Britain already has a sizeable digital skills gap. As a technologically-advanced country, we have a lot of different cutting-edge technologies in both development and implementation. The problem is that we don’t have the labor capacity to maintain and operate these technologies and, as such, our innovation sector is at risk of stagnation. As our finance sector becomes increasingly technological, the demand for digital skills grows further still – so, how will Brexit affect this?
The last decade has seen Britain’s Fintech sector growing steadily from strength to strength, with London emerging as a real hub for Fintech development. The financial services market has become far more tech-focused as leading institutions have been challenged by startups offering consumers digital versions of their products which has, in turn, seen existing key players invest heavily in digitalization. Areas of banking that have been a focus for investment include the use of AI in customer profiling, money laundering detection, algorithmic trading and in improving customer services.
The skills gap persists for two main reasons. Firstly, the majority of the existing labor force does not have the skill set required to be able to work with such technologies. This is exacerbated by the fact that innovation is happening so quickly that it is difficult for the labor force to train and learn how to operate the latest iteration of any given technology. Secondly, there just isn’t enough interest from young people and students in getting into these fields. Often these roles require a specific specialism and it is difficult to find graduates with the right skill set and then attract them to a role in the financial services industry. With so many different sectors digitizing, the competition for these skilled candidates is high, with many often tempted by the most recognizable names like Google or Facebook.
Will Brexit make Britain’s skills gap worse? It’s definitely possible. Although many European countries have capital cities famous for their financial services hub, London is certainly one of the most prestigious. For many decades, and particularly since London has turned its focus to Fintech, Britain has been able to attract top digital talent to the UK to work for some of the world’s leading financial institutions. Depending on the outcome of Britain’s deal with the EU, it could become much more difficult for UK banks to attract European talent, because of changing restrictions on the movement of labor.
Of course, the other potential outcome of Brexit on London’s financial hub, which we have already seen in motion, is that many banks may move their headquarters to EU member states. Several leading banks have already confirmed that they will be moving before Brexit deadline day, with the most common moving destinations being Dublin and Frankfurt. The unfortunate potential outcome here is that all the best European candidates will be able to move freely among member states. This could put Britain at a competitive disadvantage, particularly compared to the prestige it enjoyed before the referendum that made it a magnet for top talent.
Conversely, Britain could therefore be required to place more value on its own domestic talent, which could in turn lead to an improvement in education and awareness about careers in technology and engineering. In the long run, this could be greatly beneficial not only to the financial sector, but to Britain’s labor force and, eventually, its economy.
Britain’s skills gap is a pressing issue, but what it suggests on a much wider scale is no bad thing: we are great at innovating, we just need more innovators. If our Brexit deal leaves us with limited access to the EU’s pool of labor resource, we must take it as a sign to look internally, to improve our own digitally-skilled workforce, and let that continue to drive our financial services industry forward.
