The Fintech Job Market for 2022: In Conversation With Dr. Chris Brummer and David Richardson
January 25, 2022 (Investorideas.com Newswire) 2022 is showing signs of a historic year for Fintech and the job market associated with it. The economy is booming but in directions that the Federal Reserve had not anticipated. On one hand, there is unprecedented inflation and on the other, historically low unemployment. The latest episode of the Fintech Beat Podcast joins host Dr. Chris Brummer with executive recruiter David Richardson to discuss where the Fintech jobs market is headed.
Dr. Chris Brummer has long been a recurring voice in academic and policymaking circles. He is no stranger to existing financial structures and systems, but his real talent lies in the financial world of tomorrow, which is the coming together of technology, finance, and regulation. A professor and faculty director of Georgetown's Institute of International Economic Law, Dr. Brummer has taught at several prestigious universities and finished a term as a member of the European Securities Markets Authority's innovation council, and the National Adjudicatory Council of FINRA, an organization with powers invested by Congress, tasked to regulate the securities industry. He lives in Washington, D.C. with his wife noted securities lawyer Rachel Loko.
This was the second time in a year that David Richardson has graced Fintech Beat with his insider knowledge and predictions. For him, 2021 has been an unprecedented year for Fintech. One of the largest drivers behind the growth of Fintech-led companies has been the interest shown by venture investment funds. The sector attracted an enormous $131 Billion in investment last year and shows no signs of slowing down. The top 3 fund investments went to companies that were involved in retail banking, online payments, and cryptocurrency.
For David Richardson, the part of the industry that has seen the highest growth is e-commerce, payments, digital wallets, and digital assets like crypto. The amount of venture capital flowing to those areas is high, which means that it will be able to sustain demand for jobs for quite some time.
When considering the trends in talent recruitment, one of the most important ones was remote work. The ongoing trend for remote work has had a significant impact on client demand within the US and globally. Historically, most tech companies relied on executive teams working from a physical office. Those companies have now become fully remote. This means that clients have more flexibility over where and who they hire. Although this is an important advantage, it can lead to complications while building the culture of a company. Many companies tend to have large events to help create a unified culture within a highly dispersed workforce.
Fintech firms have done great with reinvesting their growth in hiring executive talent. On the tech-enabled lending side, whether its consumer or small business, those credit portfolios have done well in the current environment.
"I personally believe that as the macro environment changes going into 2022, some of those credit portfolios are going to face headwinds or challenges, where they will need a different set of skill sets. One thing seen in the past is that tech-enabled lenders start appointing high-grade capital markets professionals to help them think about offloading loans on their balance sheet, securitization, partnering with financial institutions. That could be something that is an indication of seeing forward-thinking companies trying to stay ahead of changing credit conditions," said Richardson.
One of the more interesting questions that came in from Dr. Brummer, concerned the correlation between asset pricing, particularly financial assets tied to technology, and the pricing of technology talent.
In a higher inflationary environment, the first thing to get hit if you're an investor is technology-related stocks. A large proportion of compensation for executives and board members is tied to a financial asset. The sentiment of the market drives a lot of these offers. A recessionary environment promotes many companies to make higher cash offers and pay cash salary bonuses. The equity, whether public or private, can also have a discount factor applied to it.
However, in the current conditions, it is common to witness people negotiating for equity or options in high growth, late-stage Fintech companies, that are heading towards an IPO window in the next few years. If the macroeconomic environment changes, it will have an impact on the offers available to professionals in the industry.
One question we were all waiting to be answered was regarding the jobs that are most in-demand in the Fintech ecosystem. According to Richardson, technology and engineering talent at the executive level has been in incredibly high demand and will remain so. However, the most sought out people have experience in scaling teams successfully. A common scenario is where a client will be looking to build a new team, business, or product. They will seek out individuals who have had prior experience in taking a team of one company and increasing its revenue to a multiple of x, while having done that in a modern, thoughtful environment.
Apart from this particular skill set, CFOs with experience taking companies public at scale are also in high demand. Another in-demand role is that of Chief People Officer. In a work environment increasingly inclined towards remote work, there has been an increased focus on ensuring how to keep everyone engaged and how to build a strong talent acquisition team that is global.
Richardson also remarked how from Q3 onwards there has been an increase in demand for government affairs, regulatory, legal, and compliance executives from the Fintech Community. That uptake will sustain going into 2022, as regulatory actions begin to increase. We are starting to see the smartest and the largest players in the space staff up aggressively in those functions, which means that they are anticipating some kind of market change.
One of the most interesting insights in the entire conversation was regarding the trend of people leaving their jobs and the resulting issue of succession. According to Richardson, there is a real risk if people in established financial institutions, who are aiming to have leadership positions in the next few years, leave for Fintech positions and do not return. The next generation of CEOs will be at risk at such institutions.
This is coupled with the risk of people retiring earlier than usual, in their 30's and 40's, due to the fast-tracked monetization of value in some of these assets.
According to Dr. Brummer, who himself recently joined the board of K2 Integrity, "Ultimately the job market for Fintech isn't just a minute-by-minute statistic. Instead, companies think long and hard before hiring and decisions to bring onboard executives are just as impacted by practical considerations of a company's possible future headwinds as they are logistics."
To be a part of more interesting conversations like this you can join in on 'Fintech Beat Podcast' - where Dr. Chris Brummer brings together brilliant minds every Tuesday to tackle the challenges erupting at the intersection of finance, tech, and policy.
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