Fintech and your career
Technology at banks, insurance companies and other financial organisations is much more than a support function. It’s often at the cutting edge of change and innovation, making the fintech sector an exciting area for technologically-minded graduates with an interest in finance to begin their careers in.
What is fintech?
Fintech, or ‘fin tech’, is a blend of the words ‘financial technology’. Essentially
it refers to any technology in finance that replaces traditional ways of doing things.
You’re very likely to have encountered fintech as a customer – for example, if
you use mobile banking or contactless payments. However, fintech takes a wide range of other forms, including: artificial intelligence and machine
learning, such as chatbots that respond to customers’ queries more quickly
systems that process investment banking deals automatically, instead of
bankers writing them by hand on paper tickets
- algorithmic trading: using algorithms to make complex decisions much faster than a human could.
- cryptocurrencies, such as bitcoin, ethereum and many others.
- open banking: allowing non-finance organisations to access bank data for customer convenience (such as apps designed to help people keep track of their spending or messaging apps that enable people to transfer money to their friends.)
- online-only banks, loan providers or other financial services
- insurtech: tailoring insurance to individual customers (rather than grouping customers together based on the level of risk involved), so that policies can be priced more competitively.
What are fintech companies?
There’s no single definition of a fintech company. Broadly speaking, the term
tends to refer to either the backend of traditional financial organisations (such
as retail or investment banks, investment management firms and insurance
companies) or technology start-ups that seek to solve a finance-related problem.
One major financial firm, for example, describes itself as ‘a tech company that
does credit cards’. Sometimes these startups are referred to simply as ‘fintechs’.
To avoid being left behind, established finance companies compete with start-ups by adopting similar technologies and services, as well as looking for ways to be more innovative than them. Sometimes this requires a change in thinking or structure to revolve around innovation, rather than simply investing more money in technology.
Routes into fintech jobs
Fintech graduate jobs vary as widely as the organisations that recruit for them, but some of the main routes in are:
- an ad hoc vacancy with a small or medium-sized employer or fintech start-up
- a technology-specific graduate scheme with a finance organisation such as a bank or investment management firm (or a technology company that builds fintech software)
- a general or rotational graduate scheme at a financial organisation, before choosing to specialise in technology.
The skills, experience and qualifications you need for fintech jobs
Some employers require a technology-related degree (such as computer science, engineering, physics or maths), but this is not always essential. Your experiences outside of your degree are also valuable for showcasing your skills and motivation – for example, if you’ve learned programming languages in your spare time.
Don’t worry if you don’t have much finance knowledge, although it will help
demonstrate your enthusiasm for the role if you do. A willingness to learn and
ability to pick up new skills quickly is more important than your existing knowledge because you will be given training on this once you start the job. An analyst at a major international bank said: ‘You are always encouraged to learn new things. I had two months’ orientation before joining my first rotation, which included a mixture of very technical and financial/ economic topics.’
Make sure you also draw upon any unrelated work experience as evidence of
your transferable skills. Some of the most valuable skills for fintech jobs include:
Fintech news you should know about
The face of the fintech industry is constantly changing. One fintech trader
said ‘In the future I think there’ll be less manual trading (making phone calls or actively clicking to buy or sell a stock or option) and more emphasis on automation (for example, pre-loading a system with the prices and what trade it should buy or sell in different scenarios).
Electronic trading on screens was only introduced around 15 years ago, so things are still changing very rapidly in that area.’ While fast technological change is one exciting aspect of fintech, you should also be aware of and keep up to date with the wider implications of these changes, such as:
- the effect of automation on how finance organisations work (fewer staff needed, quicker transactions, ability to serve customers more efficiently)
- the effect of the ‘cashless society’, meaning that so many people rely on card or mobile payments that some businesses have stopped accepting cash and there are fewer ATMs available for people to obtain it. Similarly, the rise of mobile and internet banking has prompted retail banks to shut some of their physical branches. Do these changes make financial services more or less convenient for customers?
- IT glitches, how they affect customers and how banks respond to these incidents developments in how fintech is regulated, for example regulations on how cryptocurrencies are used or how quickly organisations need to fix IT problems
- the impact of cyber-attacks, data breaches and other security issues, and what is being done to prevent these.