Fintech vs. Traditional Finance: Which Pays Tech Professionals More?
It has been turbulent times for fintech. Venture funding has dried up; crypto crashed; and fear of a potential recession has led many companies to tighten budgets and unleash layoffs.
But as crowdsourced data from levels.fyi shows, turbulent times haven’t dampened fintech’s tendency to pay out high compensation—even for entry-level software engineers. Here’s a full breakdown of some prominent fintech companies and what they pay:
Traditional financial firms have been overhauling their own metrics lately, thanks to bank collapses and other problems; massive assets and strict rules are not necessarily a guarantee of stability. Nevertheless, many tech pros are intrigued by the idea of building software and services for a big bank or hedge fund. How do salaries for software engineers in fintech compare to what their colleagues earn in more traditional financial firms? Levels.fyi gives us some insight into that too:
At first glance, there seems to be quite a gap between what fintech and traditional financial firms pay their entry-level software engineers. Keep in mind that crowdsourcing isn’t always the most scientific way to determine compensation data; relative sample size and other factors may skew the final result.
To create some additional points of comparison, we turned to Glassdoor and its estimates of total salaries for software engineers working in traditional finance; keep in mind that this data covers engineers of all ranks, from entry-level to senior:
The Glassdoor data closes the gap a bit—but still, fintechs seem to pay a bit more than traditional financial firms, especially when you consider how software engineers’ compensation at fintech firms will only increase with tenure (assuming the firm survives, of course). The reason for higher fintech salaries is quite clear: these cutting-edge firms not only have to compete for talent with the traditional financial sector, but also deep-seated tech giants like Google and Microsoft who have no qualms about paying what it takes to secure the talent they need.
As the financial industry continues to embrace technologies such as blockchain, data science, machine learning and chatbots, the need for technical specialists will only increase. If you’re skilled in a cutting-edge arena, chances are you’ll have your pick of potential positions—whether you want the faster pace of a small fintech startup or the relative security of a century-old financial conglomerate.
