Digitisation and advances in technology in financial services are reportedly giving rise to a skills mismatch in the domestic banking sector.
A new survey of more than 2 000 employers by BANKSETA, the state-backed Skills Education Training Authority in the banking sector, reveals consistent vacancies in the IT and customer expectations units among companies in the sector.
Vacancies that arose from 2012 – 2015
Source: BANKSETA 2015 Survey
“The banking sector has mentioned customer centricity as a major change-driver of the industry with a need for professionals who can understand clients holistically,” it said.
The vacancies that are hardest to fill – software developers, database designers and administrators, security specialists and systems analysts – all fall within IT, driven not only by the demand for these skills across all sectors of the economy but also by the lack of banking experience among potential candidates.
In addition to banking experience, it is becoming more and more important for IT staff to have sound knowledge of regulation and compliance in order to build appropriate systems, said Caroline King, acting CEO of BANKSETA.
Following IT, other hard to fill vacancies in the sector such as actuaries, credit managers, accountants and investment professionals, are due to a dearth of specialised quantitative, mathematical and investment skills.
“Investment banking is a scarce and critical skill due to the sophistication that is required. And perhaps, you’ll find that some of the people that are coming through on the demand side aren’t looking at that, maybe they are looking more at accounting,” said King.
She went on to say that BANKSETA also classifies scarce and critical skills by examining the rate at which banking organisations are able to employ candidates with the necessary skills and how long it takes to fill vacancies.
The institution flagged poor performance in high school mathematics as a cause for concern as this may exclude learners from pursuing careers in the sector. Citing data from the Department of Basic Education, it noted a decline in the matric level mathematics pass rate from 59.1% in 2013 to 53.5% in 2014, which it said may be linked to a decline in enrolments for the subject.
That most employees in the sector hold matric certificates, the “skill set is generic in nature” and there is a lack of qualified personnel for professional and managerial roles, said BANKSETA.
Education Levels of Banking Employees
Source: BANKSETA 2016 WSP
A lack of suitably skilled candidates has forced the sector to import 1.93% of its workforce, including chief information officers, ICT business development officers, project managers, developers and programmers.
“With the large number of new posts created, the dynamic nature of banking is not supported by a properly qualified and skilled pipeline. Resignations in the sector are also high, which gives an indication that the movement of skills amongst banking institutions is fuelled by higher-than-market wages for scarce skills, especially in the IT arena. This level of scarcity will start to grow as non-banking competition heats up for both marketshare and skilled personnel,” it said.
According to the BANKSETA, the scarce skills reflect the sector’s inability to meet transformation targets at management and executive levels as well as with the employment of people with levels of disabilities.
Technology is said to be the linchpin of banking operations with banks adopting “rigorous innovation practices” to maintain a competitive edge. As a result, future vacancies and skills requirements are likely to be skewed to IT even more.
Next Five-Year Skills
Source: BANKSETA 2015 Scarce Skills Survey
The domestic financial services sector – which includes insurance companies, development finance institutions and credit providers – employs more than 2.2 million individuals. It is the third largest employer in the country and contributes 14% to employment. BANKSETA data shows that banking currently employs 189 954 individuals, with the big four banks employing around 67% of the workforce.
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