Global Fintech Fest 2024: India's fintech boom marred by talent shortage

Several fintech startups have highlighted the challenges in hiring employable talent in the competitive market.

As the Global Fintech Fest (GFF) 2024 nears end on August 30, industry experts say that although talent is readily available in India, the rapid pace of fintech industry development will soon outstrip the availability of experts.

Prime Minister Narendra Modi on August 30 said that the fintech industry has received an investment of more than $31 billion in the last 10 years and the startups in this space have recorded a growth of over 500 percent.

"The fintech industry has received over $31 billion investment in the last 10 years and startups have recorded 500 percent growth... cheap data, mobile phones, and zero balance Jan Dhan bank accounts have done wonders in the country," PM Modi said at the last day of Global Fintech Fest in Mumbai.

Speaking at the forum earlier, G Padmanabhan, a former executive director at the Reserve Bank of India said that with the required talent pool, innovation capacity and robust regulations, India’s fintech space is the best in the world for investments.

However, several fintech startups have highlighted the challenges in hiring employable talent in the competitive market.

A look at numbers

Specialist staffing company Xpheno analysed the top 130 fintech companies for Moneycontrol and found that their headcount has grown 11 percent over the last 12 months, growing from 1.20 lakh to 1.34 lakh in August 2023.

However, this cohort of companies also tackled a 26 percent attrition, with nearly 1 in 4 employees having at least one job switch during the year

“Gross hiring activity, as a sum of attrition refills and expansion hiring, was a little over 45,000. Given the larger market context of leading sectors going slow on headcount additions and some registering degrowth, the net growth in fintech is significant,” Divya Kurup, Business Head of Staffing at Xpheno told Moneycontrol.

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In its latest report on hiring intent, staffing major TeamLease Services found Fintech industry exhibiting the lowest growth among the BFSI cluster, with forecasted net employment growth of less than 5 percent.

Challenges

Despite the industry's growth and potential, many fintech startups struggle to attract and retain top professionals due to a shortage of candidates with specialised skills in areas like blockchain, artificial intelligence (AI), and cybersecurity.

Additionally, the high turnover rates and the need for continuous upskilling exacerbate the issue, making it difficult for these startups to build and maintain effective teams. As a result, many fintech companies are investing heavily in talent development programs and offering attractive incentives to stay ahead in the talent war.

“Big tech offers lucrative compensation packages and extensive resources which has become a limiting factor off-late…Retention of talent is another challenge that necessitates ongoing investment in aspects such as training, personality development and leadership development,” said Dr Pruthvinath Kancherla, co-founder of Affordplan.

Since the nature of fintech is interdisciplinary, Kancherla added that allowing someone to combine existing financial expertise with customer-based design thinking is becoming even rarer in the talent marketplace.

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According to Xpehno’s Kurup, the churn is high in the entry level, support, sales and customer facing functions. Talent in the technical layers, functional specialist layers, product management and senior management layers are considerably low, as talent is staying put, she added.

Earlier, PayWorld, a fintech firm, said it has observed employees shifting jobs at regular intervals throughout the year for various reasons, including for greater remuneration.

"We have noticed that the job offer-to-joining ratio varies depending on several factors such as job position, market conditions, and industry trends," Amit Tyagi, CEO of PayWorld had said, adding that the human resources (HR) experts are actively reviewing compensation and benefits packages to ensure they remain competitive.

Finding solutions

In response to the rising competition and scarce talent, many fintech startups are implementing their own training programs, partnering with educational institutions to create tailored curriculums, and investing in mentorship initiatives to cultivate a pipeline of skilled professionals.

For instance, Affordplan identifies candidates that best match its ever-changing needs through the use of data-driven recruitment tools such as applicant tracking system (ATS) scanners and personality assessment tools.

Besides, there are programmes to promote from within allowing the most junior ranks to come up and take on managerial positions.

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Meanwhile, Recur Club introduced pre-interview webinars where its Chief Technology Officer (CTO) would help acquaint tech candidates with the company's vision, mission, culture, and interview process. This initiative yielded results last year when the company hired five candidates in four weeks without encountering offer dropouts or counteroffers.