Articles & Papers

FinTech Trends Report: PE/VC

Perspectives from Boyden’s FinTech Experts 

By Paul Dennis, Dr. Dirk Friederich, Joost Goudsmit, Kare Hernandez, Bryan Ignozzi, Petter Kleppe, Lourdes Lopez, Sandra Mejia, Anita Pouplard, Nessrine Salah, Rick Wargo

Recruitment and Retention

Lopez: What opportunities does the current investment landscape present for executive talent seeking roles in emerging fintech sectors? 

Mejia (U.S.): The current investment landscape offers significant opportunities. As there's a shift from a high-risk, high-growth approach to a more sustainable model, experienced talent capable of navigating this new era of value creation is in high demand. While the VC industry faced challenges in 2023, signs of resilience and potential growth are emerging, with an emphasis on profitability and strategic investments in B2B ventures with predictable revenue streams. Executive talent with a focus on B2B may find an advantage in the current recruitment landscape. Additionally, as the regulatory landscape evolves, there's a growing need for expertise in regulatory and risk management. This presents opportunities for executive recruitment in these areas. Furthermore, many fintech companies are seeking acquisitions and turning to private markets for funds due to the current state of IPOs and SPAC listings. This creates opportunities for executive talent with knowledge in these domains. Despite a cooling deal flow, VC funds still have ample resources to allocate, indicating active searches for investments in solid businesses, requiring experienced leadership to drive growth.

Goudsmit (Netherlands): As the industry transitions towards a more sustainable growth model, experienced talent capable of navigating this shift is highly sought after. Additionally, fintechs are increasingly looking towards acquisitions, and with the current status of IPOs and SPAC listings, there's a notable shift towards private markets for funds, providing opportunities for executive talent with expertise in these areas. Despite a cooling deal flow, VC funds still have substantial resources to allocate, leading to active searches for investments in sound businesses, necessitating seasoned leadership. Moreover, the fintech investment landscape is undergoing re-evaluation, with a focus on companies demonstrating capital efficiency and scalability, attracting executive talent capable of driving such growth.



Lopez: What strategies are successful fintech organisations employing to attract and retain top talent amidst increasing competition from both traditional financial institutions and tech giants entering the space?

Goudsmit (Netherlands): Fintech companies seeking to fill high-skilled roles often leverage external experts to complement their internal hiring strategies, particularly for hard-to-fill skill sets. They also offer attractive salaries and benefits to entice the best talent. Moreover, successful fintech firms prioritize cultivating a strong and positive company culture that aligns with the values of potential employees. They invest in career development opportunities to retain talent and reduce attrition rates, while also focusing on building a robust employer brand that resonates with potential candidates and sets them apart from competitors.

Ignozzi (U.S.): With competition intensifying in the market and talent sought after by various sectors, fintech executives are becoming appealing targets for a range of companies, from startups to established financial institutions. To retain top talent, fintechs are implementing several strategies. One key approach is mobile empowerment, allowing employees to choose how and where they work—whether as digital nomads, hybrid workers, or fully remote. Many candidates prioritize the freedom to work in any location for cost-savings, efficiency, and work-life balance. Additionally, fintechs are responding to increased M&A activity by offering recruiting incentives such as payout incentives and exit acquisition strategy benefits. Incorporating market conditions into talent acquisition strategies is considered a best practice among many fintech companies.



Lopez: In emerging markets where fintech opportunities are rapidly growing, what unique challenges and opportunities do organisations face in attracting and developing talent? How can companies effectively navigate the talent landscape in these regions to build diverse and high-performing teams?

Ignozzi (U.S.): High-growth fintech companies in emerging markets encounter various challenges related to attracting and developing talent. These include regulatory ambiguity, nascent technology, and cash-flow variability, which result in distinct talent needs. Recruiters and executives can address these challenges by translating them into human capital strategies focused on teaming, diversity, and creativity. Promoting a culture of learning and development is essential to enhancing retention, recruiting efforts, and overall engagement and performance. While changing culture is a long-term endeavor, smaller, nimble fintechs in emerging markets can accelerate changes and reap benefits swiftly.

Mejia (U.S.): The demand for talent in emerging markets is escalating rapidly, presenting both challenges and opportunities for firms. To bridge the skill gap, companies should invest in education and training programs. While startups may not always match the compensation packages of larger competitors, they can still attract and retain talent by offering incentives such as stock options, flexible work arrangements, and opportunities for advancement. Fostering a positive work culture emphasizing innovation, collaboration, and employee development can help startups stand out. Providing opportunities for professional growth and recognizing employee contributions enhances job satisfaction and retention. Moreover, in some emerging markets, the cost of hiring skilled professionals may be lower compared to more developed regions. Embracing diversity and inclusion in hiring expands the talent pool and cultivates an innovative work environment. Encouraging diverse perspectives leads to better problem-solving, innovation, and decision-making. Prioritizing purpose-driven organisations, growth mindset, and diversity is crucial for fostering innovation and long-term success in the fintech sector, enabling companies to attract and retain talent and build high-performing teams.



Lopez: Given the expectation for increased M&A activity in 2024, how do you envision this impacting the recruitment and retention of senior executives in both acquiring and target companies?

Mejia (U.S.): The anticipated surge in M&A activity, driven by partnerships and fintech growth, is poised to reshape recruitment practices within the financial services sector. Companies will need to adapt their hiring strategies to attract top talent, address skill gaps resulting from industry transformations, and ensure successful integration post-merger or acquisition. Fintech firms involved in M&A activities will seek senior executives aligned with their post-transaction goals. With this uptick in M&A, senior executives experienced in navigating complex deals, integration processes, and change management will be crucial for success. Talent retention will be paramount to ensure long-term growth and a smooth transition. A strong cultural fit between senior executives and the company will also be essential for integration. Fintech companies will continue to require executives who thrive in ambiguity and uncertainty, are motivated by undefined challenges and potential rather than job security, and collaborate effectively to shape the business.



Lopez: In light of the reduced number of fintech IPOs in 2023, how might this impact the demand for executive talent in the fintech sector?

Pouplard (France): Amidst the tumultuous past 18 months, fintech experienced a significant decline in IPOs and M&A activity. Fintech, for instance, saw a decline of -76.1% YoY, representing $5.9 billion in VC exit value. Additionally, Fintech M&A activity dropped by -33.6% YoY to $47.1 billion in 2023. Valuations, in both public and private sectors, have recently been mean reverting.

Many fintech executives and candidates view exit strategies as a key part of the compensation model. Since there is pent up demand for fintech IPOs and an uncertain outlook; fintech talent is starting to view talent opportunities as longer-term employment horizon. Traditionally, high demand and low supply of fintech talent created retention issues where the average tenure was less than 3 years. As exit strategies and IPOs have been delayed, the average tenure of fintech executives is increasing. This means less talent movement and more stability for the executive team. As tenure increases companies need to shift by incorporating strategies that focus on talent engagement, learning and development.

Goudsmit (Netherlands): The reduced number of fintech IPOs may lead to increased demand for executive talent capable of navigating a challenging funding environment and guiding strategic pivots or alternative growth strategies. Professionals with strong finance and capital markets backgrounds may be sought after to explore other forms of fundraising and capital structuring. Furthermore, the shift from rapid growth to sustainable value creation will require executive talent capable of driving operational efficiencies and profitability. Additionally, the reduction in IPOs may heighten the need for candidates skilled in risk and compliance as fintechs prepare for a more regulated environment. Overall, the changing investment landscape may prompt a re-evaluation of the skills and experiences required in fintech leadership, with a stronger emphasis on strategic, financial, and operational expertise.

Ignozzi (U.S.): The reduced number of fintech IPOs has influenced the perception of exit strategies among fintech executives and candidates, leading to a longer-term outlook on employment opportunities. Traditionally, high demand and low supply of fintech talent contributed to retention issues, with average tenures less than 3 years. However, delayed exit strategies and IPOs have led to increased tenure among fintech executives, resulting in less talent movement and greater stability within executive teams. As tenure increases, companies need to adopt strategies focusing on talent engagement, learning, and development to effectively manage this shift.



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