Developments in the Fintech Sector and Talent Shortage

Following the normal trends of growth through venture capital in the fintech sector globally from 2015 to 2020, hyper growth due to digitization brought by the pandemic in 2021, followed immediately by competitive phases characterized by high inflation, high interest rates, and decreasing venture capital after 2022 was observed. In this competitive phase, it is expected that fintech companies will grow three times more than traditional banking after 2023. McKinsey's report "Fintechs: A new paradigm of growth 2023" predicts that the share of global fintech revenue will shift from developed countries to developing ones. Turkey, as a developing country, ranks among the top ten globally in terms of credit card ownership and transaction volume. With approximately 87 million active individual banking customers, 629 active fintech companies, and 74 licensed payment and electronic money institutions, Turkey holds a leading position in banking, technology usage, and digitization. While banks invest in fintech through established funds, they also support the ecosystem for the emergence of more fintech startups through acceleration programs. The Turkish fintech ecosystem is strengthened globally by various regulations such as the establishment of the Turkey Payment and Electronic Money Institutions Union, the Digital Turkish Lira Collaboration Platform, and the Istanbul Financial Center (IFC), as well as regulations under PSD2 for open banking, and the publication of regulations on Digital Banking and Banking as a Service. Although fintech initially started in the banking sector as backend support, it gradually began to replace the banking sector by shifting towards consumer-focused services such as mobile payments, cryptocurrency wallets, and banking applications. It is expanding in various fields such as education, individual banking, fundraising, nonprofit organizations, and investment management. With innovation-friendly regulations, the fintech ecosystem in Turkey is growing every year, but there is also an increasing shortage of workforce in the sector. Fintech companies generally have high-paced working environments due to the nature of the sector and mostly being startups, hence attracting and retaining talent is one of their priorities. It turns out to be challenging to attract talents from three perspectives: the right mindset, the right skills, and a competitive market. According to Deloitte's "Human Capital challenges of a fast-growing sector: Fintech Report", CEOs of small and medium-sized enterprises spend one-fifth of their weekly working hours on HR activities, which hinders the prioritization of strategic work. Likewise, as mentioned in the same report, the CEO of a rapidly growing fintech company reports spending 60% of their time on recruitment. Similarly, First Round's "State of Startups" report indicates that making the right hires is the number one concern for startup founders, surpassing both customer acquisition and revenue growth. As in any startup, working with a team that shares the same vision, mission, and moves towards the same goals is crucial. However, in the fintech sector , creating the right team with the right people is even more important due to the critical need to gain both government and customer trust. Already two Turkish companies are among the top 100 in the fintech sector, and as Turkey grows in the sector, companies need to focus on their strategies and entrust proper recruitment to professionals to avoid being eliminated in competition. Especially in the last two and a half years, our partnership with leading institutions in the fintech sector continues as NBS. According to our experience, fintech is an attractive sector for candidates, and we observe that candidates working in the banking and insurance sectors and interested in digital transformation adapt more easily to the sector. Due to the numerous twists and rapid technological advancements in the fintech sector, possessing 21st-century skills such as analytical thinking, result orientation, creativity, stress management, openness to innovation, and risk management is crucial. Accessing the right potential, which possesses the right talent and even more importantly the right skills, to make a difference in the sector is an undeniable reality for success in the sector. Partnering with companies that specialize in human resources who already have experience in the sector and getting support in areas such as recruitment and mentorship are essential for success in the sector. 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