What AI talent in finance wants. Plus: How a mega-bank’s cyber chief deals with threats, an airline merger takes off, and more

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It’s a good time to be an AI developer on Wall Street. In many ways, they can essentially name their price.

Bloomberg reported last week that AI talent is an increasingly hot commodity, and banks can’t keep up. Goldman Sachs lost 60 people in the AI space in the span of a year, according to Bloomberg, citing data from Evident AI. Most of those employees went to Morgan Stanley and Citi.

Meanwhile, JPMorgan, which said last week its hefty AI investments are beginning to generate revenue, added 101 AI-focused employees. Wells Fargo added 130 new AI hires.

In Goldman’s case, much of its AI talent was poached by competitors in the financial space. But recruiters say it’s not just the banking sector that people are leaving for. Many are moving to Big Tech.

“Given the extreme demand for anyone even associated with AI, the talent market is quite fluid,” says Ryan Bulkoski of Heidrick & Struggles.

Bulkoski says that moving from bank to bank can be tricky due to non-competes, so it’s becoming more common for AI talent to move to other industries, “bringing their learnings from banking to tackle a new challenge.”

Whether they stay in finance or move to Big Tech, compensation for AI talent can be substantial. In a recent survey about AI pay from Heidrick & Struggles, total comp for data, analytics and AI executives in financial services, which had the highest base comp, was $1,071,000.

Meanwhile, AI execs in the technology sector had the highest total comp at $1,470,000, much of which was made up of annual equity grants or long-term incentives.

“Particularly for talent moving from Big Tech to banks, we’ve seen recruiters putting together creative bridge offers around compensation to try to match the lucrative equity payouts from Big Tech,” Bulkoski says.

“Another strategy we’ve seen is the difference in vesting schedules for bonuses and equity — while Big Tech equity will vest monthly or quarterly, financial services bonuses are often once a year, likely an intentional move that builds in some retention.”

As for what’s appealing about the financial services industry for AI pros, Bulkoski points to the “flatness” of banks’ tech structures. “It presents an opportunity to be part of a smaller but mighty group, as opposed to at a Big Tech firm, where AI talent is aplenty. Banks have an opportunity to capitalize on this and create a unique value proposition for their AI talent.”

This talent expects more than just a lucrative compensation package, according to Kairong Xiao, a professor at Columbia Business School. “When comparing work-life balance and additional benefits such as parental leave, tech firms generally outperform financial institutions,” he says. “Consequently, significant efforts are required from major banks to bridge this gap and compete effectively.”

In addition to competitive compensation, financial institutions can stand to streamline the interview process and offer flexibility, says executive search recruiter Caroline Pennington. “The companies that can offer those two things are winning the war on acquiring top talent,” she says, adding that culture is critical. “A winning and inclusive culture leads to a higher percentage of retention. And culture starts at the top.”

‘Tis the season to be vigilant about avoiding scams and fraud. The Finance Files caught up with Tami Hudson, executive vice president and cybersecurity client officer at Wells Fargo, about what’s top of mind for clients and for cyber pros within banking.

FF: When it comes to cyber threats, what are the main things that you’re talking to clients about right now?

TH: I think it's a mix of the old and the new. We saw a very different cyber threat landscape with the introduction of Covid. And then after that, it's just grown. So previously, if you think back years ago, when someone thought of cybersecurity it was very much in the four walls of their office or building or even home. And now with the rapid increase in cloud usage, the IOT, or Internet of Things, the remote workforce, our landscape, our platform for doing business has really increased.

What that means is the more tools, the more activity we have in doing business online, through the internet, using various tools through the cloud — that also increases the threat landscape. So, as it’s benefiting us and helping us become more efficient and effective, it is also giving an opportunity for the threat actors to then come in and start or even continue with the execution of cybersecurity frauds.

When we think of traditional fraud — the imposter scams and identity fraud that so many of us have heard about — that is still occurring, but it's occurring at a more rapid pace because of that expanded attack surface. So, now we are seeing not only the traditional types of scams where identity has been stolen, credentials are being taken over; we're also seeing an influx of threat actors using the information that is readily available on the internet, YouTube, Instagram, LinkedIn — and what they're doing is creating a personality based off of information that we as consumers are putting out there. After they do this sort of research, they use bots to try to guess passwords. And as humans, we are creatures of habit, right? Many of us put information out there thinking it's innocent, but we also at certain times of year probably repeat information out there. ‘I love my dog. I love Costa Rica. I'm going to post about my dog and post about Costa Rica.’ That information is then used and ingested to guess certain passwords.

So, that's one of the things that we're seeing now, where consumers are being attacked not only because they're clicking on various links through websites, but also because threat actors are using ‘innocent information’ that we as consumers make readily available. But they are using that for very malicious means.

FF: With the threat landscape broadening, what does that mean for your job? Have you been hiring more or what is the solution?

TH: One of the things that not only in the financial services industry, but across various industries, remains important and one of the things that's top of mind for us is retaining and attracting the very best talent.

That is something that is not a one-and-done sort of project; it's something that we are consistently doing. Like I said, not only financial services, but the retail industry, healthcare industry, et cetera. And we do that because of the evolution of the threat landscape. So we have a very intentional level of due diligence that we do when we're attracting talent in.

Then once onboarded, we also have a very intentional and continuous level of education awareness that we are constantly engaging our workforce on. That education comes from the talent that we have, from our understanding of the threat landscape, from the collaboration that we have with the public and private sectors, so not only the government but also other banks that we work with. We want to make sure that we have a very relevant and timely understanding of the threat landscape so that we can be proactive in protecting our consumers and our assets.

FF: You mentioned that the pandemic changed things in the cybersecurity landscape. What has changed most in the past few years?

I think when we look at cybersecurity, what we've seen continuously change is just the level of sophistication that comes in when threat actors are creating various threat attacks or even carrying them out. If you go back four, six, eight years ago, it was ‘easy’ to spot a phishing email — with all of the misspellings, the communication is likely not what we would normally see when we're talking to someone that we know or someone we've done business with. And then in the past two years or so, those phishing-type emails and the other sophistication when it comes to cyber fraud have reached a very high level. So, it requires a consistent understanding of the landscape and of the threat actor.

I tell consumers, even my parents: If you get a suspicious email, if you get a call, if you get a text message, research that particular company on the internet by typing the word scam and see what comes up. That is one really easy way to try to protect ourselves.

But when we think about how things have changed and how they've evolved, especially during this season, there are many scams that trigger and relate to exactly what many of us are doing at this time of year — just giving or trying to get the best deals. There are scams over gift cards, which are common during this time of year, and fraudulent gift-card barcodes where the threat actor can place a fraudulent barcode number over a valid gift card, and once the gift card is scanned, that scanner automatically loads funds onto the threat actor’s account rather than the user's intended gift card.

Things like that are very rapid during this time of year because all of us are in a rush to get the best gifts, perhaps get the best deals, and many of us are giving even to various charitable organizations. And we may not always pay attention to that particular website that we're clicking on.

FF: Do the multiple conflicts overseas add more risks for cyber threats?

TH: I would say we are consistent and we remain vigilant. And that's with any potential or perceived or assumed threat activity in the landscape. That goes across the board.

That is a position that we as a financial institution, and as a large bank and a large company, have to take. I don't think that's independent or unique to financial services. I think that's a position that any cybersecurity executive or professional would take. It's a matter of understanding that threat actors are not going to stop in their particular attacks. They're not going to lessen the impact that they're trying to drive.

FF: For you and your team’s education and training, what are some of the things that you’ve been doing to stay on top of the latest cyber threats?

TH: Many institutions have multiple and even intentionally redundant controls in order to get information, validate that information, and stand up the right level of defenses internally.

The Cybersecurity Infrastructure and Security Agency, which was created by the Biden administration, has a ton of very useful information that businesses and consumers can use to help stand up or advance their cybersecurity programs. I do a tremendous amount of reading and a tremendous amount of speaking to people across government, across various sectors, because the fact is we have a common threat enemy. A rising tide lifts all boats, so the more that we can share about activity, about potential threats, perceived threats, the more we can understand what that environment looks like. That not only benefits each of the institutions that are standing up cyber programs, but it benefits each of our consumers.

That, in whole and collectively, upgrades our economy and it upgrades our society from a level of protection. That's the business that we're in.

FF: When it comes to cyber professionals in their career development, what piece of advice do you give to them?

TH: There's probably a misconception that all very successful cyber people started out as coders or come from an extremely technical engineering background. I started off with doing system implementations myself, but I also have an MBA and that's not something that people would think of for the cybersecurity field. Cyber, at the end of the day, is a business problem. It's not just a technical problem and doesn't stay within the walls of the technical rooms. It is a business problem and therefore a business priority.

The more that we can get people to understand both sides of that — to close the gap by really understanding the technical components and linking those to business priorities and business challenges — that will help to bring in additional talent. I think it will help grow the talent base in cybersecurity, make more cybersecurity professionals and organizations successful, and benefit all of us.

Alaska Airlines and Hawaiian Airlines want to be one, as part of a $1.9 billion deal announced last week. The airline carriers will operate under their current respective names, and the new company will be led by Alaska CEO Ben Minicucci, who called the deal “an exciting next step in our journey to elevate the travel experience and expand options for guests.” The companies immediately addressed regulatory hurdles by saying they’re not worried, with Alaska CFO Shane Tackett saying in a Bloomberg interview that he believes “the facts will prevail that this is pro-competitive and pro-consumers.”

91%

It turns out that when private equity firms invest in a company, the CFO of said company worries about their place in the organization. About 91% of CFOs surveyed by consulting firm Accordion said that after PE funding, they become concerned about job security. Reasons are typically related to different sets of priorities. For example, private equity sponsors said M&A is their second largest priority post-deals, whereas that’s the last thing on the minds of CFOs (they ranked it last among priorities). “There’s increasingly more misalignment between the sponsors and the management teams, because there’s a whole generation of CFOs now who’ve never dealt with as volatile an environment as we see now,” Accordion CEO Nick Leopard told CFO Brew. That results in “a lot of misalignment” on priorities to create value once the deal closes, Leopard said.

Let’s travel back to 1791, shall we? In December of that year, the Bank of the United States’ 20-year charter began. It was a deal approved by Congress for the institution, which is commonly known as the First Bank. The bank didn’t oversee fiscal policy. At the time, each state bank could print its own banknotes, but First Bank was “the closest thing to a national currency.” It issued notes for paying federal taxes and to pay government bills. In 1811, Congress did not renew the bank charter. Five years later, the Second Bank of the United States was established.

With major financial institutions struggling to hang on to AI talent, it’s become a competitive market.

Do you expect that AI jobs within finance will continue to be in high demand in the new year? What other roles would you put in the category of in-demand in 2024?

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