An increasingly competitive recruitment market could hinder startups in Scotland’s burgeoning fintech sector, according to senior industry experts.

Despite Scotland’s fintech community experiencing a period of exciting growth, newcomers seeking talent face a “hot market” which makes it difficult to secure the skills-set needed to get up and running.

Anthony Rafferty, Chief Executive at Edinburgh-based fintech Origo, believes the recruitment landscape has changed dramatically in the space of a few years; and looks set to become even more challenging.

“Fintech is thriving in Scotland and our excellent universities are producing a pipeline of really good candidates, but on a UK level there is a shortage of specialists and experts,” he said.

“Fintech is a hot recruitment market, but with wage inflation and higher expectations from candidates, there is no doubt it is becoming more difficult to find the right skills than it was just a few years ago,” Rafferty added.

Andrew Gibbon, Head of Growth at ePOS Hybrid, said the Scottish fintech skills shortage means opportunities are outstripping available talent across a range of key functions.

The hospitality tech firm is actively recruiting in key areas, but Gibbon warned that “aggressive recruitment” is now prevalent throughout the Scottish fintech sector.

“Organisations are fighting over the same limited talent pool within Edinburgh and Scotland, and startups are the ones missing out on the crucial talent they need to scale and attract new investment,” Gibbon said.

“The more businesses struggle to recruit locally, the more they are going to turn to remote working options to fill the businesses critical positions,” he added.

Addressing the Scottish fintech skills shortage

Rafferty and Gibbon’s comments come as Core-Asset Consulting publishes its Annual Salary Guide, which provides an overview of salary levels and major developments across Scotland’s financial services sector.

According to the report, the current skills shortage is exacerbated by a combination of Edinburgh’s long-standing reputation as a major financial hub dove tailing with the growth of the nation’s up-and-coming fintech ecosystem.

Louise Powrie, Divisional Director for Fintech and Pensions at Core-Asset said the widening focus of companies operating within the fintech ecosystem also contributes to the ongoing talent shortage.

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She said: “Its continued growth centres on the development of tools and software solutions to meet the need for more user-friendly platforms and applications, seamless data flow, AI-assisted dashboards, enhanced risk management, dynamic data management, online payments and transactions, and the functionality of the digital marketplace.

“Our report points to a demand within fintech for business analysts and developers, particularly those with cloud technologies, and technical and solutions architects and engineers who can work with clients to truly understand their needs and provide innovative solutions.”

Weathering the pandemic storm

Powrie added that the coronavirus pandemic acted as an “extreme stress test” for the Scottish fintech industry; one which it comfortably passed.

“The sector has proved extremely resilient to the current global crisis and is emerging successfully from the pandemic,” she said.

Crucially, with many organisations pivoting to remote or hybrid work practices during the pandemic, the talent pool has widened for companies operating in the industry.

“In addition to being the catalyst which has pushed businesses towards digital solutions, Covid has been responsible for firmly establishing working from home,” Rafferty said.

“Our initial fears at the start of lockdown was that productivity would drop, but the opposite happened and working from home has really suited this part of the financial services sector. The idea of only recruiting people locally or within 30 minutes of Edinburgh is no longer the case and is totally outdated.”

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