Banks Try Novel Staffing Option to Solve Tech Skills Shortfall

An externship can introduce students to a career in financial services while also helping banks and credit unions explore new products and new ways of doing business. Institutions can tap digital-native college students to conduct research into industry-disruptive technologies such as Web3.

Externships are an innovative staff development idea catching the attention of bankers seeking to get up to speed on emerging trends more quickly.

While internships have been a key recruiting tool for decades, the quality of the mentors in the typical internship program will make or break its success. A great mentor provides a student with learning opportunities from a real-world project while a mediocre mentor may only provide an intern with busy work and little feedback.

Externships take a different tact. While interns take on professional responsibilities and perform tasks for the employer, externs learn from professionals in the field without completing any job-related tasks.

Talent Pool:

45% of externs are hired by a Fortune 1000 company within six months of externship completion.

As the name suggests, externships are fully remote. They are often described as online experiential learning programs that include structured training and mentorship. A typical externship for a larger business has between 30 and 50 students.

Externships differ from internships in several ways:

  • Externships are typically shorter, lasting six to eight weeks.
  • The student time commitment for an externship is about 10 hours per week.
  • Externs work on a real business problem for a company, not always the case with internships.
  • Externs aren’t paid, but receive an educational stipend at the end of the externship.

Read More: How to Survive Banking’s Biggest Threat: Staffing

Building the Bank of the Future

Externships are starting to catch on in banking. HSBC Bank is working with Paragon One, a company in the extern space that connects students and recent grads with companies.

HSBC’s goal for its externship program is to work with students who can help the bank design and build the bank of the future. As part of the program, students research potential banking solutions based on what consumers will want next or how the retail bank can improve how it operates.

To apply for a recent HSBC externship, students and recent grads were required to meet the following requirements:

  • Familiarity with Web3 or a strong interest in learning.
  • Familiarity with banking, either through coursework or general understanding.
  • Interest in product development or starting their own company/crypto protocol.
  • Passion for solving challenging problems and delivering great user experiences.
  • Excellent communication and presentation skills.
  • Willingness to work in a fast-paced environment.

Paragon One provides support in three main areas, says Matt Wilkerson, the company’s CEO. A recruiting team is responsible for student sourcing; a learning and development team works with the institution to define the goals of the program; and a program management team supports students and functions almost as teaching assistants.

Banks and credit unions aren’t expected to do any heavy lifting, Wilkerson explains, but they should plan to spend a few hours with an extern provider to kick off the program and then an additional hour or so per week for working with students.

Read More: Bank DEI: From Empty Words to a Real Priority

Finding Students and Recent Grads

There are several ways to create a pipeline of students and recent graduates. First, externship programs encourage colleges and universities to link to their services from their career services page. Externship programs typically have direct relationships with institutions and many rely on student groups or externship alumni who serve as ambassadors to spread the word.

To apply for an externship with Paragon One, candidates complete an application, send in a video and take part in a live interview. Once accepted into the program, externs spend the first week onboarding, which includes setting goals and getting the lay of the land. During weeks two through five, externs receive training and work on projects submitted through a student learning and workflow platform provided by Paragon One.

The externship is highly structured, Wilkerson explains. Externs attend virtual weekly program meetings, company meetings, student-led workshops and networking events.

The top externs are invited to present their projects and findings to senior leadership. Students earn digital certificates from both the employer and Paragon, and are often able to get school credit, subject to their academic office’s policies. They also may land a job: 45% of externs are hired by a Fortune 1000 company within six months of externship completion, says Wilkerson.

Read More: The Secret to Bank Innovation Goes Way Beyond ‘Culture Change’

Opportunities for Smaller Financial Institutions

An externship can also help financial institutions meet their diversity, equity, and inclusion (DEI) goals. According to Wilkerson, three-quarters (77%) of Paragon One’s externs are from underserved minority backgrounds, 54% of externs are women, and 15% of externs identify as LGBTQ+. Externs come from more than 100 countries.

“We look past traditional criteria of school attended, GPA, and previous resume where allowable by companies,” notes Wilkerson. “We seek students who show ambition, dedication, and a genuine curiosity to learn about new career fields.”

Obviously, HSBC is one of the world’s largest financial institutions with a multitude of career opportunities. But externships can work for community and regional banks and for credit unions as well.

Wilkerson ticks off three questions a bank’s C-suite should answer to see if an externship program would be a good fit for their institution:

  1. Does the financial institution encourage innovation and change?
  2. Is the organization’s culture supportive of student mentorship and corporate social responsibility?
  3. Does the bank or credit union have the right internal technology and product capabilities, or should it find a technology partner that can streamline the process?

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