Skill gaps in financial technology companies in Nepal

Abstract

In Nepal, financial technology (fintech) companies have predominantly centred their operations within the payment domain, operating under the labels of Payment Service Operators (PSO) and Payment Service Providers (PSP), as regulated and licensed by the Nepal Rastra Bank. Fintech uses skilled human resources for its development and operation. The skill gaps among the IT employees working for fintech companies in Nepal have received little attention. This study aims to investigate the current status of skill gaps among IT employees in fintech companies in Nepal. Additionally, its purpose includes shedding light on the underlying causes of skill gaps, consequential effects, and anticipated coping strategies. This study employs a mixed-methods design, combining structured questionnaires administered to 57 out of 61 companies whose respondents were IT managers, as well as an interview inquiry with the 18 participants working in senior and entry-level positions. Analysis of the data using the Kruskal-Wallis test reveals statistically significant differences in skill gaps among entry-level, mid-level, and senior-level IT employees across 15 distinct disciplines. Post hoc tests further reveal significant disparities in skill gaps between entry-level employees compared to their mid-level and senior-level counterparts. While variations between mid and senior-level employees exist, they fluctuate between significant and non-significant differences. The highest level of skill gap is found to be at entry-level among the three groups. The results depict a small minority of entry-level employees performing their jobs at the required level. The major causes of the skill gap at entry-level include the education system not aligning with market requirements, limited exposure to real-life problems, ineffective internships, and training and certifications. The causes of the skill gap for mid and senior employees include changes in skill requirements, a high turnover rate, remote working, and training and certifications. The effects of skill gaps at individual levels are reduced productivity, hindering self-development, promotion, earnings, and work-life balance. The effects of skill gaps at the company level are a decrease in output and productivity, a delay in the launch of new products, an increase in operation costs, outsourcing, and a decrease in profitability.

September 2023