One in two Nigerian financial technology (FinTech) companies currently employs at least one international talent.
While attraction and retention of talent is a top tier challenge for Nigerian Fintech organisations, skills such as data analytics, cybersecurity and software engineering are among the most difficult to find, one of the barriers to the growth of Fintechs.
Results of the 2020 survey by FinTech Association of Nigeria (FintechNGR) recently released shows that 54 percent of Fintech companies said their businesses were facing an acute shortage of digital skills. “An area where many believe more support is required,” the report said.
“Nigerian FinTechs thrive on recruiting onshore talent within the domestic market,” Dapo Adewole, partner, Technology & FinTech Leader West Africa, EY said in the report that was jointly published by EY.
The gap in gender participation in the industry is another talent-related challenge, the Nigeria Fintech Census 2020- Profiling and Defining the Fintech Sector report shows that female workforce participation in the sector stood at 44 percent while 56 percent was reported for male. While 55 percent of Fintechs have all-male founders only 12 percent of the female are founders.
“The quality and volume of FinTech talent in Nigeria is limited and insufficient. Attracting and retaining talent remains the biggest challenge faced by FinTechs in Nigeria,” Ade Bajomo, president, FinTech Association of Nigeria said.
Commissioned to better understand the needs of the sector and to catalyze the next steps in the evolution of Nigeria’s FinTech landscape, the report defined Fintechs as organisations combining innovative business models and technology to enable, enhance, and disrupt financial services EY Definition of FinTech.
While the leaders that were interviewed during the survey suggest that the skill areas which are the toughest to acquire are mostly technology capabilities, the report revealed that skills such as business management, marketing and communication are becoming more essential.
“This gap may continue to widen, as more talents emigrate or work in other markets,” the report projected.
However, 77 percent of the industry leaders said they were actively looking at ways to mitigate the skill dearth within their organisations, through partnerships with other SMEs, suppliers/contractors, constant re-training to upskill the current workforce, and collaboration with academia to develop modern and relevant digital course content including off-taking standout candidates from this process.
Breakdown of the report shows advanced digital skills are essential for success as agreed by most of the industry leaders that were engaged in the survey. 77 percent of the Fintech leaders pointed to data analytics as “critical” to strategy and operations, compared to other digital skills.
Insights from the Fintechs interviewed also highlight CFO’s and Administrative talent as “very important” but scarce skills necessary for the overall success of FinTechs.
Despite the rise in digital skills acquisition across the globe, the report said that most of the Fintech players in Nigeria use in-country talent to execute their strategy, albeit with some support from international resources.
The gender imbalance in the STEM space (32% female and 68% male) in Nigeria is, according to the report, connected more broadly to diversity challenges within Fintech.
Only 35 percent of Fintechs report having at least one female founder, the survey result showed. Female representation in Fintech continues to be out of kilter with the wider population, particularly at senior levels, the report said.
Meanwhile, the consumption of Fintech services within the Nigerian ecosystem continues to grow and evolve at pace, with several FinTechs positioning themselves by offering credible B2B and B2C options across consumer parallels.
According to the FintechNGR report, usage of Fintech services by incumbents also continues to rise, as notable banks continue to partner with Fintechs to cover the key customer segments.
Policy and regulation (all government directives and initiatives including the presence of digital public infrastructure to facilitate financial services inclusion and innovation) is another challenge for the industry players as more than 50 percent of the Fintechs interviewed say there is a need to amend regulations in certain areas such as capital, KYC and reporting requirements.
Niche players also say their prevailing concern is around the lack of clarity and certainty on the regulation of emerging segments such as cryptocurrency, digital ledger technology, etc. In contrast, the Nigerian regulatory bodies posit themselves to be highly supportive of innovation.
Despite these challenges, the report said there’s potential for Fintechs to re-evaluate their hiring strategies. It explained that it expects the transition to remote working which is likely to become more prevalent, to provides opportunities to hire from a wider talent pool (local and international). “It is also an opportunity to reduce employee costs.”
“As the physical location of talent becomes less important, this could present an opportunity for Fintechs to recruit talent in a wider talent pool and in a more cost-effective manner,” analysts at FinetchNGR said.
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