Posted By Jessica Weisman-Pitts
Posted on August 18, 2023
Dangerous dependency: How a new approach can remove the damaging crutch in the banking and finance industry created by widening IT skill gap
By Julian Hamood, President, Trusted Tech Team
In today’s hyper-connected world, the banking and finance industry has undergone a profound digital transformation, elevating technology to the forefront of operations. As the sector becomes increasingly reliant on technology, the demand for skilled IT professionals has surged exponentially. Unfortunately, the widening IT skills gap has created a dangerous crutch that financial institutions depend on, leaving them susceptible to security and operational risks—not only to the organizations themselves, but to their customers and employees.
It is absolutely imperative for banking and financial leaders and decision makers to be fully compliant in not only exploring the criticality of these issues with a sense of high urgency, but also to be fully committed to long-term efforts to continuously find and implement new approaches and solutions.
The Dangers of Relying on Insufficient IT Skills
One of the most significant risks faced by financial institutions is the growing number of sophisticated cyber threats. A stark example reported in TechCrunch, that not only shook the banking industry, but over 200 organizations and up to 17.5 million individuals, was the mass hack of the file transfer tool, MOVEit as of July 2023. As the implications of the attack continue to emerge, further breaches have been confirmed at Shell, First Merchants Bank, City National Bank, and a number of international targets.
Following the discovery of a flaw, MOVEit promptly patched the vulnerability; however, cybercriminals had already infiltrated the system, gaining access to vast amounts of sensitive data. The responsibility for these breaches was claimed by Clop, a ransomware group with links to Russia, and they issued threats to publish the stolen information on the dark web.
The exploitation of vulnerabilities in the bank’s outdated IT infrastructure was a direct result of the insufficient number of skilled professionals capable of identifying and addressing potential security loopholes. As a consequence, the breach led to the compromise of sensitive customer data, resulting in significant financial losses and damage to these organizations’ reputations and regulatory compliance.
Furthermore, the IT skills gap also hampers innovation and modernization within the financial sector. The harsh reality is that the banking industry has been slow to adopt cloud-based computing due to a shortage of qualified cloud engineers. According to the New York Times, currently, major banks run their own data centers, which house computer servers that process vast troves of customer account data, payment records, and trading logs. Running the machines is costly because they require a lot of electricity and also need to be kept in air-conditioned rooms.
They go on to say that executives have been hesitant because banks are tightly regulated by governments, and any sudden changes involving consumer deposits or privacy aren’t possible. They’re also concerned that computing over the internet will open the door to cyberattacks. And some firms are held back by old computer systems that are difficult to revamp or retire, making the transition even more tricky.
Examples and Key Takeaways
Security Breach Fallouts: There are thousands of examples of security breaches, and every investigation where a financial institution has suffered from massive cyber attacks has always shown that the attacks were facilitated by the lack of a skilled cybersecurity team capable of deploying advanced threat detection and prevention measures.
- Key Takeaway: There should be an immediate need to invest in cybersecurity talent and robust training programs to prevent severe repercussions, such as a substantial decline in customer confidence and an expensive legal battle to rectify the damages.
Cloud Transformation Delay: Just last year, Capital One outlined their shift from legacy data centers to the cloud, and among the many benefits they discuss are the dramatic improvements in system availability and disaster recovery, including cutting both the number of transaction errors and critical incident resolution time in half. In the absence of cloud-savvy IT professionals, this process could have led to cost overruns, impacted brand perception, and loss of customers to more technologically agile competitors.
- Key Takeaway: Investing in and building a skilled cloud team and partnering with experienced cloud solution providers expedites cloud adoption and ensures seamless customer experiences.
Data Analytics Roadblocks: The reality is that data analytics is transforming the finance industry, and it’s important for institutions to recognize the potential to gain actionable insights and make informed decisions. However, a shortage of skilled data scientists will undoubtedly hinder the implementation of a comprehensive analytics strategy. Failure to leverage and manage vast data resources effectively can lead to missing out on valuable growth opportunities and operational efficiencies.
- Key Takeaway: Cultivating a data-driven culture and investing in data analytics talent empowers financial institutions to unlock the full potential of their data assets.
A New Approach: Bridging the IT Skills Gap
The following strategies provide a blueprint for financial decision makers to address the widening IT skills gap and eliminate the detrimental dependency:
- Talent Development Partnerships: Collaborate with leading educational institutions and technical training providers to design specialized curricula tailored to the financial industry’s evolving needs. This partnership ensures a steady pipeline of skilled graduates and professionals.
- Focused Upskilling Programs: Invest in upskilling programs for existing IT personnel, enabling them to acquire the latest competencies required in the digital age. Offering continuous learning opportunities boosts employee loyalty and enhances the overall talent pool.
- Managed Services for Expertise Augmentation: Leverage managed IT services and cloud solutions that provide access to a pool of specialized professionals. This approach bolsters in-house capabilities and accelerates technological advancements.
- Cybersecurity Certifications and Compliance: Encourage IT professionals to obtain relevant certifications in cybersecurity to bolster the organization’s defense against cyber threats. Compliance with industry standards ensures a robust security framework.
It’s clear that the widening IT skills gap poses grave risks to the banking and finance industry, affecting security, innovation, and customer satisfaction. Decision-makers in the financial sector must recognize the urgency of addressing this issue and embrace a new approach to bridge the gap.
By investing in talent development, upskilling, and strategic partnerships, financial institutions can fortify their technological capabilities, reduce risks, and remain competitive in a rapidly evolving landscape. Eliminating the dangerous dependency on the IT skills gap will secure the future of the industry and enable it to thrive amidst the challenges and opportunities of the digital era.
About author:
Julian Hamood is the President of Trusted Tech Team (TTT), the leading Microsoft Cloud solutions and support provider. As a recognized expert in IT solutions, licensing consultations, and customer relations with more than 16 years of experience, Hamood established TTT’s position as a Microsoft CSP direct-bill partner, carrying multiple Solutions Partner Designations, and the now-legacy Microsoft Gold Partner competency while leading the company’s meteoric growth as it surpassed its revenue goal by by doubling revenue every year for the last three years. In addition to his business achievements, Hamood is an active volunteer and primary sponsor for Project Youth OC, a non-profit organization that uplifts underprivileged, underserved and/or at-risk youth in local communities through counseling, mentoring, and professional development services. He also helps fund United Champions for Change, a non-profit organization that aims to raise awareness of educational system inequities and help underprivileged youth gain better access to education, while continuing to support and donate to the Wounded Warrior Project, a non-profit organization that provides programs and services to wounded veterans. Hamood earned his Bachelor’s degree in Business Management, Marketing, & Related Support Services from California State University, Fullerton.
