The knowledge crisis in financial software: How talent shortages are slowing progress
In this article
Summary
Our finance signals 2025 report uncovers a growing challenge in the Financial Services Industry (FSI): the concentration of critical software knowledge in too few hands. This so-called “knowledge crisis” is quietly undermining productivity, agility, and resilience.
Our data shows that 66% of FSI systems fail to meet SIG’s recommended knowledge distribution rating, creating “knowledge monopolies” where only a few individuals understand how core systems work. This makes systems harder to maintain, slower to improve, and riskier to scale.
It’s no surprise that 70% of financial services CEOs now say the lack of skilled professionals poses a greater threat than competition or changing customer demands.
Read the full report to learn how improving knowledge distribution can reduce risk and boost long-term agility.
Introduction
As financial institutions push forward with digital transformation, many are hitting a familiar roadblock: a shortage of skilled people to build and maintain the systems behind it. The pace of innovation is high, but finding and keeping the right talent isn’t getting any easier.
According to PwC, 70% of financial services CEOs now see the talent gap as a bigger threat to growth than competition or changing customer demands. Still, only 28% say they’re prioritizing workforce upskilling, leaving a clear disconnect between the problem and the response.
The shifting talent landscape
The demands on the financial services workforce are changing fast. According to the World Economic Forum, technology, digitalization, and sustainability are driving the growth of the fastest-growing roles, particularly in the financial services industry.
Over the next five years, 44% of current skills will need to evolve, and 60% of employees will require retraining to stay relevant. The problem? Only about half will have access to those opportunities. That gap leaves a significant portion of the workforce unprepared for the demands of modern financial systems.
Without a structured approach to workforce development and knowledge retention, financial institutions risk falling behind on transformation goals while also losing valuable expertise at a time when it’s needed most.
The hidden knowledge crisis in FSI software development
Talent shortages are already a challenge, but they’re compounded by how knowledge is distributed within development teams. Too often, critical expertise ends up concentrated in the hands of just a few people.
Our benchmark data shows that 66% of FSI systems fall short of SIG’s recommended knowledge distribution rating, meaning most organizations are operating with “knowledge monopolies”—systems where only a small group of developers understand how things actually work. This setup creates bottlenecks, increases risk, and slows teams down when it matters most.
The risks of knowledge monopolies
When critical knowledge is concentrated in a few hands, it creates serious downstream effects on cost, speed, and resilience.
- Higher operational costs: New developers spend more time navigating undocumented or overly complex code.
- Longer recovery times: When key developers leave, fixing issues or making changes takes significantly longer.
- Slower software evolution: When only a few people understand how a system works, it becomes harder to adapt or scale.
For FSI organizations managing hundreds of software systems, these inefficiencies scale exponentially, draining resources and increasing risks.
Keeping systems up-to-date matters
In addition to spreading knowledge across teams, keeping system components up to date is just as important. When components aren’t regularly maintained, they become harder to modify, slowing down development and increasing both security and operational risks.
Regular updates and maintenance are critical for ensuring long-term efficiency and system stability.
Prioritizing skills and knowledge distribution
As the talent gap widens, financial institutions need to be more deliberate about how knowledge is shared and retained. Prioritizing upskilling, documentation, and cross-team visibility is critical for reducing dependency on individuals and building long-term resilience.
That means investing in regular training, keeping system documentation up to date, and ensuring components are actively maintained. These practices both reduce risk and help create a more adaptable and future-ready workforce.
These insights come from our latest report, finance signals 2025, packed with exclusive benchmark data and 25 years of expertise optimizing financial IT. It’s a must-read for CIOs, CTOs, and technology leaders aiming to make confident, strategic decisions in a rapidly evolving environment.
