Fintech workers can find important next steps in their careers advancing digital transformation and innovation at community banks, industry leaders argue. 

As layoffs make more technology employees available for hire, community banks and credit unions hope to take advantage of opportunities to bring on more staff. 

The start of the pandemic drove explosive growth at financial technology firms, said Sarah Biller, co-founder of FinTech Sandbox and a founding member of the Mass. Fintech Hub. The need for enhanced technology for both consumers and within financial institutions, and the possibility of using fintech to address inequities within the financial system, drew investment capital to fintech firms, Biller said, so they spent it.   

“Categorically the technology industry is doing significant layoffs,” Biller said. “And I think we can attribute that to a natural phenomenon: When milk is plentiful, you don’t mind spilling it.”  

Is Stability Attractive Enough? 

Until interest rate hikes and economic uncertainty made investors pull back from funding startups, local financial institutions were at the losing end of the battle for tech talent. Some might still be. Working in the technology sector often involves receiving an equity stake in the company, which can have long-term payoffs that community banks and credit unions can’t offer. 

“Even with this huge wave of employees that are being released from big tech companies and all the rest, a lot of smaller institutions don’t have the culture or the compensation structure to attract some of those folks come in and help them figure out their next best steps in terms of digital customer experience,” said Jim Perry, a community bank and credit union consultant with Market Insights. 

Even at private or public stock banks, equity ownership can create regulatory issues for technology employees, Biller said, issues that the industry has started to discuss.  

Still, community banks and credit unions can find opportunities to hire from the bumper crop of unemployed talent. 

Julieann Thurlow, president and CEO of Reading Cooperative Bank, likened the hiring of technology workers to the hiring of mortgage loan officers. While loan officers wanted to work in commissioned roles during the mortgage boom, she said, applicants now are looking for the stability that comes with salaried positions. 

Depending on their stage in life, Thurlow said technology workers looking for the stability of a salaried role could be available for community banks. 

“Stock options don’t pay college tuition,” Thurlow said. 

Lenders Offer Professional Growth 

And it’s not just technology departments that could recruit these employees. Reading Cooperative Bank recently hired a new chief operating officer, Marianela Vazquez, who most recently worked at Boston-based fintech Numerated. The bank used Maine-based search firm Smith & Wilkinson, Thurlow said, and consciously sought talent inside and outside the banking industry. 

While roles like chief lending officer and chief financial officer might come from within banking, Thurlow said, a chief operating officer can come from other industries, including fintech, given the importance of technology and project management experience at banks.  

“The role of a chief operating officer is really a technologist today, so the skill set is pretty much in alignment,” Thurlow said. 

While entrepreneurs at startups might spur the innovations that move fintech forward, Biller said she also encourages technology workers to consider roles at financial institutions. 

“What I would tell this generation – and certainly for those who just got laid off – is that there are already employers who are on the other side in financial services who recognize the criticality of continuing to advance digital transformation, adoption and innovation in their own shops,” Biller said. 

 Optimism for Fintech Sector 

For its part, FinTech Sandbox isn’t backing off in its support for the fintech sector despite current troubles. The organization gives fintech startups access to data to help build their platforms, and the not-for-profit has recently added more data providers to its network, Biller said.  

“The period of digital transformation, what we might have assumed in the entrepreneurial community, or even academically, was going to take a decade, it got compressed into those two years,” said Biller. 

Diane McLaughlin

Consumers and financial institutions will expect the digital transformation that was accelerated by the pandemic to continue, ensuring demand for fintech solutions, she said. 

FinTech Sandbox, which last fall held its first fully in-person conference since before the pandemic, has also started to work with entrepreneurs from Africa, Latin America and the Baltic states, Biller said, expanding the organization’s reach.  

Mass. Fintech Hub, a public-private partnership launched in 2021 and operated by FinTech Sandbox, has also expanded its services, Biller said, including college programming that spreads awareness about working in the state’s financial services sector and job fairs for the industry. 

“We’re so excited that the next generation of innovation – where there’s a hard problem, where there’s hard tech, where it’s impactful – it’s going to come out of the commonwealth,” Biller said.