New research from Davies reveals that financial services (FS) businesses are struggling to bridge the digital skills gap. With hiring new talent alone being insufficient to address this challenge there is an increased focus on retraining and staff retention.

Consulting at Davies commissioned an independent survey of 501 senior decision-makers within UK-based financial services companies. It found that almost two thirds (62%) of firms are prioritising training and upskilling their current work force over recruitment. In addition, 55% of firms say that they have apprenticeship schemes in place to support the development of their workforce.

Addressing the digital skills gap is one driver of this, as over a third (38%) of respondents admit that there is a lack of digital skills in their business. Yet there is still work to be done in making the most of existing talent as more than two fifths (41%) say they are failing to get the best from their staff.

Broadly speaking, talent acquisition and retention was identified as a major challenge for a quarter (24%) of the firms surveyed, while nearly half (47%) are struggling to keep up with rising salary expectations.

Paul Johnson, Managing Partner Consulting, said: “Hiring and retaining talent has always been crucial for success in the financial services sector. However, in today’s business landscape, a shortage of digital skills has become a particularly acute challenge. Despite the long-standing awareness of this skills gap, firms are still struggling to find effective solutions.

“Given this context, it’s no surprise that businesses are increasingly turning to retraining their current employees. Nonetheless, more work needs to be done to ensure that employees’ potential and talents are utilised as effectively as possible.

“Whilst upskilling is clearly part of the solution, with more than a third of the sector’s workforce due to retire over the next decade we have to attract fresh talent too, the question is how? In my view, it requires a major re-think across the financial services industry. Attracting and retaining top talent is not a task that any single organisation can tackle alone, the entire sector needs to collaborate to promote the industry and create clear pathways into long-term roles. Only then can we address the digital skills gap effectively while making the most of the talent that we already have.”