In the spring of 2023, the financial services (FS) sector was rocked when three regional banks collapsed: Silicon Valley Bank (SVB), Signature Bank and First Republic Bank. Battering the banking sector, fears of a financial contagion spread, making it the biggest banking failure since the Washington Mutual Bank in 2008.
Today, the question on everyone’s mind is: has the 2023 US regional banking crisis finally come to an end?
While the recent earnings report of three major banks, as well as warnings from the IMF (International Monetary Fund), shows that the ramifications of last year’s crisis are still being felt, there is also a host of new opportunities that have emerged from the fallout.
Despite the gloom, banks are in a great position to capitalize on the top-tier talent and hordes of displaced customers that the 2023 crisis created.
How the 2023 banking crisis creates new
opportunities in the talent landscape
The consequences of the 2023 regional banking crisis was felt profoundly by banking talent, who found themselves tackling unprecedented challenges.
As banks faced financial uncertainty, many had to downsize their workforce. A year later, they continue to tighten their belts, with the US’s biggest banks having just laid off over 17,000 employees. Compounded by less hiring activity, we’re now seeing waves of amazing talent that need a new home, but can’t seem to secure one.
This deluge of experienced, skilled workers looking for a place to go presents exciting possibilities for banks to attract the crème de la crème of FS talent. Seizing this opportunity could be the guiding star that helps banks weather the storm, flex to new demand and come out on top.
Ignoring this surge of opportunistic hires could leave banks at a disadvantage when the landscape finally restores itself and the talent shortage worsens. I view tapping into this pool of talent a strategic imperative for future proofing your business within a turbulent industry.
How banks can fill the market gap for banking
clientele
The 2023 banking crisis also impacted the expectations and experiences of banking clientele, particularly ultra-high net worth individuals (UHNWI).
Over the last twelve months, these discerning customers have been grappling with a starkly altered financial landscape. Used to a personalized, high level of service, they have been confronted by an erosion of the white glove experience they once received.
This has prompted a sobering reassessment of priorities among banking clientele. Today, they place a greater emphasis on transparency and trust, especially given the persistent vulnerabilities within the regional banking sector. But for forward-thinking banks, this can be leveraged into a chance to expand.
Looking at the current landscape of wealth management, I believe we’re in a new era of client-centricity and accountability. The banks that went under in 2023 left a big gap in the market that caters to entrepreneurs, business owners and UHNWIs. Now is the golden time for banks to pitch into that niche, restore confidence and create a better home for this type of customer.
The importance of looking for talent – even if you’re not hiring
I can’t emphasize enough the importance of ensuring your talent pipeline is full. Even if you’re not immediately hiring, it’s crucial to keep an eye on the future and your finger on the pulse so that you can continue attracting highly skilled talent and beat out your competitors.
A deep talent bench also fosters robust succession planning. By ensuring you have skilled individuals readily available to step into key roles, it minimizes disruptions and maintains stability during challenging, and often unforeseen circumstances. In turn, this allows you to better serve your clientele and outvie your less-prepared competitors.
If you’re looking for exceptional talent, but are struggling to navigate the turbulent terrain of today’s market, we can help. Contact us today to arrange a call and find out how we can support you.
