial literacy and excessive market regulation, concerted efforts from all parties are expected to foster an atmosphere that is favourable for fintech to flourish in Pakistan.

Fauzia Kerai Khan is CE, I&B Consulting, Assessing, Learning, Consulting.