Construction of the London Underground, the world’s first underground railroad, began in the 1850s. Despite upgrades and modernization over the years, there are several stations where curves in the track don’t line up with the straight design of train cars, creating dangerously large openings that people need to be cautious of. Since 1968, automated recordings of the phrase “mind the gap” have been used to warn people about the danger of such openings. Over the years, the expression has been adopted by popular culture and has become synonymous in the minds of tourists the world over with Britain, particularly London.Despite its popularity and appropriation by countless organizations, “Mind the Gap” remains the London Underground’s standard warning for riders. As financial institutions work to ensure that their organizations are equipped with the expertise necessary to successfully compete and continue growing, many are struggling with a significant void within their organizations — a talent gap. The Impact of Talent Shortages in BankingRunning a successful business requires an employee base with enough experience and expertise to meet an organization’s unique operational needs. When it comes to financial institutions, where day-to-day operations require in-depth knowledge of everything from risk management to regulatory compliance, privacy laws, and countless other specialty areas, an employee base with sufficient expertise is imperative. However, many financial institutions are facing significant talent gaps in key areas such as cybersecurity, artificial intelligence (AI), risk, compliance, and data governance, among others. In cybersecurity alone, there are roughly 460K vacant positions just within the US, according to data from CyberSeek, 40K of them within the finance and insurance industries. Despite widespread fears from workers that AI will eliminate jobs, the reality is that even the most sophisticated AI technologies rely on humans to operate. In fact, there is an AI talent gap of around 50%, according to data from Reuters. As technology continues to advance at a rapid pace, hiring for existing expertise alone is no longer sufficient. Workforces must continuously evolve to keep up with emerging tools and capabilities. However, many organizations have struggled to provide timely training aligned with these changes — an oversight that can open financial institutions up to major compliance risks.Citigroup is an example of one bank whose problems on this front have been quite visible. After being placed under consent orders in 2020 related to the bank’s compliance risk management, Citigroup was hit with $136MM in fines for failing to meet regulatory milestones, a large part of which had to do with insufficient skills and training within the organization. Exams found that the bank was specifically lacking expertise in areas including data governance, digital literacy, and data analytics. So far, the organization has failed to address its shortfalls quickly enough to satisfy regulators. Strategies for Closing the Talent GapTo effectively address talent shortages, many financial institutions are adopting a two-pronged approach: strategic hiring and proactive training. Each plays a vital role in strengthening workforce capabilities and minimizing compliance risk.1) Strategic HiringOrganizations are rethinking how they identify and attract candidates with the right mix of technical skills and leadership qualities. Emerging hiring practices include:
- AI-assisted recruitment and hiring. AI can be used to help narrow down large quantities of applicants based on specific factors, such as desired expertise and skill sets, or to identify flags such as individuals lacking proper visas to work in specific countries where jobs need to be filled. Filtering applicants this way can help human resource departments narrow candidates into manageable groups and facilitate quicker hiring.
- Recruiting athletes as leaders. Some organizations within the financial services industry have begun specifically recruiting elite athletes, both former professional athletes and high-performing high school or college athletes. The thinking is that skills necessary for people to succeed in advanced athletics translate well to leadership positions — qualities such as discipline, goal-oriented thinking, adaptability, resilience, and a strong understanding of the importance of teamwork, among others.
2) Proactive Training and UpskillingHiring alone is not enough. Institutions should also invest in the development of their current workforce to close skill gaps and ensure long-term resilience. Key initiatives include:
- AI-powered learning platforms. At Lloyd’s Bank, AI is used to identify skills gaps among its existing employee base and uses an experience platform to teach new skills in bite-sized learning increments. The bank has also conducted AI masterclasses for its top 300 executives, emphasizing both technical know-how and strategic thinking around AI applications. AI tools are also helping employees map out career trajectories and the specific competencies needed to grow within the organization, fostering a culture of continuous learning and internal advancement.
- Focused learning for ROI. Training programs should be structured with clear goals and support mechanisms to ensure that learning translates into on-the-job performance. As Donna Horrigan, VP at Integrity Solutions points out, effective training must emphasize repetition, coaching, and accountability to produce measurable outcomes.
- Rotational assignments. To broaden knowledge and build cross-functional expertise, some institutions are implementing rotational assignments for executives and key employees. This approach allows staff to gain hands-on experience across different departments and functions, promoting more holistic skill development.
As CFIs seek to plug talent gaps within their organizations it is important to look at the full picture, to determine the areas of expertise that are lacking and most needed and to take a two-pronged approach to filling any gaps both through hiring and training and reskilling existing employees. Absent a comprehensive approach, any such efforts will likely fall short.
