Amid a nationwide labor shortage, exacerbated by the pandemic and the “great resignation wave,” banks have had difficulty attracting technology talent over the past few years, said Poorani Jeyasekar, director at advisory and investment firm Klaros Group.

But with the recent wave of fintech layoffs, traditional financial institutions have a prime opportunity to scoop up new job seekers with tech and finance talent, Jeyasekar said. 

High interest rates, rising inflation and a drop in stock market valuations, have resulted in a slowdown in venture capital flowing into the fintech sector, contributing to a round of layoffs over the past several months.   

Digital mortgage lender Better.com has cut 5,000 jobs since December, according to Fast Company. The company drew widespread criticism after its first round of layoffs, conducted over Zoom, went viral in December. 

Amount, a Chicago-based banking technology provider that helps banks facilitate buy-now-pay-later financing, has cut 18% of its workforce, a spokesperson for the company said last month. 

Amount CEO Adam Hughes said the decision to pare its workforce was made in response to the current macroeconomic environment.

“[W]e have decided to take some proactive adjustments to ensure Amount’s ability to thrive for years to come,” Hughes said in a statement on the layoffs.

Other fintechs and payments companies that have downsized their workforces in recent weeks include PayPal, Klarna, Bolt and Coinbase.

Amid the layoffs, banks should consider hiring technologists specifically focused on artificial intelligence, machine learning and data science, Jeyasekar said.

“[Financial institutions] are sitting on a lot of data that exists within siloed business units today,” she said, adding bank CIOs may have “a great vision” but not necessarily the right talent to execute that vision.

“Fintechs have used AI and machine learning to develop data models for credit underwriting, running efficient operations, and predicting customer behavior to name a few. CIOs can use this as an opportunity to hire AI/ML talent to execute their vision,” she added.

As more fintech talent becomes available, banks should also consider the customer expertise employees with fintech experience can bring to a bank, Jeyasekar said.

“Traditional [financial institutions] have been behind in personalizing financial services and products,” she said. “Fintechs have done a fantastic job in understanding customer pain points and personalization. The reason behind fintech's success is having strong product managers that pay attention to customer pain points, behavior, and work with the technology team to deliver personalized solutions.” 

Traditional banks can use this opportunity to hire product managers who understand the millennial and Gen Z customer, and who know how to personalize products for that demographic, she said.

When eyeing fintech talent, banks should also consider bringing these workers into their innovation teams to help the institution identify better ways of working, Jeyasekar said.

“Most traditional financial institutions have created separate innovation teams to come up with new products and services that compete in the market with fintechs,” she said. “The purpose of separating the innovation team is to segregate the old ways of working from the new ways and give freedom to the teams to experiment and learn, and to create an innovative culture. Fintech talent are used to working in an innovative culture and collaborative teams where new ways of working are rewarded.”

But not every job seeker with a fintech background would be a good fit for a bank, said Oliver Rolfe, founder and managing director of Spartan International, an executive search and consultancy business based in London.

“If a person that has been let go has never worked in the banking industry and is experienced, the chances of them crossing over is more limited,” said Rolfe, whose firm focuses on global equities and investment banking executive search, as well as fintech. “Whereas an experienced person who had previously worked within banking, and has not been out for too long, would have a greater chance of making the transition. On the junior front, there are more options for change and transitioning from one to another.”