The latest Willis Towers Watson’s Fintech and Financial Service sector pay reports suggest that this year will see a wider range of salary outcomes as the economic recovery from these sectors differ greatly. A detailed study of the pay mix in the Financial Services and Fintech sectors shows that, while the two sectors are aligned on the proportion of pay that is provided in the form of base salary, Fintech companies offer a higher proportion of pay to long-term incentives (LTIs). For mid-level professionals at Fintech companies the LTI proportion can be as high as 41 per cent in some cases, compared to just 11 per cent for those at the same level in Financial Services firms.
“Fintech and Financial Services firms have been battling for talent across a similar set of roles for some years,” says Paul Richards, data services leader EMEA, Willis Towers Watson. “No longer the new kids on the block, many Fintech firms now have an established market presence, high growth potential and significant pay budgets at their disposal. This, along with a lower number of roles under pay scrutiny and regulation, and a start-up culture focused on share-ownership as opposed to cash-based pay, has led to significantly higher LTI opportunities at many Fintech companies, which could be more attractive to potential talent.”
The study also provides some insight into the most desirable skills in each sector, based on the highest salaries and pay rises compared to other roles at a similar level.
For traditional Financial Services organisations the big focus is on technology skills, such as DevOps (6.3 per cent median pay increase) and User Experience (up to a 4.8 per cent increase) roles, that are relatively scarce and in competition with big technology companies and Fintech firms for talent. However, for the Fintech sector, due to increasing regulation and public scrutiny, there is an increase in competition, and pay, for regulatory and compliance roles (3-6 per cent median increase, depending on the role).
Overall pay rise budgets for Financial Services and Fintech firms also differed in 2021. Over half (54 per cent) of Financial Services firms are planning pay rises in the 0-2 per cent range this year, of which one-in-10 (11 per cent) are planning a pay freeze. Only 39 per cent of Fintech firms are planning to offer these more modest pay rises, with 8 per cent freezing pay. At the higher end of the pay scale, only one-in-20 (5 per cent) of Financial Services firms are planning to offer pay rises of over 3 per cent, whereas the proportion of Fintech companies offering the same is triple that, at 15 per cent.
Richards comments: “In 2020 both Financial Services and Fintech pay budgets were heavily weighted towards lower and mid-level roles with almost universal base pay freezes for the top five levels of seniority (global grade levels 16-20).
“This dynamic is striking and it will be interesting to see how the recovery from the pandemic and effect of Brexit will affect the pay at the various levels within the industry, following the disruption to business models and revenue seen by many companies,” he concluded.