A shortage of people with a well-rounded skill set, including role-specific technical skills and in-demand soft skills, represents a threat to the health of the talent pipeline in financial services, a new report has found.

In particular data analytics, machine learning, digital transformation and risk and compliance are the specialties where the greatest skills gaps exist, the study by Financial Services Ireland (FSI) through IFS Skillnet established.

The current and future workforce also need to be prepared to work within the area of sustainable finance, the analysis discovered.

This is because there is a widening gap between the skills that are required to support growth in this area and what is actually available.

The financial services sector is aiming to make Ireland one of the top 20 global financial centres by 2025 and the study found that talent will be key to achieving this.

"As the report states, Ireland is home to a vibrant and dynamic global financial services sector," said FSI group director, Patricia Callan.

"Banking, insurance, asset management, funds industry, fintech, and securities markets contribute to a robust, diversified financial services ecosystem, employing over 52,000 people and generating €19.3 billion in GDP for Ireland."

"It is vital that we take action in the areas identified in the report to ensure we not only protect the jobs currently in the sector but build on the huge potential that international growth, particularly in the fintech sector, offers to Ireland."

Sustainable finance was seen by respondents to the research as the greatest opportunity for the sector, followed by fintech.

Greater gender diversity is also required, it found, while it also noted that Ireland is competing against other locations at a time when labour is in short supply.

On cost of talent, the report found that "trying to be the lowest cost provider is not an optimal choice given both the inherent cost base in Ireland and, more importantly, the growth in other areas with added value."

Sustainable finance was seen as a growth area

The report, Financial Services in Ireland – Skills of the Future, recommends that talent should be attracted into the financial services area early.

It also suggests that by showcasing themselves as tech focused, innovative and world class employers, financial institutions could attract in talent that is transitioning roles or sectors.

Talent initiatives that increase the level of access to in-demand skills need to be extended, the report claims, while mid-career employees should be targeted for upskilling and reskilling.

Tracey Donnery, director of communications and policy at Skillnet Ireland said changes to the financial services sector will be fuelled by the increasing pace of technological innovation and convergence.

"Responding to the increasing importance of ESG and sustainable finance will also be vital," she said.

"Today's report and its recommendations will enable the industry to develop the talent to meet the challenges ahead and maintain Ireland's leading position."

The Minister for Further and Higher Education, Research, Innovation and Science, Simon Harris, the ability to attract, recruit and retain top talent is essential to the sector’s continued success.